Article by Dr.Paul Song
The Affordable Care Act (ACA) commonly known as Obamacare expanded healthcare coverage to approximately 4.6 million Californians and cut the uninsured rate in the Golden state from 16% in 2013 to 8.6% in 2016.
Despite over 60 attempts by Republicans under President Obama to repeal the ACA, and one recently botched effort under President Trump, the overall threat of a radically weakened ACA remains, placing the healthcare of millions of Californians at constant risk. It also leaves California in a constant state of financial uncertainty with regard to its aggressive Medicaid expansion.
Yet, even without any GOP repeal, 2.9 million Californians remain uninsured, of which a third are undocumented, 75% are from communities of color, and approximately 250,000 are kids.
Because most of the ACA was largely written by the private insurance and pharmaceutical industries, the ACA had no provisions to regulate health insurance premiums or rising prescription drug costs. As a result insurance premiums have increased roughly 200% in the past 10 years in California and a recent Kaiser Family Foundation study shows that the number of insured Americans that have trouble affording their premiums has increased from 27 to 37 percent since 2015, while the number of folks who have trouble with their deductibles has increased from 34 to 43 percent.
Meanwhile, one in 10 seniors cannot afford their prescriptions and one-third of all insured Americans delay seeking care because they cannot afford their co-pays and deductibles, while medical illness remains the number one cause of bankruptcies.
To date, Covered California has one of the most limited exchanges in the country in terms of having 75% of all their plans with very narrow networks (patients have access to 25% or less of physicians in a defined area). And premiums for 2017 jumped an average of 13.2%, three times the increase within the past two years.
Healthcare benefits remain a major source of labor negotiation strife as workers are being forced to contribute more towards their own healthcare while companies are handcuffed by skyrocketing premiums, which leave less money for capital improvements and their own R&D.
And, California has a $150 Billion unfunded retiree healthcare liability that has never been addressed.
So what is California to do?
California’s fragmented multi-payer system takes upwards of 20 cents of every healthcare dollar away from actual patient care to spend towards administrative costs often used to deny care, marketing, overhead, and executive compensation. A 2005 study by the Lewin Group revealed that a “single payer” system rather than multiple insurers to oversee funding of a private healthcare delivery system would save California a minimum of $20 Billion in the first year alone in administrative savings. At the same time it would expand coverage to care for everyone without requiring massive new taxes or spending.