Repeal and Replace was Rebuffed—as it should have been. After seven years and sixty-plus votes to kill Obamacare, Republicans, led by President Trump, put forth a hastily-crafted plan that did nothing to deal with the underlying problems with Obamacare: the change in what health insurance does and the continuing rise in the cost of providing health care and medicines. Premium spikes are only a painful symptom.
When I first took a job, in the dark mists of time of 1974, health insurance was like all insurance—designed to cover catastrophic loss. For normal stuff, we paid our own way. For many reasons, that changed, and what we have now is essentially pre-paid health. Insurance companies collect premiums and pay costs and, except for minimal co-pays, the premiums equal the cost of providing health care in the country.
Until and unless we affect the underlying cost, premiums will be adjusted—typically upward—with the cost of providing services and drugs.
In 1970, not all that long ago, the annual per-capita cost of health care in the United States was $356. Now it is over $7,500. In 1970, it was in-line with socialist countries, like France, Sweden and Norway. Now, our per-capita cost is nearly double theirs. They control a lot of things we don’t, and unless there is a sea-change in our views—that having the government involved in the cost of services and prescriptions—we can only expect things to get worse.
In 1970, when health care accounted for 7% of our economy, we could be sanguine about the costs; now, when it is nearly a fifth of our economy, we cannot. We need real leadership, politicians willing to do hard things. Instead of tilting at imaginary windmills, they need to deal directly with a real dragon.