The Affordable Care Act was touted as a measure that would lower health care costs and expand access to care, but the reality has not been so rosy. In a new report, Heritage Foundation researchers Edmund F. Haislmaier, Robert E. Moffit, PhD, Nina Owcharenko and Alyene Senger highlight five of the law's broken promises, while offering their own model for health care reform that utilizes the free market.
What promises has the Obama administration broken with regard to the Affordable Care Act? According to the report:
- The President promised that Americans could keep their health plans if they liked them, "period." But that's not been the case -- millions of Americans have lost the coverage they had prior to the enactment of the act. In 2013, 4.7 million health insurance cancelations occurred in 32 states.
- Americans were told that if they liked their doctors, they could keep their doctors. Again, not so -- many Americans had to change doctors, because insurers limited the number of health care providers in their networks in order to keep costs down. Of the plans offered on the health care exchange, 48 percent have "narrow" networks, meaning fewer available doctors.
- Have premiums fallen by up to $2,500 for the typical family, as promised? Nope. In reality, family premiums for employer-offered plans have increased by an average of nearly $3,500 since 2009. In 42 states, exchange coverage for individual plans in 2014 was more expensive than pre-exchange coverage.
- The president promised no tax increase for families making less than $250,000 annually. But that ignores the host of taxes and fees in Obamacare, which create $770 billion in new federal revenue over a decade. These taxes -- whether the medical device tax or the tax on health insurers -- fall on ordinary Americans.
- President Obama said that the ACA would protect the Medicare program, but, in reality, Medicare spending is cut in order to finance spending under the ACA. If those cuts are allowed to occur, more seniors will have trouble accessing their doctors.
Is it possible to reform the health care market without sending prices skyward and limiting people's ability to see the doctor of their choice? Yes. The researchers offer reforms based on free market principles. They contend:
- The tax treatment of health care should be changed. Since 1954, employer-offered healthcare plans have been considered tax-free compensation. This means that employer-based plans are purchased with pre-tax dollars, while an individual purchasing his own health coverage can only purchase that plan with post-tax dollars. This system privileges employer-sponsored insurance, which reduces individual choice and tends to hide the true cost of health care.
- The states should be given control over insurance markets. The states have a proven record of regulating insurance, and federal oversight reduces the number and quality of choices given to consumers.
- The Medicare program needs reform. The researchers argue for raising the eligibility age to 68 to account for increasing lifespans and increase premiums.
- Medicaid should be fragmented to better serve its target communities -- indigent children and parents, the elderly and the disabled -- because each has different needs and costs. Each group should be funded separately and be able to use their Medicaid dollars for private insurance.
The report encourages replacing the Affordable Care Act with a system that puts greater control into the hands of patients rather than the government.
Source: Edmund F. Haislmaier et al., "A Fresh Start for Health Care Reform," Heritage Foundation, October 30, 2014.
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