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Paying for Health Care through Cost Shifting

January 2, 2017

Several discussions regarding who pays for health care have been had since the inception of Medicare and Medicaid in the United States' health care system. Medicaid in particular was designed to help the less fortunate in the society gain access to the basic needs of health care, hoping to minimize the number of uninsured citizens nationally. Arguments of the government robbing Peter to pay Paul's health care bills present as a result. Often times, the conclusion is that all tax paying citizens pay for the care of the uninsured in America. The distribution of such payments varies however. An argument on discussing who pays for health care is also often presented, as the notion that taxpayers have no choice in the matter is common.

An alternative argument would be that cost shifting does not have to be the burden of the people; it could be that of their employers. "Who really pays for health care?" is a paper that discussed the misconception that health care is largely funded by employers rather than taxpayers. Their paper states that "Failure to understand that individuals and households actually foot the entire health care bill perpetuates the idea that people can get great health benefits paid for by someone else. It leads to perverse and counterproductive ideas regarding health care reform." It explains that many reputable sources play significant role in the wrong information provided publicly daily. They mention the Centers for Medicare and Medicaid Services being a culprit, as well as the Services Employees International Union, New American Foundation, and politicians such as the former Secretary of State, Hillary Clinton.

Medicaid and Medicare are the largest payers of health care bills statistically, and the number continues to increase. The Affordable Care Act was designed to create reform, decrease overall cost of health care in America, and decrease the number of uninsured residents. The goal of decreasing overall health care cost includes tightening loose ends, improving efficiency, and decreasing readmissions; this frees up dollars to pay for the uninsured Americans truly needing health insurance benefits. This practice is known as #CostShifting as we discussed last week. Next week we will discuss some of the causes of Cost Shifting.

God Bless.


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