health care act

good morning hank, it's tuesday- what is thisweird, non-airport background? anyway, yesterday was the five year anniversary of the signingof the affordable care act, widely known as obamacare, which made me wonder if it's, ya'know,like, uh... worked. so here's the summary of what i found. inthe united states in 2009 more of my tax dollars went to healthcare than would if i lived injapan, or the united kingdom, or australia, and in exchange for all of that money we didnot get the universal health care that people in all of those countries enjoy. five years later, in 2014, we spent aboutthe same percentage of our gdp on health care, and we still don't have universal health carebut we do have less un-universal health care.

by the way, i'm going to oversimplify herea lot. for better information, you should check out "healthcare triage". so here's how it worked in the halcyon, pre-obamacaredays of 2009: the government provided insurance to elderly people, through medicare, and alsoto some poor people, through medicaid. many other people got insurance through their jobsor paid for it themselves, but this still left a lot of people out: like there were44 million people without insurance. this was obviously a problem for those 44million people, but it was also a problem for the rest of us because we did have a kindof universal healthcare in the united states: like when uninsured people got sick and wentto the hospital, they did receive care and,

if later, they couldn't pay for that care,those costs would be absorbed, either by the rest of us paying higher prices for healthcare,or else by taxes, because the government had to subsidize public hospitals. but it wasn't really universal healthcare,because you can't, like, go into an emergency department and get your week's supply of insulinif you're diabetic. so in the us we didn't, and still don't, have real universal healthcare,we have, like, if-you-get-shot,-we-will-try-to-patch-that-up-for-you universal healthcare. and this system was astonishingly inefficient.like, we spent more than 17% of our total gross domestic product on healthcare. in countrieslike canada and france and australia and the

netherlands, they spend less than 10% of theirgdp on healthcare, and they get similar, or in many cases better, health outcomes. also, back in 2009, insurers could deny youaccess to healthcare insurance if you had a "pre-existing condition": a phrase intentionallyso broad that it encompassed, like, everything. for instance, henry reich of "minute physics"was once denied insurance because he had the pre-existing condition of tinnitus, or ringingin his ear. the only way to get around the pre-existingcondition clause was if you worked for a big company, you could get insurance through them.and that, of course, incentivized people to work for big companies when they might otherwisebe doing different kinds of work, like...i

don't know, making "minute physics" videos. so, the affordable care act sought to makethe labor market less bananas; decrease health related bankruptcies, the number one causeof bankruptcy in the united states; and, ultimately, to insure those 44 million people withoutinsurance, while, at the same time, over time decreasing the amount of money we spend onhealthcare. it was going to solve the access problem bycreating these healthcare exchanges where private companies could compete for people'sbusiness, but they couldn't discriminate based on gender or pre-existing conditions. the law also would expand medicaid, whichwould get insurance to more poor people, and

it required companies with more than 50 employeesto provide affordable insurance to their employees, or else pay a gigantic penalty. this would all be paid for, more than paidfor, hopefully, by cost control measures. these range from getting tougher on medicarefraud, to incentivizing hospitals to keep elderly patients healthy so they don't getreadmitted to the hospital. there's also a new tax on, like, tanning salons,and an increase in the medicare payroll tax for income over $250,000 a year. but has it worked? yes - insofar as things are better than before.and also...no - insofar as we are nowhere

close to a path to sustainable healthcarespending. so the aca was phased in slowly, and the realmeat of it didn't get going until 2014. you'll recall the roll-out of the healthcare exchangesin late 2013 was...a complete disaster. the website, healthcare.gov, was plagued withglitches and really just...didn't work. admittedly, buying private insurance in theus before the obamacare exchanges was arguably even worse than healthcare.gov. but it wasjust terrible. i remember trying to sign up in those early months and it was truly awful.what has not been widely reported is that, now, it's really easy. in general, the exchanges now work very welland more than 12 million americans, including

me, have signed up for insurance through them.insurance premiums are going up, on average, more slowly than they did before the exchanges,and more insurers are participating, which means there will be more competition in themarket. plus, the law is costing less than expectedbecause fewer employers than expected have dropped fewer people than expected off theirinsurance. and, it doesn't seem to be negatively affecting the job market. it certainly led to more freedom in the labormarket. for instance, sarah green could leave her insurance-providing museum job to startan art show with pbs digital. and certainly for people who can get insurancenow who couldn't before, either because of

pre-existing conditions or because they couldn'tafford without the government subsidies, the aca is a really big deal. and none of thecollapse of the healthcare system or "death panel" predictions have come to pass. instead, uninsurance rates in the u.s. havedropped dramatically, and early signs indicate that at least in some sectors the law is improvinghealth. by the way, sources for all this stuff in the doobly-doo. on the other hand, many millions of peoplestill don't have insurance and under-insurance, where people technically have insurance butstill end up with medical bills they can't afford is a huge problem.

and while the growth of our healthcare costshas slowed, we still spend over 17 percent of our gdp on healthcare. most other developedcountries spend far less than that and still have citizens who live longer and healthierlives than americans. and before you say that's because americanseat or drink or smoke or whatever more than british people: no, that's simply not true!have you ever met an actual british person? i don't mean like jack or finn or charlie,i mean a real one. so yeah, if nothing changes, healthcare costsare still going to crush us in the long run, because the thing about the aca is that it'snot particularly radical. like, the 12 million people who got insurance through the exchanges,that's less than 4% of americans.

for the vast majority of people, very littlehas changed, and that means that the underlying problems haven't really changed. we spendway too much on healthcare, and we get too little in return. to take that seriously would require radicalchange: government interventions like price controls, for instance. or a single-payerhealthcare system, or a truly free market system where if you show up to the hospitalwith a gunshot wound and you can't pay for treatment, you don't get treatment. so hank, the old system definitely wasn'tworking, and the aca is working, in so far as its job is to get health insurance to peoplewho don't have it without disturbing the health

insurance ecosystem for most people. but the aca didn't really replace an existingsystem so much as it grew on top of it. now the fact that so many insurers are bringingmore plans to the exchanges indicates that probably the aca will continue to work, unlessthe supreme court eviscerates it in a few months. but the aca has not and will not solve thelong-term healthcare spending challenge that we face. neither, of course, would repealingthe law, if anything the the healthcare spending problem was worse before obamacare. ratherthan the endless discussions of repeal or defend we should be frank about the choicesbefore us.

as healthcare economist and healthcare triagehost aaron carroll told me, trade-offs are messy. you can get reform more easily andmore cleanly, but not necessarily while preserving the private market. you can make healthcarecheaper, but not without imposing even more regulation. you can insure more people and make it costless for everyone, but not without spending more tax dollars. hank, healthcare policyexperts across the political spectrum seem to acknowledge this complex reality. it'sour job now to make our politicians acknowledge it too. again, for more information and lots of othervideos about healthcare, please check out

healthcare triage. hank, thanks for reminding me last week aboutthe many pleasures of being in a crowd, i will see you on friday.