While healthcare reform is on life support in Washington, it is important for everyone to remember the financial impact of a failed attempt to reform the system. As I have been saying all along, the healthcare reform bills were expensive, flawed, and in need of major work. I also said we should pass the bill to get the process started because there is no way to get a perfect/great bill when it comes to something as complicated and big as healthcare reform. I think it’s important to highlight some of the short term costs to us as Americans. While many thought the reform bills were expensive, I believe, and will continue to believe, doing nothing will be even more costly. While there are many reasons, below are some of what we can all expect in the coming months/years if Washington politicians cannot come together to pass legislation to repair our broken system. In no particular order of importance:
1. Without costs controls, the price of healthcare will continue to rise as it has for decades at rates far above inflation. As prices rise, so will insurance premiums. There is a direct relationship between the price of healthcare insurance and the ability of people to pay for the coverage. Higher premiums means more people will lose their coverage because they can no longer afford to pay. The number of uninsured or underinsured Americans will rise at an alarming rate.
2. Without healthcare insurance reform, people will continue to run the risk of being dropped from their policies when they get sick or hit their benefit maximums. Many more will not be able to find coverage because they have a pre-existing condition. Much like rising premiums, more and more Americans will become uninsured.
3. Without payment reform to providers (hospitals, doctors), pharma, equipment/device manufacturers, etc. the price of services will also continue to rise. As prices for the services rise, the costs will need to be passed along to all of us, again, through our insurance premiums. As with the costs controls above, there will be further increases of insurance premiums.
4. As costs continue to climb and with no assistance for small businesses to provide insurance, many smaller employers will not be able to offer insurance to their employees. Even more troubling, as we have seen this past year, larger employers (self-insured) are going to further expand their cost shifting by increasingly adding to the out of pocket expenses paid by the employees. Higher copays, coinsurance amounts and deductibles will be the norm going forward. This past year saw this shift in cost sharing expand in far greater numbers than in years past. The trend will continue and a very fast pace. Making healthcare even more expensive for everyone who has insurance.
5. Medicare is in serious financial trouble. The healthcare reform bills provided a process to determine if money is well spent on treating certain conditions using outcomes data. Without a formal structure and process in place, slowing the growth of Medicare spending will be even more difficult. Taxes will be raised to cover the costs no different from what was in the bills that are being rejected.
In summary, doing nothing costs more. Both in the short and long term. It is not hard to figure out. One just needs to put politics aside to get consensus on a bill. It is not fair or good for the process to cut all the special interest deals that so alienated the public. We lost our way and need to make the true costs are understood by everyone.