Close Close

Life Health > Health Insurance

Why single-payer backers hate the PPACA exchange system

Your article was successfully shared with the contacts you provided.

Even plenty of U.S. fans of “single-payer health care” — government-run systems for paying for care — prefer the Patient Protection and Affordable Care Act of 2010 (PPACA) and the PPACA exchange system to what the country had in 2009.

See also: Vermont governor’s nightmare is almost over

But single-payer system supporters were attacking the legislation that became PPACA from the left even as it jolted through Congress.

Today, now that the PPACA underwriting rules, benefits mandates and exchange system have come to life, they have new data, based on observations of PPACA World, to add to their critiques.

Two single-payer advocates, Dr. David Himmelstein and Dr. Steffie Woolhandler, the co-founders of Physicians for a National Health Program, have published a commentary blasting the PPACA exchange system on the website of Health Affairs, a health finance and health care delivery academic journal.

PPACA defenders argue that members of Congress had to balance the interests of insurers, health care providers, patients, taxpayers and other parties when they created the current system, and that the current system lets consumers with health problems pay the same price for private coverage that healthy consumers pay. Defenders also point out that the implementation of the PPACA Medicaid expansion program and the PPACA exchange program led to a big, immediate decrease in the U.S. uninsurance rate in 2014.

See also: These are the 5 states with the lowest uninsured rates

For a look at what Himmelstein and Woolhandler say about PPACA, read on. 

Dollar bill

1. The average cost of getting uninsured people covered is high.

PPACA-related administration costs added about $17 billion to U.S. health care spending in 2014 and will add about $26 billion to spending this year, Himmelstein and Woolhandler estimate.

PPACA-related administration costs could add about $274 billion to health care spending from 2014 through 2022, or an average of about $1,375 per newly insured person, with about two-thirds of that money going to private insurers, the authors say.

The new, ongoing overhead costs come on top of the $6 billion the country spent to set up the exchange system, the authors say.

See also: CBO Analyzes Cost Of “Bronze Plans”

Lazy boss

2. Administration costs will also eat up a large percentage of PPACA Medicaid expansion spending.

Medicaid and other government health programs are on track to spending about $101 billion extra from 2014 through 2022 on account of PPACA, but even most of the extra public program spending will go to private Medicaid managed care plan managers, Himmelstein and Woolhandler write.

Because of the shift to private Medicaid plan managers, the percentage of Medicaid spending going to overhead has risen to 9.2 percent this year, from 5.1 percent in 1980, Himmelstein and Woolhandler say.

See also: Concord Coalition: H.R. 3962 Costlier Than CBO Says

Young woman at a computer

3. Relying on consumers to use the exchange system leaves tens of millions of people uninsured

The Congressional Budget Office is expecting the PPACA exchange system and PPACA Medicaid systems to help another 25 million people get covered, but overhead expenses account for just 2 percent of traditional Medicare spending, suggesting that the government could cover the same people much more cheaply by simply letting them sign up for traditional Medicare, Himmelstein and Woolhandler say.

 See also: CBO Analyzes GOP Health Proposal