Consumer and Provider Cost

Smoke and mirrors, a red herring that can accurately describe the current condition of the health care system in the United States of America. The idea of universal health care is a commonly debated topic and just like socialism, it sounds good, but it doesn’t work. Americans voice their concerns with their local political representative, as they are the agent of change on the state and federal levels, however is the American public voices falling on deaf ears? A deeper dive into federal and state policies, health care demographics, and a pro’s and con’s analysis will uncover pertinent information.

Federal and State Policies

Health care mandates and regulations are enforced at the federal and state level. The most recent mandate, the Affordable Care Act (ACA) has created a foundation of health care regulations. While accomplishing the goal of enabling access to care, the ACA has a long distance to go to create affordable health care.

In an effort to reduce sticker shock, insurance companies rolled out high-deductible health insurance policies (HDHP). The monthly premium is significantly lowered compared to the traditional preferred provider organization (PPO) plans, however this is where the bait and switch lies. HDHP come with hard to understand terminology, higher out of pocket expenses, and higher deductibles. The use of HDHP has discouraged participants to delay care because the cost of care is not affordable. While the premiums are affordable, the cost to use the insurance is out of reach for many.

Health Care Demographics and Consumer Cost

According to Robert Wood Johnson Foundation (2016), “National health care forecast to about 20% of Gross Domestic Product by 2020 if current spend trends persist.” The levels of health care spending are at an all-time high as the government has their focus on insurance matters as opposed to cost management. Considering the level of technology in the health care space, cost efficiencies and medical breakthroughs have to be around the corner. The government needs to be more proactive in nature and set controls in place to stop the bleeding.

Pros of Federal and State Policy

According to the Federal Trade Commission (2019), creating competition in the health care marketplace is a consumer friendly initiative that helps stabilize cost and improve level of care. HealthCare.gov acts as a medical marketplace; the creation of HealthCare.gov enables transparency for the consumers to price match and gauge health plans amongst each other. Furthermore, the use of a transparent marketplace will enable consumers to secure health care at a price the consumer deems as affordable.

Another consumer friendly policy is subsidizing the cost of healthcare with tax credits. The tax credits help promote affordability. The big selling point on HDHP’s are the low premiums, the government will further spotlight the low premiums to encourage enrollment.

Cons of Federal and State Policy

According to Chambers & Collins (2016), regulations in the aggregate lead to price increases, which is likely to cause the health care facilities to pass on the additional expenses to the consumers. Heavy regulations incur additional expenses and time labor commitments for companies to be compliant, the burden is then passed on to the consumer. What a paradox for the government to create a consumer friendly policy that ends up adversely affecting the consumer.

Conclusion

A deeper dive into federal and state policies, health care demographics, and a pro’s and con’s analysis will uncover pertinent information. Tax credits and HDHPs help make health coverage affordable, heavy regulations demand providers to surge the prices. As the nation is conflicted by the affordable coverage, buyer’s remorse sets in once the participant elects to use the coverage at a health care facility. ACA is just the beginning, the government needs to continue working to disrupt the notoriously expensive health care industry.

References

Chambers, D., & Collins, C. A. (2016, February 23). How Do Federal Regulations Affect Consumer Prices? Retrieved from Mercatus Center - George Mason University: https://www.mercatus.org/publication/how-do-federal-regulations-affect-consumer-prices-analysis-regressive-effects-regulation

Federal Trade Commission. (2019). Competition in the Health Care Marketplace. Retrieved from Federal Trade Commission: https://www.ftc.gov/tips-advice/competition-guidance/industry-guidance/health-care

Robert Wood Johnson Foundation. (2016). How Price Transparency Can Control the Cost of Health Care. Retrieved from Robert Wood Johnson Foundation: https://www.rwjf.org/en/library/research/2016/03/how-price-transparency-controls-health-care-cost.html