No One Knows How Much in Costs We Individually Impose on the Healthcare System and That's a Huge Problem
A new executive order from President Trump revises the Affordable Care Act by ending taxpayer subsidies for insurance offered on state exchanges, allowing for lower-cost insurance plans with scaled-down coverage, and calling for a more competitive marketplace in which people pay prices that more accurately reflect the costs they impose on insurance providers and other taxpayers.
These rather dramatic changes leave some people and insurance providers hurting, while others celebrate the possibility of buying more affordable policies that better fit their needs. Though understandably controversial, Trump's changes eliminate perpetual red-ink operations and make for a more sustainable healthcare system.
Finally, it seems, someone has been asking how we will pay for this program.
But while these changes may be a step in the right direction, we cannot really know the outcome until we answer a more detailed version of that question: How much cost are we, as specific individuals or certain key demographic groups, imposing on the nation's healthcare system?
As my wife Dot and I discussed this news, we learned how insurance premiums would be affected for people in different income categories. A single, 64-year-old earning $26,500 annually, for example, could see his annual payments rise from $1,700 to $1,850. This didn't seem all that bad.
But if that same 64-year-old earned $68,200, he would see premiums jump from $15,300 to $19,200. And that's pretty heavy lifting.
Nowhere in our reading did we find data on how much cost individuals or families, on average or in certain categories, impose annually on the healthcare system. The discussions we found were all about consumer cost, not about what would be called "social cost."
We found it weird that the 44 million Americans on Medicare, including us, do not receive a quarterly or annual statement telling us how much cost we imposed on the healthcare system, how much we paid in premiums, and what the balance of those payments might be.
Going a bit further, why not have a record for all the years we have been covered by Medicare? We can say the same for secondary providers that supplement Medicare.
The 71.8 million citizens on Medicaid and Children Health Insurance Plan also operate in the dark. They have no straightforward way of knowing how much any of us are spending.
The more Dot and I talked about this, the crazier it seemed that one of our largest annual expenditures (we guess) would be unaccounted for. We couldn't help but wonder how our behavior might be affected if we knew how much healthcare costs we are imposing each year.
Nor could we imagine how the elected officials struggling mightily to improve our healthcare system might benefit from this kind of straightforward information.
Maybe, just maybe, Trump needs to add another section to his healthcare executive orders. The section could instruct the Department of Health and Human Services to provide quarterly statements to all those covered by healthcare insurance, reporting the cost each individual has imposed on the healthcare system, the payments made by the individual, and the balance, all on one page.
A more informed consumer is always a better consumer — even if someone else is picking up the check.