Subsidies Fail---2AC

Reich 16 (Robert Reich, Chancellor's Professor of Public Policy, University of California at Berkeley, Senior Fellow at the Blum Center for Developing Economies (“Why A Single-Payer Healthcare System Is Inevitable,” Huffington Post, August 28th, http://www.huffingtonpost.com/entry/why-a-single-payer-healthcare-system-is-inevitable_us_57bb38d0e4b0b51733a4e665)

The best argument for a single-payer health plan is the recent decision by giant health insurer Aetna to bail out next year from 11 of the 15 states where it sells Obamacare plans. Aetna’s decision follows similar moves by UnitedHealth Group, the nation’s largest health insurer, and by Humana, another one of the giants.

All claim they’re not making enough money because too many people with serious health problems are using the Obamacare exchanges, and not enough healthy people are signing up.

The problem isn’t Obamacare per se. It lies in the structure of private markets for health insurance – which creates powerful incentives to avoid sick people and attract healthy ones. Obamacare is just making this structural problem more obvious.

In a nutshell, the more sick people and the fewer healthy people a private for-profit insurer attracts, the less competitive that insurer becomes relative to other insurers that don’t attract as high a percentage of the sick but a higher percentage of the healthy.

Eventually, insurers that take in too many sick and too few healthy people are driven out of business.

If insurers had no idea who’d be sick and who’d be healthy when they sign up for insurance (and keep them insured at the same price even after they become sick), this wouldn’t be a problem. But they do know – and they’re developing more and more sophisticated ways of finding out.

Health insurers spend lots of time, effort, and money trying to attract people who have high odds of staying healthy (the young and the fit) while doing whatever they can to fend off those who have high odds of getting sick (the older, infirm, and the unfit).

As a result we end up with the most bizarre health-insurance system imaginable: One ever better designed to avoid sick people.

If this weren’t enough to convince rational people to do what most other advanced nations have done – create a single-payer system that insures everyone, funded by taxpayers – consider that America’s giant health insurers are now busily consolidating into ever-larger behemoths.

UnitedHealth is already humongous.

Aetna, meanwhile, is trying to buy Humana in a deal that will create the second-largest health insurer in the nation, with 33 million members. The Justice Department has so far blocked the deal.

Insurers say they’re consolidating in order to reap economies of scale. But there’s little evidence that large size generates cost savings.

In reality, they’re becoming huge to get more bargaining leverage over everyone they do business with – hospitals, doctors, employers, the government, and consumers. That way they make even bigger profits.

But these bigger profits come at the expense of hospitals, doctors, employers, the government, and, ultimately, taxpayers and consumers.

There’s abundant evidence, for example, that when health insurers merge, premiums rise. researchers found, for example, that after Aetna merged with Prudential HealthCare in 1999, premiums rose 7 percent higher than had the merger not occurred.

What to do? In the short term, Obamacare can be patched up by enlarging government subsidies for purchasing insurance, and ensuring that healthy Americans buy insurance, as the law requires.

But these are band aids. The real choice in the future is either a hugely expensive for-profit oligopoly with the market power to charge high prices even to healthy people and stop insuring sick people.

Or else a government-run single payer system – such as is in place in almost every other advanced economy – dedicated to lower premiums and better care for everyone.

CSR fails

Geyman 17 [John Geyman, M.D. is professor emeritus of family medicine at the University of Washington School of Medicine, a family physician with 21 years in academic medicine, Professor Emeritus of Family Medicine at the University of Washington School of Medicine, former editor of The Journal of the American Board of Family Medicine, member of the Institute of Medicine, now the National Academy of Medicine former president of Physicians for a National Health Program International Journal of Health Services, 5-26, http://pnhp.org/blog/2017/05/26/crossroads-in-u-s-health-care-which-of-three-financing-alternatives/]

Almost two million Americans go through bankruptcy every year because of medical bills and illness, despite most having had insurance, owning their own homes, having attended college, and having held responsible jobs.

Under the ACA, insurers have consolidated and narrowed networks, resulting in restricted access to care.

There are still about 28 million Americans without any health insurance.

Many physicians refuse to see uninsured patients, even those with Medicaid coverage, and waiting times can be lengthy if they are to be seen.

There are still widespread disparities of care, including by race/ethnicity, socioeconomic status, age, gender, location, and disability status, that lead many people to forgo necessary care and suffer worse outcomes.

Studies by the Commonwealth Fund find that the U. S. ranks #11 among 11 advanced countries in overall ranking, cost-restricted access, efficiency, equity, and healthy lives (2).

Under our multi-payer system with some 1,300 private insurers seeking to enroll healthier patients and avoid sicker patients, the health care bureaucracy is massive and expensive—the overhead of the private health insurance industry is $792 per capita, more than five times that of Canada with its single-payer public financing system.

Facing uncertainty over the future of government funding for cost-sharing payments under the ACA, the extent of deregulation that will come out of the current political debate, and the future of Medicaid, insurers are planning sharp premium increases in 2018 and threatening to exit even more markets than they have left already. People living in rural areas are especially vulnerable to these changes.

The new Trump budget proposal would cut federal spending by $3.6 trillion over ten years, with deep cuts to Medicaid and other safety net programs.

Comparison of Three Financing Alternatives

1. Continuing the ACA (ObamaCare)

The ACA brought important improvements in access to care, providing new coverage for 24 million Americans, especially through expansion of Medicaid in 31 states. It established ten categories of essential health benefits, and also required insurers to stop denying coverage for pre-existing conditions and allow children to stay on their parents’ coverage until age 26. Cost-sharing reduction (CSR) payments were made to help 7 million people afford coverage through the exchanges, about 60 percent of all new enrollees.

Despite these improvements, the ACA falls far short of our needs on many counts. Costs and prices of health care services have continued to soar, forcing many people to forgo necessary care and incur worse outcomes. Although the ACA expanded funding for community health centers, we still have a porous safety net that will become even more so under the proposed Trump budget proposal. Most Democrats are strongly defending the ACA against Republican attacks, calling for continuation of CSR payments and reconsideration of the public option, which was dropped in 2009 due to strong opposition from the insurance industry. That opposition remains today, and if put in place, the public option would attract more expensive, high-needs patients, relieving private insurers of the costs of covering them.