A Hidden Hypocrisy Behind Democrats’ Hard Line on Health Care
The key word is "subsidies".
First, I do believe Democrats are correct to fight right now to ensure the current ACA subsidies which make marketplace plans affordable for many Americans stay in place. Waiting to fight that battle until closer to the end of the year when the subsidies actually expire would be irresponsible governance and bad politics. This is the moment to use a shutdown to highlight that issue. Turns out, Americans enjoy being able to afford insurance so that they can get medical care. It’s a broadly popular position and many even recognize that it is a net positive to use tax dollars to help the less fortunate afford health care. After all, if someone goes to the ER but can’t pay for it, they’re going to be treated anyway and those costs end up in someone else’s bill one way or another. We might as well make it possible for these folks to foot some of the bill. That’s the basic idea. And it’s not a bad one. It’s also not a very good one. At least not the way it has been implemented.
The fundamental problem I have with how we attempt to deal with exorbitant health care costs is that most solutions focus on how to best come up with the money to pay existing costs. Make employers contribute more; no, make employees contribute more to employer sponsored plans; no, give government subsidies to limit the costs of both; no, do Medicaid/Medicare for all. Not one of these solutions even begins to question whether or not the costs being paid are justified.
Let me clarify what I mean with an example. Several years ago, I had one of those nasty skin tags under my arm get really inflamed. I was at the doctor anyway for a checkup so I had him remove it. Five minutes, tops. Easy. For some reason, a few weeks later I was checking through my records in the patient portal and I happened to glance at the bill from that visit. One number has forever since shaped how I think about health care costs in the U.S. That number: $50. That’s how much the doctor charged for the band-aid he put on my armpit. Think about that. Fifty bucks for a band-aid! I’m looking at the CVS website right now, and a 30 pack of the same basic band-aid is $6.99, or just over 23 cents each. That’s about a 20,000% markup!
Of course, I didn’t pay $50. I had decent health insurance and I paid a $20 co-pay. That $50 charge is what the doctor charged my insurance. But BC/BS (or maybe it was United Health Care, I don’t remember) isn’t paying fifty bucks for a bandage out of the kindness of their hearts. They’re in it for the money. So that means that somewhere in their pricing scheme, they’ve calculated how much to charge customers so that they still make massive profits after paying 20,000% above market for a bandage. Surely one reason the bandages are so expensive is so they can only pay 500% over cost for larger ticket items. My question is this: Why aren’t the insurance companies ranting about paying $50 for a band-aid?
The answer is quite simple: They’re not paying for them. You and I are, with our premiums and deductibles. And of course in the taxes we pay that become the subsidies the insurance companies get from the government. So when Democrats shut down the government to keep health care affordable for average Americans, they’re only telling half of the truth. They want to keep those subsidies in place because that is the only way many (and I do mean many) people can afford health insurance. I say it’s only a half truth because subsidies don’t really lower the cost, they simply redistribute how the costs are paid. Sometimes, as with the corn subsidies of the annual “Farm Bill”, subsidies keep prices artificially low. But sometimes, as with those paid to health care giants, they are acting to keep prices artificially high. There’s simply no way a free market supports a $50 band-aid when I can get one for 23 cents at CVS. Before you get your knickers twisted, I’m not suggesting our health care system should be based on a pure free market. That won’t work either. There’s also no way a free market allows every citizen to afford basic health care. We need some kind of government regulation and moderation of health care costs. All I’m saying is that the solution we’ve stumbled into, isn’t a very good solution.
One of the themes I promised to write about was how U.S. politicians treat symptoms instead of the disease, and though I’ve more than buried the lede, I think I have sufficiently identified exactly such a problem. The Affordable Care Act was a noble effort and it has helped a lot of people get much needed health care. And it was probably the best that could be done at the time. But it was just a very expensive band-aid on a systemic wound that needs much more attention. We should not be satisfied at efforts to simply keep the bandage on a wound that is still hemorrhaging. We should be demanding our elected officials actually do something about the root of the problem which is exorbitant costs built into the system. Lowering middle class premiums for the middle class by giving tax supported subsidies to companies that earn annual profits in the billions is not lowering costs. It is a state supported redistribution of wealth to those who are already wealthy. So the next time your elected officials talk about keeping health care costs down, ask them what they really mean by that. Are they proposing something new to actually lower costs or are they simply trying to keep the half-effective ACA afloat? If it’s the latter, you should demand they do more so that your tax dollars aren’t paying for someone else’s $50 band-aid.