Much negative talk has been directed at the Affordable Care Act, or the ACA, otherwise known as Obamacare, from the Republican Congress as they tried to repeal it some 50 times. The ACA’s rollout through the government website was disastrous, and according to the Inspector General’s report, the total cost of the website reached $1.7 billion. Also, for years after it went into effect, its insurance policy premiums were going up substantially along with its deductible amounts, and choice of carriers for certain states were becoming fewer as different insurance companies were dropping out of those markets.
However, five years since it went fully into effect from January of 2014, things have actually stabilized with it and even gotten better. Some carriers have come back into certain markets. The initial shock to the system of introducing millions of new client/patients with prior undiagnosed conditions worked its way through the system and were dealt with. In quite a few states, premiums have actually come down, while in some they rose only modestly. Based on 2017 numbers, of the 12 million enrollees on the exchange, (83% of them receiving a premium subsidy), the average monthly premium was $89. The reason I’m bringing it up now is because of the new talk of the Progressive Democrat candidates pushing “Medicare for All.” Since both the left and the right have kicked Obamacare to the curb, if only in rhetoric, I wanted to take a dispassionate look at it to see what merits and demerits it really has.
I will list the pros here. It offers:
*Wellness and preventive checkups along with covered lab testing.
*Mental health treatments
*Medical equipment for chronic diseases such as multiple sclerosis.
*Dental and Vision
*Drug expenses that count toward one’s deductible
*Emergency care without regard to in or out of network
*Hospitalization that can cost multiple thousands per day.
*Children under 26, of which there were 3 million in 2012.
*Insurance exchange that shows all of the plans that are available.
*Middle class tax credit offsets for purchasing insurance for insureds under 400% of the poverty level
*Expanded Medicaid for people under 138% of the poverty level.
*Elimination of the Medicare Part D “Donut Hole” for seniors
*Mandating businesses with 50 employees to provide health insurance
According to the Congressional Budget Office, Obamacare would save $143 billion by the year 2022. It does so through three things:
1) Reduces catastrophic illnesses by catching them early through wellness checkups, 2) raises income and Medicare taxes on high-income earners such as individuals who make over $200k and couples who make over $250k and, 3) shifts some of the costs to medical providers and pharmaceutical companies.
Here are the cons:
* About 35 million people had to get different plans from what they had because their previous plans did not have the requisite features.
* Health care costs going up in the short term to deal with heretofore undiagnosed and untreated conditions.
* Still about 30 million people who are uninsured due to exemptions such as being homeless, illegal, belonging to an Indian tribe, or having a religious objection.
* Paying a penalty for not getting insurance, which was ultimately undone by the Trump administration.
* Raising taxes for those individuals earning more than $200k and for couples earning more than $250k.
* Medical device manufacturers pay an extra excise tax of 2% on their product.
* Medical expense deductions beginning at 10% rather than 7.5%, which was undone by the Trump administration.
* Pharmaceutical companies being saddled with an extra $84 billion for the period of 2013-2023 to pay for the Medicare “donut hole.”
* Insurance policies pay an extra 40% excise tax on Cadillac policies such as those with premiums for individuals of $10k and family premiums of $27k per year.
The upshot is this: It is quite an achievement to have reduced the uninsured population by about 20 million people since 2010 when parts of Obamacare first went into effect. If the Democrats would agree to medical malpractice awards limits it would save another $200 billion from medical costs per year from physicians not practicing defensive medicine anymore. The medical insurance mandate should be reinstated to prevent those who want to game the system by obtaining insurance once they acquire a disease, illness or injury, which is akin to someone buying property insurance after one’s house is on fire. The only thing that stops this from being a widespread practice is that people don’t want to wait until a disease is in a late stage of development. But the system is totally strategically “gameable” to those who are injured and only then acquire insurance. The only caveat to that is that if we are going to demand that young people buy insurance to begin with it is not fair or equitable to charge them “community rates,” meaning the same rates as those who are older. In medical care, the younger you are the less you should pay, which is the inverse of auto insurance, which is the highest for young drivers. Of course there should be competition between insurance carriers across state lines to bring prices down. The government should allow more medical schools to open to create more doctors. It is not a problem, as is often alleged by Republicans, that Obamacare offers too many features. Practically all of the features mentioned above are essential for medical insurance stability. The fact that maternity care is offered as a generic to all only means that premiums will reflect (if market competition exists) a lower cost to the average insured because not everyone will be utilizing that coverage.
In 2016, 155 million Americans were covered by company-based insurance plans, 50 million through the federal senior Medicare program, 60 million by Medicaid and Children’s Health Insurance Program (CHIP), 12 million by the ACA/Obamacare exchanges, 11 million by the ACA Medicaid expansion, and 10 million had other coverage, such as private insurance purchased outside the ACA exchanges. For the 30 million uninsurable people or those who don’t want to have insurance, it’s not necessary to make the whole system on the most basic Medicare for All level. If we want doctors to study hard to become the best and if we want patients to be able to buy the best medical care available it is imperative to preserve the integrity of the entrepreneurial spirit and merit-based economy as much as possible. Let’s say that Obamacare, with some adjustments, can be a very helpful supplement toward the health insurance market. So to all the progressives who want to make the health insurance field a one-size-fits-all, let’s just stick with what we have and put our heads together to make it even better. There’s actually no need from either side to blow up the system.