The social Matrix

The social Matrix

Thursday, May 2, 2013

What YOU Should Know About the debate on Health Care Reform

  While the Affordable Health Care Act comes closer to full implementation, Congressional Republicans continue to try to repeal the legislation, as financially-strapped Americans (53 million) are reluctant to visit the doctor. 

 According to a 2012 survey by the Center for Disease Control, 15.3 percent of the population doesn't  have health insurance. Furthermore, approximately 20 percent of the population weren't insured,  at some point that year. 

U.S. Census Statistical Abstract

At the same time, the cost of health care has been rising. From 1994 until 2011 the the cost of health care increased from $970 Billion to $2.5 trillion. The United is the second highest spender  (18 percent) on health care as a percentage of GDP. Government spending on health care accounts for 50 percent of the healthcare expenditure.

U.S. Census Statistical Abstract 

Why Does it Cost so Much?  

   One reason for the escalating cost of health care is because of defensive medicine. In order to prevent medical malpractice lawsuits many physicians will run several medical test. Medical professional often have to take out large insurance liability insurance with heavy premiums. According to the American Medical Association, medical liability  cost $84 to $151 Billion a year. Majority of the time doctors are exonerated from accusations of medical malpractice but still spend an estimated $100,000 for legal defense. 

  Another reason for the rise in healthcare is because of medical technology. While America may have the most innovative technology,  it is continuing to become expensive to maintain that  equipment. According to a study  from the University of Arizona, Physicians who owned diagnostic imaging equipment ordered four times more imaging exams than other physicians.

Lastly, it is impossible to ignore the rising cost of prescription drugs.  In 2009 the Pharmaceutical industry spent $26 million on lobbying. Drug manufactures are seeing the fruits of their investment. For example, Pfizer has watched its profits increased to $3.8 Billion.  


Much concern has been raised over the financing of the Affordable Care Act. The total cost for the new law is approximately 1 trillion dollars over the course of ten years. 

Sources for funding through taxation includes insurance companies, drug manufactures, and tanning salons.

In particular, one unpopular source of funding is taxing companies that manufacture medical devices. Opponents of the measure, say it will  stifle innovation, investment and could result in massive lay-off at the planets where these devices are produced. Advocates of the tax, which will contribute $29 billion, argue that the tax will hardly affect profits. Moreover, the cost will be offset because the expansion of people who will have health insurance will increase demand


Last year, controversy intensified over the legality of requiring citizens to have healthcare.  Although many conservatives argue that the mandate is unconstitutional, it is conservatives who supported the  position. In her book, the Truth About Obamacare, Sally Pipes, President and Chief Executive Officer of Pacific Research Institute, wrote that individuals will be require to pay $700 for not having health insurance. Furthermore, Pipes quotes Representative Steven King of Iowa, who stated that the IRS will hire 17,000 tax agents for the mandate.

However, concerns over the implementation of the individual mandate may be overstated. According to a 2012 CBO report,  out of the 46 million Americans who are uninsured only 6 million will be subject to pay a penalty. Many people will be exempted from the penalty because of religious beliefs, income, or legal status (Undocumented immigrants.)  

Many conservatives are worried that the new law will exasperated unemployment because it will charges business $2,000 if it does not offer health insurance for its employees. Moreover, some families that get their health insurance through an employer might also be negatively affected.  

  Attempts to overhaul the entire legislation are problematic. There are key pragmatic items in the bill that should receive more attention from republicans. For example, one provision forces insurance companies to use more of the money accumulated from premiums on medical claims rather than marketing and advertisement. Another, provision allows young adults to stay on their parents health insurance plan until they are 26 years-old. 

   One issue that invariably is needed to be address for comprehensive health care reform is the shortage of doctors.  According to the Association of Medical Colleges the number of doctors will continue to shrink. In 2015, it is estimated that there would be 70,000 fewer doctors than needed namely because of the expansion of health insurance and the increase demand in geriatric health services. Demographic data shows that  senior citizens are expected to become 20 percent of the population by 2030. That is almost double what it is today.

U.S. Census Statistical Abstract 

 The issue is further complicated for poorer patients that rely on public programs like Medicaid.Many doctors are reluctant to accept Medicaid payments due to the comparatively lower reimbursement rate.  According to the Center for Disease Control, only 69 percent of physicians accepted patients with Medicaid compared with 82 percent for private insurance. The reason for this reluctance is because reimbursement rates for Medicaid are lower than private insurers. 

 The ACA tries to remedy this problem by increasing Medicaid payments for primary care services by 10 percent. This is important because 215 million people visit primary care offices ever year. However, the problem again becomes complicated by the fact that 70 percent of doctors work in specialized medicine with larger student debt than regular doctors. In fact, the number of students entering medical school for primary care has dropped in the last 15 years.

The legislation is making a concerted effort to manage this shortage, by encouraging medical students to provide services to minority neighborhoods by alleviating  student loan debt.


National Ambulatory Medical Care Survey Electronic Medical Supplement, 2011  

 Still, not all criticism,  of the health care policy is reasonable. Some opponents are eager to equate ACA with   "Socialized Medicine." Perhaps, the most outrageous comments came from former Minnesota republican contender Michelle Bachmann. 

  To be fair, many conservatives understand there is an urgent need for  health care reform. In fact, it was Obama's predecessor, George W. Bush who upset many conservatives when he decided governmental intervention was necessary in reforming health care when he signed the Medicare Modernization Act

  The  legislation would add prescription benefits to Medicare but use market forces to pay for them through private insurance. The bill passed passed the Senate but narrowly passed the House (216-215) In 2008, 22 million seniors signed up for the program.  
    This new policy known as Medicare part D, was originally estimated to cost 1.2 Trillion dollars over ten years (2003-2013) but was cut in half to $520 billion. Moreover, the new policy reduced the cost of premiums by 40 percent. 

  Another popular solution, among republican and conservative circles, is portability. Rather than allow only a few health insurance companies to dominate a the market, consumers can have more options. In 36 states one insurance company has a hold on 33 percent of the market. The problem is worse in 16 states where major insurance companies have over half.

 Ideally,  in a free-market society, absent government restraints, consumers are able to evaluated alternative products and services and choose the one that best fits their needs. However, in a marketplace that consist of 1300 Insurance companies and over 22,000 items, and medical procedures available, the byzantine process is less helpful. According to Consumer Union, a consumer advocacy group, as the number of options for a product increase the probability that the consumer will make the  best selection decreases. The group cited a study on Medicare part D, that found that even medical students have a hard time choosing the best insurance policy as options increase. 

This is problem especially for Americans who are denied certain payment of specific medical claims such as a Stacey Grondin, grocery store manager from Nashville, who went to the hospital for heart problems. Grondin had to pay $1,000 because her health insurance company refused to pay for the ER and ambulance ride. Anecdotal stories like Grondin are abundant. 

 Although, the country has made remarkable improvements in health, there is still room for improvement. The U.S. ranks 56 in life expectancy, and has the sixth  highest percentage (32 percent) of obese adults.  There are serious concerns over the new health care legislation however, repealing the entire bill is not going to help, it is only going to make it worse. 

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