Health Care Is the Puzzle Neither Party Can Solve

Spending tops $3 trillion but millions are without coverage

Senate Majority Leader Mitch McConnell. Win McNamee/Getty Images

After seven years of promising to repeal and replace Obamacare, Senate Majority Leader Mitch McConnell postponed the vote on the Republican alternative. He was wise to do so. But he was unwise in allowing it to get as far as it did, particularly without Senate debate or public scrutiny. The GOP plan was an embarrassment: a cynical slashing of coverage for the most vulnerable and a ham-handed tax cut for the wealthy.

Neither Republican plan—Senate or House—is what the vast majority of Americans want or what the country needs. It’s time for an honest debate about the issue, unsullied by rancor or partisan gamesmanship.

As President Trump noted, health care is complicated. Much but not all of that complication is driven by cost. But there are also philosophical dimensions, particularly about whether free market economics can control costs and deliver services adequately. And it is the Congress’ unwillingness to address the problems and the trade-offs that leaves so many people scared, inadequately served, and at risk—financially and medically.

Approximately 60 percent of Americans say the government should ensure health care coverage for all Americans. And that number is rising. Whether health care is a right or an entitlement is a debate worth having. But health care comes at a cost—a steep one that must be weighed against other public policy priorities.

We need to make the distinction between health care and health insurance. Obamacare was more about insurance than care, resulting in a far more convoluted plan than would have otherwise resulted. It is certainly no surprise to anyone familiar with health insurance company machinations—and one doesn’t have to be John Grisham to recognize them—that premiums are soaring.

Federal health care spending is currently a bit more than $1 trillion. It includes Medicare ($592 billion), Medicaid ($365 billion), Affordable Care Act (ACA) subsidies ($43 billion), and the Children’s Health Insurance Program ($14 billion). That doesn’t include what states spend on Medicaid (about $200 billion), the Tricare military health care program ($50 billion), or Department of Veterans Affairs health care spending ($63 billion).

Of course, those government expenditures don’t include what individuals and employers spend on health care services and insurance. In 2015, national health expenditures were $3.2 trillion, or $9,990 per person, accounting for 17.8 percent of Gross Domestic Product. That was an increase of 5.8 percent from the previous year.

Americans spend more on health care per person than almost every other country. A study by The World Bank comparing 2014 figures showed that only Switzerland (which spent $9,674 per capita) and Norway ($9,522) exceeded the U.S.’s spending ($9,403.) Other comparable countries spent significantly less: Canada ($5,292), France ($4,959), and the U.K. ($3,935).

Surprisingly, spending on health care doesn’t equate to better outcomes or longevity. A study by the Kaiser Family Foundation showed that life expectancy for Americans was lowest (78.8 years) among 12 comparable countries. (Japan is the highest at 83.7 years.)

Any honest conversation about health care in America must consider why costs are so high and outcomes so middling. And it must address the role of private insurance in those costs. As reported by Bloomberg, a study in the New England Journal of Medicine estimated that the administrative costs of private health insurance added 30 percent to U.S. health care costs.

Obamacare was a convoluted, inefficient solution to a complex problem. In the seven years since its passage, some 19 million people got access to coverage who wouldn’t have otherwise. But premiums are going up, deductibles and co-pays are becoming more onerous, and frustration is mounting. Unfortunately, as our friend Steve Rattner—who we often don’t agree with but whose analyses we respect—points out, premiums will soar under the Republican plan.

Providing all Americans with affordable access to health care will be difficult, expensive, and probably inevitable. The sooner the political venom is extracted from the process, the sooner we will be able to address these real challenges. Whether the president appoints a bi-partisan, blue-ribbon panel or the Congress a Select Committee, we do not care. But we urge our elected leaders to take the necessary steps to address health care responsibly, candidly and quickly.