I think you’d have to search pretty hard to find a person in this country totally pleased with the ACA. For every element of it, there are those who think it changes too much, and those who think it changes to little, that government does too much or too little, that there are too many requirements for insurance companies, or too few. This is pretty standard for any bill drafted in an elected legislature. But the question is, is the thing salvageable? Can it lead to true affordable care? Was the title of the bill premature, or straight up misleading? I think there is a path to real health care savings, and it is more accessible if we keep the ACA.
The key to making the ACA work, which has not been discussed nearly enough by opponents or supporters, is the limit it places on insurance company’s overhead costs. By enforcing a medical loss ration of 80/20, the law limits how much money insurance can spend on overhead and profits – causing them to return over a billion dollars this year alone. I only bothered looking into the law because my father was bragging about his rebate. This alone, however, is not going to solve our problems with high health care costs – the problem of states being granted waivers, for example, needs to be cleared up. It can, however, be the first step.
Insurance companies are fully capable of of running at over a 95% medical loss ratio. There’s no reason the 80% rule can’t be gradually raised to up to 90%, saving customers even more money. More importantly, the ACA sets a precedent for federal mandates regarding how insurance companies make and use their revenues. It may in the short term raise more money for insurers, with its individual mandate, but having been passed and found constitutional, the ACA unlocks a hefty toolbox for controlling their rates in ways that benefit customers as well – growing closer and closer to the Swiss model, allowing for a private but largely non-profit healthcare model that nonetheless leaves the health insurance industry able to provide supplementary services.
And that, my friends, would actually be a big $%&#ing deal.