The dust has hardly settle on the Supreme Court decision affirming one more time the Affordable Care Act. Never the less, the US healthcare delivery system’s wheels seem to be coming off the cart.
Two huge signals occurred this week which should inform the simplest of minds that the current US healthcare delivery system, yes Obamacare, is obsolete and needs serious modification. Hmmm.
The Affordable Care Act, to its credit, fixed the immoral and unethical (but not illegal) practice of US healthcare insurance companies who would deny healthcare coverage to individuals. Their targets were individuals who used “too much” healthcare services, or who had “pre-existing conditions” and might use too many services. The previous system also allowed individuals to avoid insurance all together and simply wait until they needed care and then visit a Hospital Emergency Room (and pass the cost onto everyone else). ACA fixed those faults and added an estimated 30 million more Americans to the healthcare rolls.
This past week financial news reported Aetna and Humana will merge operation and Cigna and Anthem were in discussions about merging. If these deals go through the big will have gotten bigger.
Now, all by itself, this merger news might not be that interesting. But there is more. Across the country, health care insurance companies are requesting/announcing huge rate increases (20-40%!!!). These companies claim that the new enrollees (thanks to Obamacare) were sicker than they thought and now there needs to be relief in the form of higher premiums.
Hmmm. And again why do the companies want to merge and get bigger in a business where they claim they are losing money?
The US healthcare system is structurally defective if one assumes healthcare should be available to everyone. The current system, including Obamacare, in essence separates the population into high risk and low risk pools. The high risk Americans cannot afford the premiums which unregulated hospitals, doctors, and drug companies want to charge. The consequence will be either poorer healthcare or the government will need to pick up even more of the tab. The winners will be insurance companies and the providers of medical services.
All of this might be understandable if it were not for so many other successful healthcare delivery models around the world which produce healthcare outcomes equal to or better than the US, insure all residents, and costs about half as much as the US spends.
Mergers and rate hikes could not be a louder signal that ACA has not solved the fundamental US healthcare problem.