In Part 1, I went over the current state-of-play in American healthcare finance and reviewed the Republican proposals for changing the system. Assuming this agenda takes hold (the basis for the future I planned for South), we end up with a picture that unfortunately is a more extreme version of what we have today, with all the problems magnified and new ones added to the mix.
Healthcare State-of-Play in 2032
In the 2032 envisioned in South (numbers refer to parts of Mitt Romney’s healthcare and Medicare proposals as listed in Part 1):
- Once the tax exemption for employer-sponsored health insurance (ESI) was eliminated (#8), the number of companies offering ESIs to their line employees has plummeted. Predictably, company-paid health insurance is still offered to executives.
- Caps on non-economic medical malpractice damages (#5) and the imposition of mandatory arbitration by insurers (#4) (model: banks, brokerages, credit-card issuers) make filing or winning a malpractice suit almost impossible. Relieved of the economic penalties for failure and bothersome regulatory requirements, and pressured by insurers to cut costs, healthcare quality-control takes a nosedive and hospital infections and deaths-in-care rise.
- Because of reduced coverage requirements (#1) and allowing health insurance to be sold across state lines (#9), certain states with lax regulations have become home to disproportionate numbers of insurers who offer low-cost policies by severely limiting coverage. (For a model, look at credit-card issuers.) Due to the general anti-regulation attitude among the serving lawmakers, these limitations aren’t consistently or clearly spelled out in policies, leaving many people who think they have health insurance open for big surprises when they try to make claims. (For a model, look at credit-card issuers.)
- The rosy view of the healthcare market (#15) is never borne out in reality. Healthcare costs continue to increase far faster than GDP growth.
- Since Medicaid became a block-grant program and grant awards were cut (#12), the coverage each state offers (if any) varies wildly across the country. The grant amounts go up far more slowly than medical costs, leaving fewer people covered or steadily dropping provider reimbursements that lead to de facto rationing of care for Medicaid patients.
- The Medicare vouchers (#13) started out low when first implemented and, like Medicaid grants, fail to keep up with the increase in medical costs. Private insurers bleed off healthy seniors, thus increasing Medicare’s costs and reducing its market share so it no longer serves as a brake on medical costs (as it did before 2012). Premiums have become unaffordable for most seniors, who have also lost Social Security (subject of another post). A rough estimate: conditions have returned to pre-1965 conditions, when half of seniors had no viable health insurance.
- The decline of ESIs and the general inadequacy of government subsidies for insurance leads to millions more uninsured (over and above the 49.1 million uninsured in 2010).
- Because of the previous five points, the emergency room becomes the primary medical care provider for millions more people, especially the poor or uninsured (or minimally insured, as discussed above). While ERs are still nominally required to treat all comers regardless of insurance status, this law is even less enforced in 2032 than it was in 2001, when widespread patient dumping was reported. Also, more hospitals have closed their ERs as a cost-cutting measure, increasing the strain on the ones that still exist.
- The repeal of the Affordable Care Act caused a collision between “must carry” (#7) (insurers must offer policies to people with pre-existing conditions without exclusions or increased rates) and the elimination of the individual mandate (everyone must have health insurance, one of the aspects of ACA the right has loathed with a passion even though it was devised by the right-wing Heritage Foundation in the 1980s). Insurers are no longer bound by “must carry.” Millions of Americans can no longer find insurance because of pre-existing conditions, or it’s astronomically expensive.
- The repeal of ACA eliminated the requirement that insurers spend at least 80% of their premiums on patient care. As a result, insurers continue long-enduring practices such as frequent premium hikes unconnected to cost increases, narrowing coverage, cancelling policies of people who make claims, lowering provider reimbursements, restricting access to specialists, and severely restricting out-of-network treatment and payments (and steadily shrinking networks).
- Healthcare providers, under pressure from low insurer reimbursements, respond by cutting services, closing departments, and thinning out floor staff.
- People in the top income quintile can afford comprehensive insurance, private hospitals, and the latest treatments, which include gene therapy for multiple cancers and heart ailments.
How This Works in South
Bel (Our Hero’s wife) works twelve-hour-plus shifts six days a week as head nurse in the ER of a local hospital. The ER constantly works at full capacity; would-be patients regularly wait multiple days for care. The staff calls the waiting area “the Pit” because of the conditions. Bel – a former Army medic in Afghanistan – compares her hospital to the Afghan ones she saw over twenty years ago. Patients eventually get care, but they’re also billed for it. Most are unable to pay. The hospital makes up for it by closing other departments (Pediatrics closes the day we meet Bel, throwing her best friend out of work) and cutting staff salaries.
Bel thinks she’s tired of fighting, but she’s just taken it underground. She steals supplies from the hospital and uses them to provide simple treatment to neighbors in exchange for money, services or back-yard produce. Luis, her husband, buys pharms from Mexico to supplement what she takes. Bel rationalizes this by figuring she’s saving the hospital money, since it doesn’t have to treat people who can’t afford its inflated prices.
Alvaro, Luis’ father (who lives with them), has multiple health issues and can’t afford insurance because his Medicare voucher doesn’t even begin to cover the premiums. Bel monitors his decline but can’t do anything for him. His heart is failing, and the family has no way to pay for the gene therapy that would reverse his condition.
It may sound like a worst-case scenario, but it’s just an extension and worsening of current conditions. How else do you think this situation would play out?