In post-ACA America, health care is so expensive that Americans are both spending less in other sectors of the economy and putting off doctor visits more readily than at any time since 2001. Three recent stories show the scope of this problem. First, the WSJ reports that middle income Americans spent 24 percent more on health care in 2013 than they did in 2007. The result, argues the Journal, is that these Americans are also buying fewer consumer goods and “luxury” items as necessities like health care eat up more of their income. The piece notes that families are spending more on health care because health care is getting more expensive, not because they are consuming more care at the same price. But it doesn’t really dive into the causes of rising costs.A Chicago Tribune piece that zooms in on health care in Illinois sheds more light on the problem. According to the Tribune piece (picked up by the LA Times), many Illinois residents who acquired coverage under the Affordable Care Act have plans with such high deductibles that they cannot afford to use their new insurance polices. In addition, premiums are increasing by double digits for some state plans:
“These people, even though they have access to some form of insurance, really do not have health care,” said Suzanne Hoban, executive director of Family Health Partnership Clinic, a free and reduced-cost clinic in Crystal Lake. […]About 217,000 Illinoisans signed up, exceeding federal expectations, and about 7.1 million Americans enrolled during the law’s first open enrollment period. But about 63,000 Illinoisans enrolled in low-premium bronze plans, which last year had a median deductible of $5,600 in the state and for 2015 have a median deductible of $5,750. […]Premiums for the cheapest bronze plans in Illinois are increasing by an average of 11 percent in 2015, according to state data.
Spending is rising because premiums are rising and deductibles are rising. This means people are paying more without consuming substantially more care than they did before. Things have gotten so bad that a recent Gallup poll found more Americans putting off getting health care than in any year since Gallup started asking the question fourteen years ago.The stories cited above show just how much these rising costs are burdening Americans, preventing them from receiving care, crushing them under huge bills when they do, and suppressing consumer demand all throughout the economy. Contra partisans on both sides, health care reform is not some secondary priority that can wait on more important reforms. It is urgent. But there is one lesson that is clear here: cost is king. Unless you tackle rising costs head-on, and make that the absolute heart of any health reform you do, those costs will defeat any other measure you try to pass. Insurance is worthless if people cannot afford to use it, an IOU that cannot be redeemed.The ACA has failed not because it preempted more important reforms, but because it was the wrong kind of reform, one that was organized around expanding insurance and included only minor attempts at lowering the cost of care. Because of that choice, we still have a serious health-care cost problem that every year becomes more serious, and neither party seems to know what to do about it.