Magazine article Behavioral Healthcare Executive

Get the Government out of My Healthcare

Magazine article Behavioral Healthcare Executive

Get the Government out of My Healthcare

Article excerpt

It has been difficult to watch television lately without seeing some angry governor loudly promising that "Obamacare," or more recently, the Medicare expansion, won't ever be implemented in his or her state. The list of reasons why is as old as the Revolutionary War and as current as tomorrow's front page: tyranny, taxation, sovereignty, and mistrust.

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But every person or governor that yells, "get the government out of my healthcare," ought to take a closer look at the Affordable Care Act which, in typically messy, compromise American political style, institutionalizes the role of private health insurance:

* Under the "mandate," private American health insurance companies stand to gain some 15 million new policyholders and additional premium revenues of $878 billion. Of this, they will retain an estimated $152 billion for profit and the costs of administering this expanded coverage from 2013 to 2020. (1) The remainder, some $626 billion, would flow through to hospitals and providers.

* Under the Medicaid expansion, many of these companies will be able to compete for an estimated $150 billion in states that expand Medicaid via managed-care contracts. (2) The winners of such contracts will reap an estimated $21.6 billion in profit and administrative costs, with the remainder, $130 billion, flowing through to hospitals and providers. Note that this total doesn't represent the entire Medicaid expansion--just the managed care segments.

Through the structure above, the ACA puts to rest the specter of a real government takeover--a government-operated "single payer" system. Some time ago, when I considered the costs of having multiple, private insurers administer the ACA's health coverage expansion--$174 billion through 2020 in the examples above--I wondered whether that was a good idea. So, I asked a healthcare economist.

"Wouldn't it be a lot more efficient, cost-wise, to have a single-payer system, since you wouldn't have redundant operations and you wouldn't have to pay profits to shareholders?" I asked. "Nah," he said, explaining in so many words that he preferred neither private insurers nor a single payer be left solely in charge. "They'd both screw it up," he said.

Hmm, I thought. Checks and balances. Government and the private sector. One keeping an eye on the other. …

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