Robert’s Rules of Order

The Supreme Court has spoken and the political din is in full campaign mode. Dickens was half right. This is the worst of times for the democratic process. Partisanship has removed all rationality from the discussion of America’s health care system and the Affordable Care Act in particular.

Let’s be clear about the basic parameters of the system. Everybody has access to medical care. About 15% of the population is uninsured and have inadequate access to regular care but can receive care at emergency rooms. This is very expensive and the cost is shifted to those covered by insurance. The result is higher cost for those insured and greater morbidity for the uninsured. A Dickensian result. Everybody is worse off.

One component of the ACA proposed to extend Medicaid coverage (administered by the states and aimed at the poorest segments of the population) and offered, as a sweetener, to cover all of the costs for the first three years  The level of support would decline to 90% by 2020 and remain at that level. This provision was invalidated by the Court due to the penalty provision, so the states have the option of not extending coverage. Some governors have expressed an unwillingness to extend coverage under the rubric of avoiding future costs.

The states may avoid the costs but society won’t. It is an unforgiving law of economics that all bills get paid. It is just a matter of who pays, when and how? Medicaid expenditures explicitly recognize and cover these costs. Those states refusing the extended coverage aren’t reducing these costs; they are just shifting these costs to those covered by insurance. It means higher premiums for the insured. These costs are “hidden,” but no less real.

All of this roiling is another sorry example of the political system’s unwillingness to recognize that all balance sheets have two sides and hiding costs do not eliminate them.