An

Issue Brief

the

for

By Isaac Will

Introduction
The United States of America has got an issue; an issue handled by bureaucracy
but not affecting of it, an issue beginning in government policy but not confined to it, an
issue thats discussed across the globe but has no general consensus to it, and most
importantlythe United States of America has got an issue controlled by administration
but instead affects the well-being and quality of life for every U.S. citizen. Specifically,
the United States of America has got an issue with its healthcare system. Though the
2010 Patient Protection and Affordable Care Act brought considerable attention to this
issue, its reforms have proved increasingly detrimental to many aspects of the country.
Accordingly, policy actors such as the President, Congress, Senate, and Department of
Health and Human Services should repeal the Affordable Care Act in favor a Public
Option type system. Here, the government would optimize the efficiency of its own
health insurance for the sake of cheaply competing alongside private companies, all with
the overarching goal of assuring that every U.S. citizen has access to affordable
healthcare.

What is the Patient Protection and Affordable Care Act?

To understand why a policy change is necessary, one must first understand
exactly what the Patient Protection and Affordable Care Act is. Though its more
commonly known as Obamacare, because it was pressed by the Obama
administration and has since become a highlight of his tenure - the acronym ACA will be
used instead for the purpose of avoiding any potential ad hominem fallacy. The
Affordable Care Act, contrary to some misguided popular belief, is not health insurance

Affordable Care Act & Its Failures

itself. The ACA is instead a set of regulations and mandates for health insurance
companies. On paper, it extends to more than twenty thousand pages long (Kessler).
These twenty thousand pages, and all those in addition, can be generalized by listing a
few of the most notable mandates. The first is that it essentially required most Americans
to have some type of insurance by 2014 or face a hefty fine otherwise (Regnier).
Advocates of the law claim that its added 16.9 million since then (Healthline). It
additionally mandates that large employers must provide health insurance to their
employees, while the government delivers subsidies and exchanges for low-income
individuals who cannot afford insurance independently. Also, in the largest changes since
the 1960s introduction of Medicare and Medicaid, it mandates that companies cease preexisting condition denial, dont drop individuals when they get sick, and cease gender
discrimination through costs, amongst other laws (Obamacare). Naturally, an initial
glance at these reforms may make them seem not just beneficial but almost revolutionary.
It would appear as if this act was passed with the best intentions. Perhaps it was. But as
six years progress onward, one quickly sees that well meaning is not the same as
beneficial.

The Failures of the ACA

In the case of the ACA, well meaning has spiraled to catastrophic. Healthcare has
not become widely affordable. The well being of U.S. citizens has not improved. In fact,
the opposite has proven true: the Affordable Care Act has become widely unpopular,
demonstrated fiscal irresponsibility, decreased affordability, caused insurance and job
Affordable Care Act & Its Failures

Affordable Care Act & Its Failures

loss, and has otherwise proven all around not just ineffectual but damaging to the
country. Before examining the statistical repercussions, its worth noting that the law
received absolutely no bipartisan support. It passed with the support of only one political
party. Additionally, both senate and congress voted to repeal it later on but it was solely
vetoed by Barack Obama. Though this argument wont be strongly employed (because
its heavily partisan) this law heavily increased government spending during a time in
which the deficit was the highest itd ever been. Effectively, the U.S. government opted
to spend monumentally more than it could afford in a trend thats historically led to
economic downturn. However, moving to the nonpartisan facts, the ACA actually
increased health insurance rates to the point of being unaffordable for many. Because of
many Medical Loss Ratios (MLRs, which are essentially rates-of-return for the customer)
skyrocketing toward or over 100% due to ACA mandates, many private companies have
been forced to increase their premiums (or insurance costs). In Minnesota, soon to be
more than 41%. In Minnesota, 39%. In Tennessee and North Carolina, 28%. And in
numerous other states, premiums are projected to rise more than 20% as well (Tanner).
Almost everyone just 250% above the poverty level is financially suffering, and for every
one individual who got ACA insurance exchangestwo have not (Goodman). The Pew
Research Center found that millions and more counting will go bankrupt because of these
unaffordable medical bills, while the Commonwealth Fund records that one half of all
Americans still cant find affordable insurance (Geyman). The policy makers insisted
premiums would be an average $2,500 lower, but the average family pays $2,200 more
(Galen Institute). The ACA is also causing almost 40% of all co-op insurances to close

Affordable Care Act & Its Failures

which leaves hundreds of thousands uninsured, violating the If you like your insurance,
keep it policy (Tanner). This is not its only fallacy.
The ACA is also destroying small businesses, jobs, and the incentive to work. By
mandating that businesses pay for their employees insurance, select employers have
necessarily cut their labor force drastically. Worker pay is decreasing by at least $22.6
billion every year according to the American Action Forum. The AHPI also finds that
theres now an additional salary cost of five to six thousand dollars per each employee,
and the renowned National Federation of Independent Businesses aggressively fought the
passing of this law. Even the unbiased Federal Reserve shows huge percentages of
increased employment coming at part time as businesses are likely trying to avoid paying
health insurance (Pipes). This is all in addition to decreased insurer competition thats left
many with just 1-2 options. New taxes and higher premiums have also made select drug
companies marginally increase their prices (Heritage). Also, the law gives more aid to
those with less money. Picking up a part-time job or working another shift means more
money for the individualbut less financial aid for healthcare. This equivocates to the
individual having to pay thousands more for healthcare- and consequently losing money
by working a job.
All of these statistics from all of these institutes and research centers and
passionate, educated individuals clearly illustrate that the Affordable Care Act is
unfortunately not a solution, but yet another swelling failure. With each passing day, this
reform continues to plague our nation with a multitude of aforementioned detrimental
effects that only intensify. Its repeal is resultantly not a recommendation. Its repeal is a
necessity. But reasonably, calling for its abolishment would not be fair without alternate

Alternative Reform: A Type of Public Option

reform in mind. As an alternative to ACA regulated healthcare, as well as an alternative
to the healthcare beforehand, a modified version of the public option would likely be the
most efficient. This system would allow for private insurance companies to compete
alongside government supplied healthcare to cover buyers, with both systems offering
quality standards of care at minimal costs by utilizing workplace reforms and the tax
payers dollar. This would offer a balance between universal and free market healthcare
while still covering everyone.

An Alternative Reform to the Affordable Care Act?

Searching for an alternative to ACA affected healthcare in the divided political
climate that exists today often leads to two suggestions: universal healthcare or freemarket healthcare. The former would entail a government, not concerned with profit,
covering the health insurance of every citizen; this is often referred to as a single payer
system. The latter would entail the privatization of health insurance where companies
would compete to cover all paying citizens. Both extremely partisan systems are flawed
and highly infeasible in their pure condition. The former would significantly exacerbate
debt, raise taxes, prolong medical wait times, lower quality care, decrease doctor numbers
and earnings, and lead to the abuse/overuse of medical resources (Procon). The latter
could lead to the sick being dropped or left uncovered, be susceptible to economic
downturn, and put many individuals at the mercy of corporations and their profit motive
(Hanks). The solution rests in compromise. The solution rests in a mix of both systems.
The solution rests in a sort of Public Option healthcare.

Alternative Reform: A Type of Public Option

How would this Form of Public Option be Implemented?

For this Public Option system to be implemented, the government would first
need to step in as a health insurance competitor automatically providing insurance to
every uncovered individual. Each citizen - every man, woman, and child - would be
provided with a safety net form of insurance. No individual could be denied based on
pre-existing or at-risk conditions, the cost would not fluctuate based on gender, and the
terminally ill would not find themselves paying to die. Though it obviously must adhere
to a certain set of standards, this government insurance would stand as the minimum
quality of coverage options. This would logically entail a degree of government spending.
However, with select reforms and various spending cuts like those listed below this
government program could feasibly cost no more than what is currently spent on
healthcare. As it stands - despite yielding a mostly privatized version of healthcare - the
U.S. spends two and a half times more on each individual than even socialist,
Scandinavian countries (Kane). In just one year alone it spent more than $2.6 trillion only
on healthcare- a figure that amounts to almost 17.6% of the U.S. GDP (Kane, Kliff). But
in the grand scheme of it all, more than one third of this money did nothing to make
anyone healthier (Kliff). By reforming malpractice, minimizing unnecessary workplace
expenditures, utilizing advanced practitioners, and maximizing potential workforce and
technology while increasing both sin and excise taxes, the government could easily fund
its portion of health insurance with little cost to the American public. It is immensely
important though to note that the goal is not to create a government-dominated health
insurance system. While reading how the government will uphold its end, keep in mind
that corporations will be competing against it all the while; this will be explained later.

Alternative Reform: The Governments Side

The Governments Side: Reducing Cost &Making it Affordable

As seen in the chart above, from the Institute of Medicine, the U.S. wastes a
substantial amount of money on healthcare. Reforming this could allow the government
to affordably act as a competitor- an essential component of this Public Option system.
Reducing fiscal waste would begin in the legality of the medical workplace. According to
the New England Journal of Medicine, more than 1 in 14 U.S. doctors face a malpractice
suit ever year (Corapi). These suits are often unreasonable or stem from honest mistakes;
this resulting fear of litigation causes doctors to do two times more tests than any other
OECD country (Kane). These tests, including MRIs or CAT scans, are overwhelmingly
expensive. Reducing this fear of unreasonable litigation would immediately reduce
government expenditure by nearly $210 billion (Kliff). Attorneys, medical professionals,
and health policy makers should collaborate to establish rational clinical guidelines to
prevent unreasonable lawsuits. The UK, for example, created a similar diagnostic
Alternative Reform: The Governments Side

Alternative Reform: The Governments Side

advisory committee run by the National Institute of Health and Clinical Excellence
(Kane). This has accordingly cut down on over-testing, saved millions, and should
logically be a first step.
Another reform would reduce excess administrative spending. The U.S. averages
$600 more per administrator (Kane). This easily be decreased by doing drug
prescriptions online, as Sweden does; such a reform equivocates to less mistakes, less
time, and collaterallyless money wasted. Surgeon/doctor salaries are also needlessly
high. Lowering unnecessary surgery costs and salaries could save plenty and employ
more for the governments safety net healthcare. Even more so, simply changing an
existing law from A physician can authorize durable medical goods, hospice and
homecare, by adding nurse practitioner alongside physician would enable equally
qualified, educated, and experienced nurse practitioners to carry out simple procedures
and again, save billions more (Kane).
Transparency would easily save money as well as it almost always has
historically. France and Japan adopted common fee schedules so services cost similar
rates and not vary by insurer. Switzerland publishes lists of the most-to-least expensive
hospitals to make them equalize. This leads to the saving of billions and could in the U.S.
as well (Kane). The United States should also make larger efforts for lifestyle change
(like quitting smoking or fighting obesity) to prevent healthcare issues in the first place.
These are but a few examples of how a government-run side of healthcare could
exist affordably to compete alongside corporations. However, an countless number of
reforms far too many to describe - could annually eliminate $75 billion lost in fraud,
$190 billion lost in excess costs, $210 billion lost in unnecessary screenings, $130 billion

Alternative Reform: The Governments Side

lost in inefficiently delivered services, and $55 billion lost in missed prevention
opportunities (Kliff). Rationally, a policy issue brief detailing each expenditure needing
cut would extend beyond thousands of pages. For the purpose of this brief, the solutions
of easing information technology, managing complexity, making healthcare safer,
improving transparency, and easing communication should be substantial to make a
government-managed competitor affordable. The chart on the next page discusses such
measures.

Alternative Reform: The Corporate Side

Finally, to afford the expense of the governments healthcare, sin taxes (taxes

on sinful or harmful goods) would be raised significantly. Select excise taxes (taxes
on harmful chemicals) would be selectively raised as well, though careful to avoid a
rise in gasoline or oil prices. This would generate a large pool of funds. Its also
important to note that this healthcare system would make Medicare and Medicaid
unnecessary. Cutting Medicare would free just under $550 billion a year (How Is
Medicare Funded). Cutting Medicaid would free $431 billion a year (Department of
Health and Human Services).

The Private Insurer Side: Insuring Survival & Success

What has been illustrated is an affordable government healthcare system

that automatically covers every citizen and exhibits hardly any grounds for denial.
But with every citizen immediately covered, regardless of health, gender, age, or
income what would keep private insurers in business? What would prevent a single
payer, universal system from dominating the market? Why would citizens opt out of
essentially free insurance to choose a corporate provider? What would create this
option for the public?

The answer to these questions rests in tax incentives, economics, and

logistics. First- individuals who opted out of the government provided health
insurance would receive a substantial tax reduction upwards of 3%. Many citizens
especially the more fortunate would likely opt for a private insurance. This would
be good for both private insurers and the state. It is also only logical, considering the

Alternative Reform: The Corporate Side

government wouldnt be paying for their healthcare as long as they remained
covered by private insurers.

Second- by removing borders on health insurance companies and allowing

private insurers to compete all throughout the country, simple economic principles
would come into play. The creation of a government paid healthcare would not
simply put corporations out of business. Corporate leaders are smart, greedy, and
innovative. Corporations dependably fight to survive. With the extremely low price
of government provided healthcare, these insurance companies would resultantly
have to lower their price and increase their quality to compete. Furthermore
(without borders confining their marketplace) private insurers would compete
amongst themselves as well. The result? A universal drop in price increase in
quality or bothall of which moves toward a general market-clearing price.
Naturally, throughout the process some private insurers would go out of business.
But this would only be because other companies were performing better. This
would only be in the best interest of the consumer- the U.S. citizen.

To reiterate: private insurers would have to compete hard against the

government and one another. As aforementioned, their prices would necessarily

lower. But on a more drastic level, their quality would need to rise above the
governments to stay in business. This would not be an insurmountable task; though
the government side would be affordable to implement and all encompassingit
would surely have a multitude of flaws incentivizing a switch to private insurers.
These flaws would include a lack of doctor choice for the patient, increased wait
times for non-emergency issues, and more generic care amongst multiple other

Policy Makers and Objections

issues. Though free, able individuals would likely leave the governments care for
the tax break and increased quality elsewhere. Those incapable, however, would
still be covered by the government!

Policy Makers- Implementing the Change

The policy makers who could have an impact on reforming this issue are

plentiful. Of course, the most influential policy maker would stand as the U.S.
President. While this man/woman could not specifically implement anything
without executive action, a policy change on their platform is very likely to occur as
they often wield the most bargaining power on any subject. Obviously, other
policy makers below would include both the Congress and Senate (as demonstrated
when they voted to repeal the ACA in the past. However, moving away from
repealing the Affordable Care Act and moving into the implementation of the Public
Option type system, the policy makers become numerous. Certainly, Congress,
Senate, and the President would need to be involved and could be heavily
influential. But to reform the medical healthcare system, a multitude of actors would
become necessary such as the Department of Health and Human Services, hospitals,
and even the individual insurance companies. Implementing this policy would likely
take action all the way down to mere administrators- it is therefore impossible to
list all of them. But politicians, Washington departments, insurance companies, and
all others providing some sort of health services would need involved.

Objections to the Reform

Such a monumental policy change (involving both the repealing of the

Affordable Care Act and the implementation of a Public Option variation of

Objections

healthcare) obviously does not come without objections. Any refutations regarding
the Affordable Care Act can be settled by simply reexamining the statistics (those
noted in this brief in addition to those found elsewhere). The full examination of
stats all across the board show the ACA for what it truly is- attempted reform that
has gone awry and failed to achieve its goal. This is not the fault of the Democrats or
the President. Many acts go unsuccessful. But the failure should be acknowledged
and the act should be repealed to minimize damage now that the outcome is clear
and the opportunity is available. A majority of refutations are likely to surround the
healthcare reform toward the public option system.
The governments side would cause a massive increase in federal spending

This objection to the reform is entirely rational, reasonable, and expected. In

almost any scenario, implementing government provided healthcare would

absolutely and undeniably cause a massive increase in federal spending due to the
huge increase in people it must provide. However, it must be remembered that there
will be huge reform within healthcare services as well. The cuts of the unnecessary
services, fraud, missed prevention opportunities, excess administrative costs,
unnecessary services, inefficiently delivered services, or anything else deemed
necessary could free an excess of $750 billion dollars. As aforementioned, the U.S.
already spends the most in the world on its healthcare despite having a low quality
and not covering every citizen. Spending more intelligently, or less, will make the
government healthcare affordable. There would not be a massive increase in federal
spending- if there were, it would be a minimal increase. For further answers to this

Objections

objection, the healthcare reforms on the previous pages all discuss monetary
savings.
Insurers would go out of business

As aforementioned, this objection is reasonable as well. Its also correct;

some private insurers would absolutely go out of business but only those unable
to satisfy the consumer in the changing market. Only those who didnt provide
efficient coverage to the consumer in the first place.

On average though, the government provided healthcare would only increase

competition. It would not arise as some market-dominating system, as the

surrounding flaws would be numerous. The state-funded healthcare would disallow
doctor choice, increase wait times, and incorporate more generic care all amongst
a multitude of other downfalls. Leaving the governments coverage would also entail
the aforementioned tax incentive. Again, quality corporations would not go out of
business; they would just have to compete harder, increase their quality, and
decrease their costall in the interest of the American citizen.

Universal or privatized healthcare would be better

This polarizing objection is the most likely to arise. In the world of politics

split between left and right that exists today, many would likely opt for one or the
other. Liberals for the former. Conservatives for the latter. Unfortunately, most
solutions always rest in compromise. Though the two political parties would
struggle to compromise on such a deal, this public option form of healthcare would
see benefits to both corporations and the government, as well as the average
American citizen. At the end of the day, every U.S. citizen would be covered by

Conclusion

healthcare and the corporations would still be thriving and competing in a capitalist
market. Again, as aforementioned, universal and free-market healthcare would see a
multitude of debilitating issues affecting far more than just the provider. This form
of public option would eliminate a majority of such flaws.

To Conclude

In 2010, President Barack Obama signed his name to one of the most

revolutionary acts in all U.S. history. Regardless of political affiliation, the Patient
Protection and Affordable Care Act implemented change in the lives of every
individual residing in America. Unfortunately as weeks became months and months
became years it became evident that this was no positive change. This was
revolutionary to America just as Eve biting the apple was revolutionary to mankind-
both were predominately detrimental. Its negative effects give it numerous grounds
for appeal. But adducting this negative change would only restore or intensify the
faults of the previous system. Resultantly, the alternative Public Option type of
healthcare should be implemented instead, for success lies in reason and
compromise, and the Public Option is reason and compromise. Amidst the turmoil of
todays political divide, U.S. citizens the constituents whom politicians have sworn
to represent - have been overlooked. Their well-being has been put second to party
politics and unreasonable, unfeasible solutions. The United States has got an issue.

But it can be resolved with this policy change.


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