Wednesday, June 20, 2018

On Armstrong and Getty Today re: Current State of U.S. Healthcare

Where are we now with American Healthcare? 
  • We’ve passed more laws and regulations on healthcare in the last 8 years than in the prior 50, combined.   
  • Employee benefits are the 2nd or 3rd largest expense for every US Business behind rent and payroll.  
  • PPACA itself is 2,400 pages in laws and another 40,000 in regulations so far.  It will likely be 80K to 100K pages when done.   
  • PPACA still set to cost just under $2T. However when government bean counters projected the cost of Medicare and Medicaid into the future (20 years out) they missed by a factor of nine ($12B vs. $107B).  
  • Taxpayers in California now fund 70% of all healthcare via Medicare, Medicaid, CHIP, the VA, Tricare, County/Local Health Programs, PPACA Exchanges and state, local and fed gov’t employees.  Other states are generally 60% to 65%.   
  • PPACA was passed without being read and instead of enforcing all of the “pay fors” in the law, politicians in both parties have worked to erode all of the vegetable eating required by the ACA.  Some of the 21 taxes, mandates and penalties have been suspended, repealed or eroded significantly.  For this reason, I suspect the law will cost more like $2.5 or $3T 10 years out.   
On cost and government efficiency in healthcare, from the Hill:
When the Obama administration restructured private individual insurance, it created bloated policies that people would not voluntarily purchase. Not counting the money spent on state and federal exchanges, the federal government spent $341 billion from 2014 through 2016 on subsidizing individual coverage so that people would buy it. 
All this spending managed to increase private coverage by just 1.7 million people, slightly less than half of the natural increase in the civilian labor force. That’s $200,000 per person. The feds could have saved money by closing the exchanges and giving people who qualified for subsidies a check for $50,000 for each of the three years. Those people could then have paid $20,000 for their own unsubsidized policy and used the rest to either cover their out-of-pocket costs or buy a nice used car.