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Lost in the current debate of healthcare coverage are two charts that illustrate the real effect of the Affordable Care Act (ACA) on our healthcare system.

The first is our National Healthcare Expenditure – or NHE. The Office of the Actuary at the Centers for Medicare and Medicaid Services (CMS) estimates and forecasts our NHE for each year through 2022. They also forecast what the NHE would have been without the ACA. While the effect of the ACA is significant and meaningful in other ways, this chart highlights the nominal effect of the ACA on our NHE (through 2022). The data (published in January of last year) is online at http://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Tre
nds-and-Reports/NationalHealthExpendData/Downloads/Proj2012.pdf (pages 6 & 7 – Table 2/2a).



There is no way to color this forecast other than grim. Basically, on our current trajectory (with the ACA), in less than 10 years our NHE will be about $5 trillion per year.

Which begs the question. If Obamacare doesn’t really address the cost of healthcare – what big effect does it have – and what is all this current noise around winners and losers? In a single word, the big effect of the ACA is coverage – not cost.

Back in February of this year, the non-partisan Congressional Budget Office (CBO) reported about 58 million uninsured people in the U.S. ( http://www.businessinsider.com/why-rate-shock-is-an-essential-part-of-
health-reform-2013-10). That includes unauthorized immigrants and people who are eligible for, but not enrolled in, Medicaid.

It’s popular to argue that the number of uninsured is less, but what we also have to consider is what happens when anyone from this group shows up at an Emergency Room. The Emergency Medical Treatment and Active Labor Act (EMTALA) legislation ( http://en.wikipedia.org/wiki/Emergency_Medical_Treatment_and_Active_La
bor_Act) requires that everyone be treated ”regardless of ability to pay.” Some may be successful in applying for Medicaid coverage retroactively, but that’s a big unknown, and at least according to some, an unfair assumption.

The second chart is this one created from data by the CBO. Here’s how the CBO forecasts the effect of the ACA on the uninsured also through 2022 (February 2013 data at http://www.cbo.gov/sites/default/files/cbofiles/attachments/43900_ACAI
nsuranceCoverageEffects.pdf):

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In combination, these two charts highlight 4 critical points:

1) Our healthcare problems are much bigger than just our current debate around coverage and who qualifies as a winner or loser

2) The ACA doesn’t solve our uninsured problem (but it clearly and dramatically reverses the long standing trend of excluding people from coverage)

3) At least in theory – we’re adding millions to coverage without exploding our NHE

4) We haven’t really started the debate around the cost of healthcare – and how to reign in our enormous (and growing) NHE

The huge (and rising) cost of healthcare delivery really is the 800lb elephant in the room. Beyond that, the point these charts drive home is just how much work there is ahead after our scorched-earth battle of coverage. That battle often gravitates to the absurd idea of who’s paying for someone else’s coverage – and how much more (or less) that should be. In effect – what’s fair? The best answer I saw to this absurd question was a tweet I came across last month.

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“Everyone knows you don’t debate fairness with those too childish to understand adverse selection.” Austin Frakt – The Incidental Economist ( http://theincidentaleconomist.com/about/about-austin/)

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Beyond the fairness debate is the question of alternative solutions – and what are those? That refrain also remains the same – as summarized by Josh Barro late last month.

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“But what about the tens of millions of Americans who currently lack health insurance and are about to get access to available, affordable coverage? Where is the conservative sympathy for people who would be worse off if the law doesn’t go forward? Nowhere. Because for all the needless complexity of liberals’ approach to improving health insurance and helping the sick, conservatives don’t have one at all.” Josh Barro – Business Insider ( http://www.businessinsider.com/why-rate-shock-is-an-essential-part-of-
health-reform-2013-10)

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All of which brings us to one final chart. Of all the ones I’ve seen – and used – this one (with OECD data from 2011) still represents (at least for me) the best graphic representation of our continuing national healthcare crisis.


http://www.forbes.com/sites/danmunro/2013/11/07/the-two-obamacare-char
ts-that-no-ones-talking-about/

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