Let?s have some fun with one of the most depressing subjects of the 21st century ? healthcare. Let?s speculate what will replace health insurance after Obamacare blows up.
That?s right, blows up. I realize that?s a chilling scenario, but it?s one we must be prepared for. I think Barack Obama was on the right path in trying to reform healthcare. But given the enormity of the problem, the most he could do was reshuffle the deck.
The one major weak spot in Obamacare, and the one that will likely sink the entire system, is the complete absence of cost-containment. Obamacare did deal with some important aspects of the healthcare system. Those include primarily making coverage available to all Americans, regardless of health status. It also made it impossible for insurance companies to charge higher premiums based on health.
How much healthcare is too much healthcare? We?ll find out soon enough, possibly as early as the next financial meltdown.
In the meantime, and while things are on the quiet side, let?s speculate as to what will likely replace it. There?s no way to know for certain, of course, but below are my thoughts.
An Expansion of Medicare or Medicaid when Obamacare Blows Up
I?m listing this one first because there?ll be tremendous political pressure to ?do something?. The most expedient something will be to simply expand on an existing government program.
If we?re lucky, Medicare will be the plan of choice. It?s more generous than Medicaid, and people seem to be generally happier with it. Some sort of quasi-national plan could be implemented that will expand Medicare to non-senior citizens.
It probably won?t be a win-win. Since it?s a government program, taxes will definitely go up. We should also assume it will include monthly premiums, and much higher than what is being charged now. It?ll be an expensive fix.
Another potential negative is that the system will likely be watered down, particularly for people under 65. There?s no way that the US government can turn Medicare into an affordable universal healthcare system. More likely, it?ll be a stripped-down version of the current system, primarily to provide some form of basic-only coverage. We can only speculate what the limitations will be, but rest assured they?ll be there.
Alternatively, the politicians could expand Medicaid. It currently covers a lot more people than Medicare ? 74.4 million ? at a cost of $574 billion dollars (in 2017). Medicare covers 57 million people, at a total program cost of $580 billion (in 2016).
Of course, Medicaid provides minimal coverage, and many health practitioners don?t accept it. It would be better than nothing, but maybe not a whole lot better. And if the program is expanded to the general public, expect to see monthly premiums included.
Whether a public plan involving either Medicare or Medicaid (or both) are implemented, it would take years to happen, and include higher direct costs to consumers.
A Public/Private Hybrid
This combination wouldn?t be without precedent. It?s already employed in other countries, and even in the US through the Medicare/Medicare supplement combination. If we do get some kind of public system, it?s likely to provide minimum coverage. It?ll be up to each of us to get an adequate secondary policy. Since these already exist to go along with Medicare, it would just be a matter of insurance companies expanding policies to younger people.
My suspicion is this will be the ultimate fix, but the transition won?t be painless. Much as was the case with the roll-out of Obamacare, there will be a lot of impassioned political arguments on both sides. And when the dust finally settles, the basic government plan will be both more expensive and less generous than the current models.
Boutique Health Insurance for the Wealthy, a Medicaid Equivalent for Everyone Else
Capitalist systems are adept at providing solutions to most problems. But they tend to work best for those who can most afford them. It?s likely we?ll see some sort of return to a robust private health insurance market. That will enable those who can afford it to get the best kind of coverage available.
It?ll be expensive, but if you?re wealthy, it?ll be the best program available.
It?s likely to coexist with some sort of bare-bones healthcare coverage for the masses, likely built on the Medicaid program. Only once again, the program will be both more expensive and less generous than the current Medicaid set up.
This is probably the ?doomsday scenario? that we have to hope doesn?t happen. But expect something like this to play out if the country goes through a major economic decline. Once again, there will be a strong public groundswell supporting a national plan. But there won?t be money available to make it happen the way we?ll all want.
Private Plans Based on Christian Health Sharing Ministries
As a Bible-believing Christian, part of me is actually rooting for this to take place. However, the current Christian health sharing ministry construct isn?t without its flaws, and isn?t altogether Christ-like either. Still, it can serve as a model for something much bigger in the future.
From what I understand, Christian health sharing ministries are not true insurance. They?re more like a giant IRA, were members make monthly payments into the plan. The funds are then available to the members in their own time of need. The monthly contribution is only a fraction of what you will pay for health insurance on the exchanges.
So far so good.
But here are the negatives:
- Total benefits are capped at lower levels than traditional insurance.
- Qualification is based on the old health insurance system of excluding people with serious health conditions. (This is the part that isn?t at all Christ-like.)
- You have to ascribe to a certain set of beliefs and behaviors in order to participate in a plan.
Put another way, Christian health sharing ministries are extremely exclusive. Not only do you have to be healthy, but you have to be Christian. I don?t have a problem with the faith part of that equation. After all, they are Christian-based. But as a Christian, I have to ask the question how Christian do you have to be in order to be considered Christian? (The jury?s out on that one, even within the faith.)
And of course, the more fundamental problem is that the ministries exclude people with serious health conditions ? the very people who most need coverage.
The Christian Health Sharing Ministry Silver Lining
I don?t want to be too critical of these plans. And I certainly don?t want to ?throw out the baby with the bathwater?. They are, after all, very specific to Christian organizations. As well, the main purpose is to keep member costs low. The only way to do that is to exclude people with the most serious health conditions.
As a private-sector endeavor, these will probably expand once Obamacare blows up. That?s the silver lining. We have to hope that they?ll expand beyond faith, and especially to include the most vulnerable members of society ? the chronically ill.
I believe there?s real potential for Christian health sharing ministries to be the driving private-sector solution to the healthcare crisis. As well, as small, private organizations, these ministries can better control cost, if only because they?re less likely to be ?in bed? with the providers. And my guess is that in a crisis environment, many healthcare providers will anxiously participate in these ministries at greatly reduced cost.
Unfortunately, for these plans to become mainstream and commonplace, the current system will have to fail. It?s ironic but true that failure creates rich soil for forward progress. The current system is so bloated and bureaucratic, that it?s beyond reform.
But when it does finally blow up, all things will be possible. And since the best solutions usually come from the bottom up, Christian health sharing ministries could be the foundation for the way forward in health insurance.
We can dare to hope.
Now that I?ve laid out some possible replacements, let?s consider a couple that I don?t think will happen?
A Return to the Old Health Insurance System
This one seems almost like a slam-dunk, but I somehow doubt we?ll go back to it. I?m guessing the insurance companies would absolutely love to ? which is precisely why the public shouldn?t. Though the system rewarded the young and healthy with lower premiums, it essentially punished the old and the sick.
What?s more, there are solid reasons why it got replaced in the first place, and none of those issues have gone away. The insurance industry spent a lot of money defending the old system, which should make us immediately suspicious. But when it finally disappeared, no one seemed particularly upset.
If we do return to the old health insurance system, we can fully expect the number of uninsured to rise steadily and quickly. My guess is that it will go well beyond the 50 million who were uninsured pre-Obamacare. After all, insurance companies were able to exclude the most vulnerable. And with the rest, they simply charged premiums that made coverage unaffordable.
It didn?t work before, and it won?t work if it?s reimplemented. That doesn?t guarantee it won?t make a comeback, but I seriously doubt it.
What About Universal Health Coverage?
This is probably everybody?s favorite assumed solution, but I don?t share that sentiment. I?ve already laid out the reasons why I don?t think it will work, in 7 Reasons Why Universal Healthcare Won?t Work in the US, but here?s the recap:
- The already high cost base of the US healthcare.
- Strong potential that doctors will exit the field.
- The high cost of malpractice insurance. It?s entirely unlikely America is prepared to give up the right to sue healthcare practitioners.
- The uniquely American pay-any-price mentality.
- Taxes will explode to pay for the new system.
- Any US universal healthcare system will NOT be based on the European or Canadian models. (But rather on a fatally flawed attempt to be all things to all people.)
- Medicare will likely be the model for universal healthcare in the US. That means higher taxes and monthly premiums. No one will be happy with that.
Feel free to suggest universal health coverage, but I just don?t think it will happen.
What are your thoughts? What do you think will replace health insurance after Obamacare blows up?