For seven years, “repeal and replace” worked as a great glib political alliteration (see, I can do it too). It was key to Republicans winning control of Congress in 2012 and helped Donald Trump take the White House in 2016. But actually doing it, well, nobody knew it could be so hard.
But why is it so tough? In short, because reducing insurance premiums, which most Americans favor, requires controlling medical costs, which most Americans oppose. And without solving the medical cost problem, lawmakers can’t really fix the insurance problem. So Democrats try to mask rising premiums with ever-increasing government subsidies while Republicans would reduce insurance costs by effectively blocking sick people from buying coverage, thus creating a low-cost risk pool of mostly healthy people.
Slowing the growth of medical costs
In fairness, the Affordable Care Act did include some modest efforts to slow the growth of medical costs. But most were experiments that have yet to really pay off. And many were based on the concept of better managing care (sometimes even including long-term care), an idea that health economists love but many consumers, physicians, and hospitals do not. For a few years after passage of the ACA, medical cost growth slowed, but now it is again growing at 5 percent a year or more.
In 2015 Congress voted to fundamentally change the way Medicare pays doctors, shifting from volume to quality and patient outcomes. It was a great idea, in theory. But those changes have not yet taken effect and it is not clear when they will.
The most expensive care in the world
Despite these efforts, few politicians really want to tackle health costs, which are a combination of high prices and enthusiastic use of health services. The US utilizes more care and pays a higher price than any other developed country. The result: The US spends an average of $10,000-per person on medical care, more than twice the average of major developed countries in the world. And our health outcomes are no better and sometimes worse.
But Americans must like it this way since they punish lawmakers who try to change it.
Why? In part, because we often confuse more health care with better health care. That instinct is aided and abetted by a payment system that has few incentives for patients to care about cost and a health care market that is less transparent than almost any other.
Add direct-to-consumer marketing, risk-averse doctors, sub-specialists who are focused on aggressively treating a specific condition rather than caring for the whole patient, and consumers who are overwhelmed by medical jargon and conflicting advice, and you get the most expensive health system in the world.
The buzz saw
When lawmakers do try to change the system, even modestly, they run into a buzz saw.
Now, Medicare is a government program and you’d think the public would like the idea of the government controlling its costs. But not when it comes to health care, apparently. Led by Sarah Palin, Republican critics likened the idea to euthanasia, where heartless government bureaucrats would withhold care for certain individuals. The caricature was ridiculous and completely unfounded, but it resonated with anxious consumers.
Another example: A few states have tried to license mid-level dental professionals called dental therapists who could provide much-needed, cost-effective oral health care in underserved communities. Dentists rose up in opposition to block bills in Congress and several states. It worked. The idea has stalled.
Faced with that backlash, risk-averse politicians look for other ways to respond to the health cost problem.
The Democratic solution in 2010 was to expand eligibility for Medicaid and boost premium subsidies for private insurance. Many low- and moderate-income people do need help paying their insurance premiums. But ever-increasing subsidies remove any incentive for consumers to press for lower-cost care, including social supports that could reduce demand for medical treatment.
And Republicans? Most of their bills to replace the ACA are aimed at reducing insurance premiums for young, healthy consumers rather than slowing the growth of underlying medical costs. Some would do it by allowing insurers to sell policies that exclude many medical risks. Or, they’d allow insurers to carve sick people out of their risk pools either directly or indirectly. That would lower premiums for the healthy, all right. But at the cost of leaving millions uninsured or underinsured.
Some backers of limited coverage argue that insurance that forces people to pay more out of pocket will make consumers more cost conscious and eventually reduce costs. But years of research suggests that if people must pay for health care, they won’t get it at all. At least not until they face a major medical crisis, when it is really expensive.
In the end, the story isn’t really about the politicians. It is about us. Until Americans finally recognize that the best care is not the most expensive treatment, medical cost growth will continue to rise. And so will health insurance premiums. No matter who is running the government.