U.S. Health Care Costs are so High

Given the reasons why U.S. health care costs are so high, it seems unlikely that the ACA can cut costs significantly. First, the ACA continues the nation’s reliance on a vast web of insurers, thus guaranteeing huge administrative costs and inefficiencies. Second, health care providers (especially insurers) continue to have considerable control over the system. Most important, to appease health industry opponents, most proposals to incorporate well-established cost control mechanisms into the ACA were dropped from the bill before it was passed.

At the individual level, and as the story that opened this chapter illustrated, even insured Americans may continue to risk bankruptcy because of copayments, deductibles, and other services not covered by their insurance. In 2017, those who purchased the least expensive insurance plans available through state health exchanges were responsible for insurance deductibles of up to $7,000 for individuals and $14,000 for families (Cigna.com, 2017). In addition, individuals remain responsible for many costs not covered by their insurance such as drugs not approved by their plans or emergency care at hospitals not included in their plan’s network.

Finally, the ACA preserves the for-profit nature of our health care system. Within such a system, doctors, hospitals, and other health care providers will be pressured to find ways to generate profits through their decisions regarding admissions, diagnoses, tests, treatment, and so on. For example, two-thirds of for-profit hospices for the dying will not accept patients whose pain needs to be managed through chemotherapy or other expensive forms of care (Rao and Hellander, 2014). And as we’ve seen, even nonprofit organizations will be pressured to do the same in order to continue their work. Similarly, we can expect that for- profit insurers will continue to seek ways to enroll members who are relatively healthy and avoid potential members who might generate high medical bills. This will leave nonprofits and state health exchanges with a disproportionate number of members who have high medical bills, raising the cost of such plans in the end.