Debates by candidates seeking to be the Democratic party’s nominee to run against President Donald Trump in the upcoming election indicate that health care is a major policy issue that cries out for significant improvement. Proposals range from eliminating private forms of insurance coverage available through employers to protection offered solely by the federal government to a single-payer government operated program that also includes options for other forms of coverage. The latter choice recognizes that some beneficiaries may prefer having insurance provided by an employer rather than being compelled to participate in a governmental program.
Recent findings from the National Health Interview Survey help to highlight why some form of remediation is considered desirable. An estimated 14.2% of U.S. residents said they or a family member had problems paying medical bills in 2018, down from 19.7% in 2011, according to a report issued in February 2020 from the Centers for Disease Control and Prevention. The percentage of individuals in families having problems paying medical bills was higher among females (14.7%), children (16.2%), and non-Hispanic black persons (20.6%) compared with males, adults, and other racial and ethnic groups, respectively. Among persons under age 65, those who were uninsured were more likely than those with Medicaid or private coverage to have problems paying medical bills.
The Challenge Of Financing The Costs Of Health Care
National spending on healthcare is projected to grow 5.5% between 2018 and 2027, according to the Centers for Medicare & Medicaid Services (CMS) Office of the Actuary's annual report that was issued in February last year. This growth would outpace average projected GDP growth by 0.8%. The forecast means the healthcare segment of the U.S. economy would climb to 19.4% by 2027, up from 17.9% in just two years. Medicare for All is one proposal being touted as a way of addressing the challenge of financing the cost of health care. Differences exist among advocates of this approach regarding whether it will be necessary to impose additional taxes. Individuals in favor of higher taxation believe that the amount beneficiaries must pay will be offset by eliminating other expenses associated with deductibles, co-payments and co-insurance.
A concern is that even if Medicare for All ever becomes the law of the land, there is no guarantee that it will be implemented and sustained as originally planned. The Affordable Care Act furnishes compelling evidence of the kinds of unintended alterations that can occur once a significantly large national endeavor leaves the launching pad. An original element of the ACA pertained to Community Living Services and Supports (CLASS) as a means of meeting the costs of long-term care. Seventeen months after the law was enacted, however, the HHS Secretary announced that CLASS would be abandoned because it was unsound financially. Reforming the federal tax code in 2017 resulted in repeal of the individual mandate to purchase health insurance or pay a penalty for failing to do so. In December 2019, legislation was enacted to eliminate three mechanisms designed to pay for the ACA: the so-called “Cadillac Tax”, the “Health Insurer Tax”, and the “Medical Device Tax.”
Curbing Waste In The Provision Of Health Care Services
A review of 54 unique peer-reviewed publications, government-based reports, and reports from the gray literature described in the October 15, 2019 issue of the Journal of the American Medical Association yielded the following estimated ranges of total annual cost of waste: (1) failure of care delivery, $102.4 billion to $165.7 billion, (2) pricing failure, $230.7 billion to $240.5 billion, (3) fraud and abuse, $58.5 billion to $83.9 billion, and (4) administrative complexity, $265.6 billion. The estimated annual savings from measures to eliminate waste were as follows: (1) failure of care delivery, $44.4 billion to $97.3 billion, (2) pricing failure, $81.4 billion to $91.2 billion, and (3) fraud and abuse, $22.8 billion to $30.8 billion. No studies were identified that focused on interventions targeting administrative complexity. The estimated total annual costs of waste, including items not listed here, were $760 billion to $935 billion and savings from interventions that address waste were $191 billion to $286 billion.
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