Health Care in the U.S.:
A Disaster

Apr 14, 2014

Almost seven million people have registered, or had tried to register, on the health insurance exchanges under the Affordable Care Act. The threat was that those not yet enrolled in a health insurance plan by March 31 would face penalties. It might cost $95 in penalties next year. But depending on a family’s income, the penalty might reach $500.

The fact is that only a small percentage of the uninsured in the U.S. have enrolled. Perhaps seven million have finally gotten insurance, which isn’t clear because registering is not the same as receiving an insurance card. The Obama administration crows about that seven million. But 30 million more remain uninsured. The media attribute the small numbers to the mess of the roll-out of the Affordable Care Act. And it’s true it has been a mess.

But the real problem is that the U.S. health care system is all about profit. Right now, health insurers make profit, hospitals make profit, drug manufacturers make profit, medical partnerships make profit, medical equipment manufacturers make profit, etc. And each component adds to the cost—even if the CEOs of these companies didn’t reward themselves with million-dollar salaries.

An Act of, by and for the Largest Corporations

The Affordable Care Act is in no way a challenge to the for-profit system. It will actually add to the profits of the health insurers. That’s no surprise, because the health insurance industry wrote the Act. The Act was passed by Congress to allow the industry to get more profit from signing up more customers. The 13,000 different health insurance companies in the U.S. get to have a piece of the pie.

But when it turned out that people weren’t rushing to sign up for this so-called improvement, Congress showed what the whole act was about. It slipped in a little 16 billion-dollar gift from the taxpayers to the health insurance companies. They get a payment if they don’t get as many customers as the Affordable Care Act was promising them.

In addition, the Affordable Care Act allows companies to take at least 10% for so-called administrative expenses. Yet there are systems both in the U.S. and in other countries that have far lower administrative expenses. Medicare is estimated to pay less than 2%. So where does this difference end up? In the pockets of the owners or investors of health care companies.

Insurance companies are not the only ones feeding off the Affordable Care Act. The Act also grants profit to the hundreds of contractors and sub-contractors that have put together the federal and state systems of web sites—even when they don’t work.

In Maryland, for example, the health care web-site was shut down with thousands still trying to get insurance. But the contractors still got paid a large part of the 125 million dollars spent so far.

The health care system in the U.S. is so complex that it is hard to know what the costs are. Each drug company and each hospital and each doctor’s office charges different amounts for exactly the same drug or operation or procedure. And the amounts they charge can change according to which health insurance company is covering the health care given. That is an open door to the vultures looking for profit in this system.

But nothing in the Affordable Care Act challenges these costly complications.

Health-Insurance—the American Way

The U.S. spends more than $8,000 per person on health care, compared to an average of $3,000 per person in the other rich countries. Yet for all the money spent, the measurement of the health of the population shows the U.S. lags behind those other countries. A report last year by the National Academy of Sciences showed that the U.S. infant mortality rate is higher than in 16 other rich countries. The U.S. has a growing mortality gap for everyone up to age 75. On average, people in the U.S. have much higher rates of obesity and related diseases—which comes from poor nutrition.

Poor outcomes. But high costs leading to big profits!

A Possible Solution

Some medical professionals have long pointed to problems of the U.S. health care system. Few seem to think the solution is the Affordable Care Act, suggesting the need instead for some kind of system, like Medicare, but extended to the entire population. Or they say we need a system like those in Canada or most European countries that socializes medical care. In other words, a centralized system of medical care, which has been called “single payer.”

Medicare does not solve all the problems of this system by any means. There is still a profit component in the U.S. and in the health care systems of other countries, although they give health coverage to their entire population.

Even with Medicare covering a large part of the population, costs are still high for those with limited incomes. Sometimes thousands of dollars must still be paid toward health procedures or toward drugs. Poorer people must choose what to pay for, often going without needed health care.

But Medicare still has lower costs than other parts of the U.S. health care system because it is centralized, with one place handling all paper work and setting all prices. Despite all its problems, Medicare delivers better health outcomes overall than the rest of the health care system does.

Given the knowledge and technology available, society has the ability to offer decent medical care to everyone. Yet in this country, instead of good health care being the right of everyone, it remains a privilege for those who can afford it.