Why repeal and replacement of the Affordable Care Act would have minimal impact, if it occurs at all

Bob Stearnes

Management in Healthcare: A Peer-Reviewed Journal, 2017, vol. 2, issue 2, 136-143

Abstract: While this author knows little about the inner workings of the legislative process, 25 years in the Revenue Cycle realm of the Hospital industry provided a great deal of education about how healthcare finance works. When managed healthcare (health maintenance organisations (HMOs) and preferred provider oraganisation (PPOs)) began to saturate the healthcare market with US$5 copays, a prediction was made that in 20 years or so, the country would devolve into indemnity-style coverage but with the rules and restrictions of the HMOs. Unfortunately this came true. As hospitals raised prices to offset contractual adjustment losses, insurance companies continually sought ways to manage costs and mitigate financial risk associated with claim payments. More recently, paying particular attention to the Affordable Care Act implementation and coupling with a historical view of healthcare and insurance cost structures led to the belief insurance costs would skyrocket. This too proved to be true without question. Having once been a proponent of totally eradicating this legislation, this author now believes some form of government intervention in the commercial healthcare market will remain and costs are unlikely to go down to any appreciable degree. There are many factors impacting the cost of healthcare and insurance to the consumer. This paper addresses three significant factors: the cost of care delivery, the cost of insurance and the impact of retaining facets of the Affordable Care Act in replacement legislation.

Keywords: Affordable Care Act; ACA; insurance; healthcare; hospitals; costs (search for similar items in EconPapers)
JEL-codes: I1 I10 (search for similar items in EconPapers)
Date: 2017
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