A new report released last week reveals that 70% of what is spent on health care in California is covered by taxpayers, according to the UCLA Center for Health Policy Research.
The analysis debunks the common assumption that the US health care system is supported by private dollars, specifically from insurance premiums from employer-based coverage.
Medi-cal is California’s version of Medicaid, a social health care program for low-income individuals and families, and it has experienced a massive expansion. Medicare and Medi-cal are both funded by state taxes and these two programs alone cover 47% of the state’s entire health care expenditures.
Roughly $367 billion has been estimated to be spent on health care in California this year, with $260 billion coming from taxpayer’s pockets.
“There’s this myth that we have a mostly privately funded health care system, but we’re approaching a point in which almost three quarters of this system is funded by public money,” said Gerald Kominski, director of the UCLA Center for Health Policy Research and one of the report’s authors. “Now a question to ask ourselves is: when do we reach the tipping point and say ‘this is essentially a public system?”
California isn’t the only state dishing out state taxes to fund health care. 45% of the entire country’s health care is paid through social health care programs like Medicaid and Medicare, according to federal data. However, Kominiki believes that this figure is really closer to 65%.
In the case of California, the UCLA study showed that 12% of the state’s health care spending goes to tax subsidies for employer-based health insurance.
Prior to the Affordable Care Act, California’s health care system was primarily private. But now, Americans are not covered by their employers as much.
“After the ACA you now have more generous eligibility guidelines for public programs. You also have the factor of an aging population,” said Maribeth Shannon, a director at the California Health Care Foundation.
Unfortunately, insurance agencies are not making any money from the government subsidies. Almost all the leading health care providers have been forced to pull out of most of the healthcare.gov exchanges after reporting detrimental company losses after participating in the programs.
“The vast majority of payers have experienced continued financial stress within their individual public exchange business,” said Mark Bertolini, Aetna Chief Executive Officer in a statement. “Providing affordable, high-quality health care options to consumers is not possible without a balanced risk pool. We’ve got to be able to cover the costs associated with providing the care.”
Not to mention, insurance rates continue to rise as the options on exchanges dwindle.
This UCLA report proves that Obamacare is attacking private insurance and California is on the verge of being strictly a single-payer health care system.
“For a majority of Californians, a public-run system is already the reality,” said Andrea Sorensen.
This is just more evidence substantiating that the ACA has destroyed the health insurance industry.