To answer the question "Can we afford this" we should first look at how health care was paid for before the Affordable Care Act, and how it will be paid for after ACA is implemented.

Before the Affordable Care Act, most of the costs associated with health care for uninsured people were shifted back to individuals and families - who in many cases had to use savings, sell homes, or even declare bankruptcy after a major illness occurred.  The cost to middle-class Americans was significant.

After the Affordable Care Act is implemented, less of the burden of illness among the uninsured will be assumed by individuals and families.

Health insurance premiums will become more affordable through health insurance exchanges, and many people who were not eligible for health insurance before will now be able to purchase health insurance (thanks to the elimination of pre-existing condition exclusions by health insurance companies).  Medicaid will be expanded to cover more families in need.

How will the government pay for this?

The money to cover the new programs is expected to come from savings in Medicare and Medicaid and yet-to-be-determined new taxes and fees.

The expansion of Medicaid will be paid by the federal government, but the cost of Medicaid is still a significant burden to many states including Colorado.  Money will be saved in the following ways:

  • Uncompensated care (care that health care providers provide but do not receive payment for) is expected to decrease with expanded coverage.
  • Changes to the healthcare system such as the medical home model are expected to increase the efficiency of the health care system and decrease costs.
  • Providing timely care will decrease costs by encouraging people to receive regular and preventive medical care, before they become chronically sick and require more expensive treatments.

Why prevention is so important

A key factor in our ability to decrease the cost of health care is to prevent chronic conditions, like heart disease, cancer, stroke, diabetes and arthritis.

In 2009, 75% of health care costs were due to chronic conditions.  More shocking, chronic diseases cause 7 in 10 deaths each year in the United States. Tobacco use, poor diet, physical inactivity, and alcohol abuse contribute to poor health and chronic disease.

A renewed and continuous focus on prevention will offer us an opportunity to not only improve our health but to control health care spending.

Can we Afford Not to Change?

Simple answer: No.

Health care organizations currently make money on a fee-for-service basis.  You go to your doctor for a check-up and then you (and hopefully your insurance company) get a bill in the mail.  If your doctor missed something and you have to go back, you have to pay all over again.

Fortunately, health care is changing.  Right now, all health care organizations are adopting a new model that puts you-the patient at the center of care.  The model is called pay-for-performance. Now, instead of getting paid just for seeing you, doctors will be held accountable for the quality of care they give.

Under this system, health care organizations receive a set fee for a particular type of patient.  This means that they receive a certain amount of money for seeing a diabetes patient and a different amount for seeing a patient with heart problems.  If the patient gets healthy and does not require additional care, the organization will make money.  If the patient has complications, the additional visits will come out of the original fee- not the patient's pocket.

This change will save all of us money.  The Department of Health and Human Services estimates that the pay-for performance model will reduce health care costs by $35 billion.