My turn: Health Care — at what price?

In a telling moment on Meet the Press (Sept 9, 2012), the Republican nominee for President, Mitt Romney, confessed that he did not want to get rid of all of the benefits of the Affordable Care Act (ACA) colloquially known as “Obamacare”. He began listing the various programs he would like to keep in his own healthcare—cover pre-existing conditions; parental coverage for children into young adulthood; restriction against lifetime caps, etc. We never got a chance to hear whether he had been converted to all of ACA because the moderator, David Gregory, kindly interrupted. While Romney has since recanted his departure from the Republican call for the repeal [in its entirey] of Obamacare, his lapse illustrates the love-hate relationship that many Republicans seem to have at the “promise” (or threat) of ridding the country of health, healthcare, and the cost of government. And this very ambivalence calls on all of us to look carefully at the likely cost of doing so.

There are two great categories that define the cost of having or not having a comprehensive healthcare program. First and foremost the human costs incurred by those who do not have or cannot afford the insurance premiums that would otherwise allow them to be protected in today’s system. This figure includes but is not limited to the more than 32 million people in the United States who were uninsured before 2011 and the estimated 129 million (129,000,000) who have pre-existing conditions. These latter individuals would be covered by the ACA, but dropped from the current indemnity and managed care systems (Kaiser Family Health report). We probably all know at least one person or family who contracted cancer, heart disease, or simply old age and whose coverage was terminated without notice. Or, perhaps, we know a family who suffered an illness or an accident that required long hospitalization and then rehabilitation which pushed their costs to the hundreds of thousands of dollars and who then were refused coverage for their care because some functionary called the treatment “optional” or “cosmetic” or “elective”. This will not happen under Obamacare.

A society has two options when their citizens incur such unexpected and extreme costs. They can either let these people shift for themselves or follow the scriptural admonition (Matthew 25:40, King James version), “..if you do unto the least of these my brethren, you do it unto me”. The Judeo-Christian tradition admonishes us to take care of our neighbor and to treat him/her as we would want to be treated ourselves. On the other hand, it is popular in circles who want to repeal healthcare policies, to urge that everyone who is so shortsighted as to fail to purchase healthcare while they are well should simply be turned away from care for being “irresponsible”. Certainly this was the message from Romney when he told his donors in Florida that 47% of the population were unwilling to take responsibility for themselves and wanted the government to take care of them. More recently, when Romney was questioned on Meet the Press, about what should befall a man who discovers he has terminal heart disease but who has been unable to purchase insurance, his response was to tell the man that “it doesn’t work like that….you should purchase insurance before you get sick….”

Fortunately for many of us, a benevolent society assumes the responsibility to help protect us from unforeseen accidents and decisions made in haste, poverty, and ignorance from becoming a damnation for life. Some decisions are potentially irreversible, of course (e.g, the decision of a 9 year old boy to play with a loaded gun, the attempt to pass another car on a yellow line, the decision to commit suicide) but the failure to pay an insurance premium does not have to be one.

Of course, once we, as a society, make the benevolent decision to care for our neighbors and help those who are less fortunate than we, the second great cost of healthcare becomes visible. It is the financial cost of doing so. In our best of hearts we want to help less fortunate others who are in genuine need and ensure that our own families have the care that they need when crises arise. But, we want to do it at the least cost. Here is where the tough decisions arise, where the “facts” become illusive, and where lies are told.

Perhaps thousands of people in this debate about healthcare, have heard the declaration, originated by Rush Limbaugh (June 28, 2012), that Obamacare will incur the largest tax hike in history. This is a scary thought in an all ready wrung out society. But, while it is true that the cost of ACA is high ($675 billion derived from over a dozen taxes, excluding premiums and fines), this figure must be offset by several factors. These include premiums that are returned to patients because of insurance company overcharge, the effect of reducing or eliminating premiums on overly expensive Cadillac programs, and the gradual reduction in the ratio of specialists to general practitioners in the medical workforce. Overall, the program is expected to result in a savings of $124 billion in the first 10 years (Congressional Budget Office).

To put Mr. Limbaugh’s claim into perspective, we turn to the acknowledged authority on the matter of cost, Mr. J. Tempalski who is an analyst with the U.S. Treasury Department. Mr. Tempalski has served for both Republican and Democratic administrations. He was asked by FactCheck to compare the expected annual cost of Obamacare when it is fully implemented in 2014 to the annual cost of every tax increase passed since 1968 (he used the fourth year after passage as the comparison to match the ACA longevity in 2014). The figures were adjusted for inflation, real economic growth, and the size of federal tax receipts to make them comparable over time, with the comparison being expressed as the percentage of the Gross Domestic Product (GDP).

Mr. Tempalski concluded that by far the largest taxation increase occurred in 1942 when an increase of taxes exceeded 5% of the GDP. This compares to the Affordable Care Act that raises taxes only by .43% of the GDP. The “Revenue Act of 1942” was necessitated in order to finance the war, which was raging in both Germany and Japan. In our case, our dual wars were not funded but simply transferred to debt by the Bush administration. In other words, he simply put them on a credit card. Moreover, if the 10 largest tax increases since 1968 are arranged in order of magnitude, the ACA increase of 2014 ranks a poor seventh in percentage of GDP.

But the real, “Net Cost” of Obamacare (ACA) cannot be calculated until one can balance the direct financial cost against the value of those human lives saved. The real savings is likely to be greatest among those 160,000,000 real people whose lives and health are being jeopardized by the current insurance system.

Larry Beutler has a Ph.D in Psychology and is a professor emeritus at UC Santa Barbara, a professor emeritus at Palo Alto University, and a consulting professor at Stanford University. Jamie Beutler is a retired special education teacher, a board member for the El Dorado Community Health Center, and a volunteer for All About Equine Horse Rescue.