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A Health Reform Review

By October 9, 2014Commentary

Regular readers know that we generally review research and other reports for our commentary, but every now and then we can’t resist getting a little preachy.  This is one of those days, sparked by the appropriateness of a review of the effects of reform as we prepare for the second year of exchange enrollment.  One thing to note is that the law has worked out so well that proponents have, legally or not, had to delay certain major portions of its implementation, including the critical employer mandate, and have used administrative powers to modify the original language or intent in other respects, such as who is eligible for subsidies.  One way to measure the effectiveness of the law would be against the promises that were made to secure its passage, for example, that premiums would go down.  We all know how that has worked out.  The law has secured health care coverage for more Americans, but a significant percent still are uninsured, apparently because they want to be.

What is really not clear is whether the law has actually improved the health of Americans.  That won’t be apparent for years and any change would be hard to attribute to the provisions of reform versus other factors.  Research has suggested that getting coverage alone doesn’t necessarily lead to better real outcomes–an improvement in people’s health status.  Other than for those who are getting the Medicaid freebie, the law isn’t making coverage or health care more affordable.  While health spending isn’t growing as fast as a few years ago, it is still increasing at a rate greater than wage and income growth, particularly for middle and low-income workers.  The decline in the spending growth rate can be largely attributed to the slow economy and greater cost-sharing in health plans, a trend which has actually been encouraged by the reform law.  While having people be responsible for paying some of their health costs makes good economic sense, it is hard not to have a sense of nervousness about whether most people have access to, and can effectively process, information on what health care they really need.

In our view, it is inevitable that any “reform” that is driven from the top-down by huge bureaucracies is not going to be real reform; is going to cost a ton of taxpayer dollars; is going to have untoward, unintended consequences and is going to leave people more frustrated and bewildered by the system than they were before.  I am not sure there is any single design change that is going to magically make health care better or cheaper, but I am pretty sure that this reform is not going to achieve either of those ends.

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