Here We Go Again? Yet Another Unintended Consequence of the ACA

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July 27, 2016 by Mark Hammerstrom

In a recent blog I wrote about the shifting burden of health care costs onto the consumer. In many ways that should be no surprise, but there is no doubt that this shift is catching many consumers off guard. This may be the ‘canary in the coal mine’ for increased economic hardship for many Americans.  At least additional hardship in terms of making important health care choices based on the cost of, rather than the necessity of, medical treatment.

Adding to the canary’s plight is another side of the impact of the Affordable Care Act (ACA) which is where and to whom the cost of care has shifted.

Recently CNBC reporter Dan Mangan wrote a story entitled “Wealthy spending more on health care than poor and middle class, reversing trend.” As the basis of his story, Mangan cited two recently published studies, one from Harvard and another from the journal Health Affairs.

Both studies documented the rather dramatic change that has occurred in who spends the largest amount on health care. Mangan’s opening sentence tends to say it all: “Health-care inequality is the new income inequality.”

He goes on to summarize the Harvard report:

“The study…reveals that the poor — who as a group have more health needs and live shorter lives than higher income groups — in recent years have become the group with the lowest-spending per capita, after decades of being the biggest spenders…In other words: People who need health care the most are now getting less of it than the people who need it the least.”

He goes on to relate that, according to another study in Health Affairs, this shift “…came as a result of a reduction in per capita health spending by or on behalf of the poor, at the same time as spending by the rich ramped up significantly.”

Mangan goes on to quote one of the authors of the Health Affairs study as saying: “We fear it may presage deepening disparities in health outcomes[.]”

Pausing here for just a minute: Does anyone think this was an intended consequence of the ACA?  I hardly think so.  Recalling the political brouhaha that accompanied the passage of the ACA, a significant benefit to the act was that the poor would now receive, or at least find an easier and affordable way to receive, much needed health care.  Quite apparently not so.  According to one of the authors of the Health Affairs study, Dr. Steffie Woolhandler, “A major change happened.”  I think that is an understatement.

Quoting Mangan’s report again: “The study suggests that the downturn in overall health spending by the poorest quintile, or one-fifth of the population, may be at least partly blamed on stagnant wage growth for most workers, coupled with a big increase in the number of health insurance plans with high deductibles…Research has shown that high-deductible plans can discourage health-care usage, particularly among people with lower incomes.”

According to Mangan, Woolhandler indicated that “…the data doesn’t reveal whether the poor, as a group, are getting too little in the way of health care, or whether the rich are getting too much as a group. Both scenarios are possible, but ‘we cannot tell,’ she said. However, the shift revealed by the study ‘cannot possibly be an efficient use of resources’ by the health-care system…’To be efficient, that has to track with need.’”

Woolhandler said the ACA has been “a partial solution…” Many of the individual health plans sold on government-run exchanges “come with such huge deductibles…The federal government has more or less endorsed the idea that these huge deductibles are acceptable, and that has been part of the problem.”

Of course this shift comes with a price. According to the report the poorest men can expect to live fifteen fewer years, and the poorest women ten years, when compared to similar age groups in the wealthier classes.

More shoes to drop? No doubt.  The politicization of our health care system, and how to pay for it, are coming with consequences that are markedly impactful and unexpected.  This can’t help but affect the care we all pay for and receive.

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