Friday, August 10, 2012

Is SCOTUS Decision on ACA a Victory for Progressives?

Although Progressive's are lauding the decision as a huge victory for Obama and America, the SCOTUS endorsement of the ACA is actually, exceptionally weak. The Individual Mandate is now labeled a tax and will cost the President hugely in political capital. Meanwhile the Medicaid expansion will no longer be (effectively) mandatory. I predict many states will opt out. Another factor often overlooked is the exception to the Individual Mandate whereby many citizens can, without penalty, choose to be uninsured because health plans available do not meet the affordability requirement. Thus the number of insured will not increase in any significant way. And therefore, the other provisions of the ACA cannot be funded.

My prediction is that within a few months or years we will realize we have made no meaningful progress on Healthcare Reform. We will still have huge swaths of the population uninsured and seeking healthcare only when there is an acute episode and then going to a high cost provider (a hospital ED). We will have expanding government programs that can only pay for themselves with borrowed money. We will continue to have healthcare inflation (perhaps blunted by a weak economy and/or payment reforms, i.e. pay for performance, bundled payments, modernized capitation models etc.). Health insurance will still be a lousy value. We will continue to see American companies at a competitive disadvantage in the global marketplace due to the cost of employee health benefits.

For true Healthcare Reform, we need to activate the capitalists and the entrepreneurs. We also need bi-partisan support for any new federal laws. Government policy has been successful in creating the environment for innovation and change in other industries and there is no reason healthcare is any different. Hat's off to the Democrats for coming up with a plan. Unfortunately, I don't think this one (the ACA) is going to be the solution.

-Tara Pihn

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