Why You’re Paying More for Care

The failure of the Affordable Care Act has been nothing short of spectacular.

Even the strongest supporters admit it has failed to make health care or health insurance more affordable — except, that is, for the relatively small number of people who are receiving government subsidies.

It’s not unlike the companies that sell you cereal or coffee and keep the prices relatively constant by shrinking the packages.

That isn’t really making health care more affordable — it is simply shifting costs around.

Cost shifting, which hides or disguises costs and reduces the incentive for patients and providers to keep costs low, has dramatically increased under the ACA. Subsidies, in particular for copays and deductibles, are an obvious example. Profit and loss pooling for insurance companies, supplemented by government subsidies for “the biggest losers,” is another. Requiring more services to be provided for free is another.

When you have to pay higher insurance premiums to provide free benefits for groups whose lobbyists were successful at getting their favored treatments — benefits you may not want or use — well, that is another form of cost-shifting.

It is very similar, in fact, to the way socialist economies in Cuba and Venezuela operate, and how they once operated in Soviet Russia and the Eastern Bloc.

In Venezuela, toilet paper is “free” — or it has a very low price, but for some reason there isn’t any on the shelves. There is also out-and-out chicanery and “bait and switch.” Yes, your premiums may remain constant, but your deductibles and copays increase. It’s not unlike the companies that sell you cereal or coffee and keep the prices relatively constant by shrinking the packages. Or, as with Veterans Affairs, the waiting time to actually see a physician grows longer and longer.

We were warned about all of this, both by omission and commission. Who can forget what Nancy Pelosi told us in 2010, when Congress passed the ACA on a strict party-line vote — that we could find out what was in the law after the vote, not before? Not only was there to be no increased transparency about health care costs, there was not even any transparency about what lawmakers were actually voting to approve.

Voters don’t realize that much of the blame (for stagnant wages) should go to increasing health care costs.

While Obama repeatedly promised we could “keep our plan” with the coverages we liked — the lie of the year — Democratic senators like Kirsten Gillibrand of New York admitted “we all knew” the statement was false. That’s because they weren’t concerned with costs, only with “access.”

While access has truly improved, without cost control it’s really only another example of cost-shifting.

Cronyism – or crony-capitalism – is another problem more government regulation only makes worse. The life-saving EpiPen is a great example. Auto-injectors deliver a one-time dose of epinephrine, also known as adrenaline. The drug opens up a person’s airways, reduces swelling, and stabilizes blood pressure when the person is having an allergic reaction. It can mean the difference between life and death. But sweetheart deals with insurance companies, a lack of price transparency for users who have insurance, and a lack of global competition have led to phenomenal price increases for American consumers — even as some foreign users pay far less.

Bloomberg reported that “after insurance company discounts, a package of two EpiPens costs about $415,” DRX (a drug pricing expert) said. By comparison, in France, where Meda sells the drug, “two EpiPens cost about $85.”

Such boondoggles are key: Prescription drug spending is estimated to have accounted for 16.7 percent of $2.729 trillion spent on health care in the U.S. last year. And drug costs are increasing at a far greater rate than costs for hospital care or physician fees.

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The irony is that cost-shifting is also hiding these problems from the American voter.

Americans are complaining about stagnant cash wages — which have to drop as health insurance costs increase. The voters don’t realize that much of the blame should go to increasing health care costs. That only leads to more avoidance of the real problem, with politicians promising quack economic cures such as increased minimum wages, or more regulation of small business — since big businesses are easier for government to control and make it easy for politicians to disguise the costs of their pet projects and get more legal graft.

To keep costs down, we have to recognize that they are our costs, not those of someone else. That requires price transparency at the point of sale, and other reforms that were excluded from the ACA, such as a single global market for drugs and medical devices.

The ACA did one good thing, and only one good thing: It made it possible for individuals with pre-existing conditions to keep their insurance if they leave a job or their personal situation changes, as long as they maintain continuous coverage and don’t try to be “free-riders.” Let’s keep that — and repeal and replace the rest with a real, competitive market for health insurance and health care.

Dr. Ramin Oskoui, a cardiologist in the Washington, D.C., area, is CEO of Foxhall Cardiology PC and a regular contributor to LifeZette.