Experts warn GOP bills would do little to curb health care costs
It may be a couple more weeks before the Senate votes on an effort to repeal and replace the Affordable Care Act, but critics say measures Republicans are considering would fail to stem the growing cost of health care in the U.S. even if they bring insurance premiums down for some patients.
Sen. Marco Rubio, R-Fla., told Politico Thursday that Republicans are eying the week of July 17 for a vote on their long-promised legislation to roll back the ACA, also known as Obamacare. The House passed its version of the bill two months ago.
The House GOP plan and the one under consideration in the Senate have drawn fire from the left and the right, as some say the legislation goes too far in undoing the patient protections in the ACA and others complain that it does not go far enough.
Senate Majority Leader Mitch McConnell, R-Ky., had hoped to get the bill through the Senate before the Fourth of July recess, but moderates rebelled against Medicaid cuts and conservatives balked at the elements of the ACA that were kept in place.
Sen. Ted Cruz, R-Texas, has reportedly put forth an amendment aimed at alleviating some of the concerns of both sides by allowing insurance companies to sell any kind of plans they want as long as they offer one that adheres to all of the ACA’s rules. Critics fear this would turn the Obamacare-complaint plans into de facto high-risk pools, saddling sick patients with extremely high prices while healthy people buy cheaper, less comprehensive plans.
While much of the political debate has focused on rising insurance premiums, less attention has been paid to the underlying issue of the cost of health care.
“Too many in the GOP confuse adjustments in how insurance premiums are regulated with bringing competitive pressures to bear on the costs of medical services,” wrote James Capretta, a resident fellow at the American Enterprise Institute, in a Real Clear Health op-ed.
Many of the measures Republicans are considering would shift insurance costs to different groups of patients, according to Capretta, but experts say finding ways to reduce the cost of care itself would have greater impact.
“The biggest determinant of insurance premiums is the cost of health care in local markets,” said David Blumenthal, a former physician and president of the Commonwealth Fund, a health and social policy non-profit.
Efforts to keep those insurance prices down have left patients paying much more out of pocket, including those mostly unaffected by the ACA’s provisions.
While some buyers on the ACA’s individual markets have faced double-digit premium increases, average family premiums on employer-sponsored plans rose only 3 percent in 2016, according to the Kaiser Family Foundation. Average premiums increased 20 percent from 2011 to 2016, a marked improvement from the 31 percent increase from 2006 to 2011 and the 63 percent increase from 2001 to 2006.
That is good news, but it has been accompanied by a rapid rise in deductibles. Kaiser found that half of workers in employer-sponsored health care plans faced deductibles of at least $1,000 in 2016. Average deductibles overall were up 49 percent since 2011.
“A rising tide lifts all the boats,” said Alan Sager, a professor of health law, policy, and management at Boston University. “Insurance premiums go up mainly because payments to doctors, hospitals, and drugmakers go up.”
According to the Bloomberg Health Care Efficiency Index, the U.S. has one of the least efficient health care systems in the world, despite spending more per person than most other countries. In 2014, per capita health care spending in the U.S. was $9,403, compared to $5,292 in Canada, $3,935 in Britain, and $5,411 in Germany.
The rate of increase in costs has slowed in recent years, but U.S. spending still outpaces comparable countries.
“Our costs are so high that those small percentages still amount to large amounts of money,” Blumenthal said.
There are a number of factors driving up costs in the U.S., a trend that began long before the ACA passed.
According to the Congressional Budget Office, health care spending in the U.S. went from 4.7 of GDP to 14.9 percent between 1960 and 2005. The Kaiser Family Foundation found it was up to 17.8 percent of GDP in 2015. Per capita spending in 2015 was nearly six times higher than in 1970, adjusted for inflation.