Many individuals pay monthly premiums to maintain health insurance; those with higher incomes may receive subsidies to offset some of these costs.
The Affordable Care Act prohibits health insurers from denying coverage to those with preexisting conditions and requires them to spend at least 80 percent of premiums on clinical care services.
What was Obamacare?
Political topics can be abstract subjects; but understanding their effects in real-life applications, like health insurance, is a completely different matter.
Before the Affordable Care Act (Obamacare) came into play, many Americans didn’t have access to affordable health care coverage. Many were denied policies due to preexisting conditions or were forced to pay exorbitant premiums for subpar coverage.
The Affordable Care Act created healthcare marketplaces where individuals could compare plans and select those best suited to them. Furthermore, all medical plans must cover 10 essential health benefits, such as emergency services, hospitalization, prescription drugs, pediatric dental and vision coverage for kids under 13, maternity care services, mental health services and lab tests.
The Affordable Care Act also eliminated lifetime and annual caps on benefit payouts, which had prevented patients from accessing health care they required in the past. And it established subsidies to assist Americans with lower incomes afford their healthcare coverage.
What is All Payer Healthcare?
Though the Affordable Care Act (ACA) has made significant strides toward providing universal health coverage, 30 million still lack coverage while others face high cost-sharing plans with limited options. A more affordable health care approach must be developed.
One effective strategy for providing health care is an all-payer system, or universal health care coverage system. All-payer systems regulate prices through rate setting; where all payers (private insurance companies, self-insured employers and government programs like Medicare) agree on paying the same rates at each hospital for identical services provided there. Global budgets also help limit overall hospital spending over time by setting a limit of total spending during a specific time period.
Critics counter that rate-setting is no magic solution and point out there are multiple factors affecting overall healthcare costs. Furthermore, they fear if hospitals were tied into setting fixed prices per procedure they may lose incentive for innovation.
Why Transition to All Payer Healthcare?
Some health policy experts advocate moving the United States toward single payer healthcare, with all Americans covered under one government plan that allows them to select providers based on performance criteria. But an all-payer rate setting system could also work as an effective solution.
Most countries with national healthcare systems use all-payer rate setting to contain costs, by purchasing in bulk – much like Costco – and using this purchasing power to negotiate better hospital rates.
Our current system of high-cost private insurance is unsustainable. Although the Affordable Care Act has brought great strides forward, more needs to be done if we want universal coverage. Failing this could result in unnecessary deaths as 30 million Americans continue living without coverage today. A universal, efficient, coordinated system which controls costs while improving access would provide affordable yet accessible insurance solutions to all Americans.
What is Medicare for All?
Medicare for All’s primary aim is universal healthcare access, yet it could also serve as a major economic driver by uncoupling healthcare from employment and decreasing reliance on wages in our economy. A study of existing analyses concluded that moving towards single payer would yield substantial savings even when factoring in upfront costs and tax increases.
This new model would enable us to reduce healthcare prices and administrative costs by eliminating profit incentives for private insurers to over-reimburse healthcare providers. Furthermore, this approach would enhance efficiency by permitting government officials to negotiate directly with healthcare providers rather than individual insurers over pricing structures.
Bernie Sanders first introduced the all-payer model during his 2020 presidential campaign and it has quickly gained support both inside and outside Congress. Over 300 local, state, and national organizations representing nurses, doctors, small business owners and racial justice have endorsed it; PNHP will add any financing studies as they become available here.
