What Increasing Health Care Cost Really Mean for Us

by Rose Chen

If America runs on Dunkin’, it’s no wonder that it trips on health. Health care is a universal problem, but while other countries have found ways to take care of their sick, the United States has continuously struggled to adapt an effective system.

Implemented back in 2010, the Affordable Care Act was an attempt at improving “affordability, availability and quality” of health care. It expanded the pool eligible for Medicaid and mandated individuals to be insured.  It also prevents companies from setting dollar limits and from discriminating against people especially those with preexisting health conditions. Many policies put the burden on insurance companies, which are either forced to pull out of the market or raise prices to fill profit voids. With less competition, the remaining companies lose any incentives to lower their cost, thus keeping health plan prices rising.

According to the Kaiser Foundation, a research group, premiums are predicted to increase 25 percent across the board. Despite the alarming headline, the situation might not be as dire as it seems. First, statistics vary among the states. While the highest of the states reach 50 percent increases, there are other states such as Ohio where cost rose by only 2 percent and Indiana where cost actually decreased by 3 percent. Second, increases are unlikely to affect individuals directly. The majority of Americans receive insurance through their employers or Medicaid, leaving only a small group of high earners to buy their own plans. Among people shopping in the ACA market, roughly 85 percent receive government help. And that’s the other part of it: as prices increase so will government subsidies.

While we can take a breather for now,  there is no doubt that our system is flawed. Even if we are not paying for the bills directly, the money has to come from somewhere. Nearly a fourth of federal taxes go towards paying for health care. There’s clearly something wrong with that kind of figure. Our president-elect has proposed to control price hikes by “repealing and replacing Obama Care”. Whether or not his changes will make a difference, we’ll have to see. But one thing’s for sure:  he’ll have to take reforms beyond the insurance industry and tackle the broader, underlying parts of the health system. A problem can never be truly solved without taking care of it from the root.

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