On Obamacare

The Patient Protection and Affordable Care Act   (ACA) of May 1, 2010--a.k.a Obamacare is being implemented. The exchanges with the navigators--less the business mandate--will start advising and enrolling individuals on October 1, 2013 and the full implementation of the program gets underway on January 1, 2014.

Some people will welcome these events with open arms, while others will have a great deal of trepidation about them. The path to the final implementation of ACA has been rocky, and the journey does not appear to be getting smoother or easier. ACA's opponents are hell bent on destroying it--repeal, delay, defund--and put us on a road that does not lead to a better place. They manifest a virulent hatred for anything associated with its passage and with its inevitable implementation. It is true the president has not made a credible effort to proselyte and propagandize ACA to the American public--he has spent more time beating the war drums--he is demonstrably gong-ho about getting Congressional approval to attack Syria's arsenal of toxic biological weapons.  

On the other hand, the forces arrayed against the implementation ACA are if nothing else persistent. They include the House of Representative that has voted 42 times and counting to repeal ACA--these actions represent symbolic feel-good votes that will have no practical effect on ACA; and this summer some members of the U.S. Senate have embarked on badmouthing the program to the American people. The opponents of ACA make charges without evidence: death panels (Gov. Palin); the biggest job killer (Sen. Cruz); and with the debt ceiling debate looming, threats about shutting down the government if the President refuses to defund his signature program is being bandied about irresponsibly. It doesn't seem to matter that Mitt Romney ran in the last presidential campaign promising to repeal Obamacare, which was passed by Congress and affirmed as constitutional by the Supreme Court. Anyway, no rational person believes President Obama will ever sign a bill to defund ACA. However, undeterred, some irrational minds are not above wanting to impeach the president, if they don't get their way on ACA. This begs the question: why? What crimes and misdemeanors? Is ACA a crime? A misdemeanor? The Supreme Court ruled ACA constitutional. It is the law of the land.

Granted, ACA is not popular with the American public. A USA Today/Pew poll shows that 42 percent of Americans approve of Obamacare overhaul, but 53 percent disapprove. But not because of its merits. I suspect because of the opponents of the law have managed to keep up a steady negative drumbeat against it. It is true also that there are parts of ACA the public does not like--individual mandate. But they seem to like being able to obtain insurance coverage with pre-existing condition; and to keep a child under one's insurance coverage till age 26. When ACA is finally up and running, the fear among some it is said, is that Americans will like it, and then like Social Security and Medicare, making it extremely difficult for opponents to repeal it.

ACA: Individual Mandate

The individual mandate requires that most Americans buy insurance, and if they don't there is a fine of $750 a years for an individual. Then there is the employer mandate that applies to businesses with more than 50 workers. Such businesses must offer health insurance coverage or pay a fine of up to $750 per employee who gets federal subsidies for coverage. Families with incomes of up to 133 percent of the federal poverty level can get federal Medicaid coverage; families with incomes of up to 400 percent of the federal poverty level are eligible for thousands of dollars in tax subsidies each year, which varies according to family income. Tax credits will be available to businesses that provide health insurance to 25 or fewer workers and pay annual salaries averaging no more than $50,000.   The federal government will also offer "provided government-directed exchanges' to match individuals and small businesses with health insurance policies that meet government requirements.   However, ACA is not cost free. There will be a special tax of 3.8 percent applied to certain income earnings above $200,000 for individuals or $250,000 or married couples. The underlying reason for the push-back is deep in the American psyche that rejects the government telling you how to live your life or even forcing you to do something even when it is good for you. Mayor Bloomberg's failed ban on big sodas is an example of this form of government overreach. Similarly, ACA smacks of socialized medicine. ACA is the brainchild of the Heritage Foundation--so is the An Act Providing Access to Affordable, Quality, Accountable Health Care (2006), also known as Romneycare in Massachusetts, about which the Heritage Foundation has been quiescent.

There are some obvious problems with the program that can be ironed out over time.   And with some abbreviated exceptions, Red States are putting up creative hurdles to stop Obamacare's implementation in their states. One headline in Huffpost Miami says, "Florida Bans Obamacare Navigator from Helping Uninsured at Country Health Departments," presumably out of fear that the navigators will get access to personal information of Floridians that could be used for identity theft. Maybe universal coverage and a single-payer system would be an improvement, too. However, a problem arises when a third party (government or private) pays for insurance (less out of pocket co-pay for the insured), costs decline, and the lower costs raise the demand for health care. But when a third party pays for health care, it becomes more profitable for doctors to use extraordinary means to keep patients alive--they might order procedures for terminally ill patients but that wouldn't make their patients better, except extend their lives a few months. Why? Because the doctors have no incentive to reduce hospital costs, but to increase them when hospitals are reimbursed for medical procedures. Further, the higher the deductibles the more likely a person would want to make fewer visits to the hospital by leading a healthier lifestyle.   If deductibles were zero you would not be less willing to take care of your health (you could also go to the hospital to get medical treatment) because you would not have to pay to see the doctor. This is an unavoidable moral hazard dilemma that might rear its head under Obamacare.

Ours is the only remaining developed economy without some form of universal health care for its citizens. We have opted instead to treat the uninsured in emergency rooms. And then we bill taxpayers for this, and hospitals' bills to insurance companies might even reflect (tacitly) the costs of emergency room medical services for the uninsured. This is of course an inefficient way to pay for health service for the uninsured. It is haphazard. Ours is also the only developed economy where a catastrophic illness can result in a descent into the ranks of the poor where you might languish and then labeled lazy or worse a taker, if you don't work and have to depend on Medicare and Social Security. Though, just a sample of one, I relate a story of the sick college kid who had no insurance and was advised to go to the emergency room. He believed his singles flare up would be treated gratis. It wasn't. The hospital found out he had a part-time job at Walmart and insisted that he pay the hospital in installments out of his measly Walmart pay.   Anecdotally, the case for coverage for all citizens is made by the case of the man who had his hip replacement done in Belgium for about $13,660 (including round trip plane fare, 5 days in hospital, and one-week of rehap; he saved $65,000 by not having his prosthetic hip replaced in the U.S. (See Policymic) What a glaring contrast in costs! And it might be due to ideological obstruction to reform of the health care system in this country. Evidence: the opposition to ACA. However, the solution to our health care problem (including costs and reach) is not, if anyone is tempted to make it, to move to Belgium. That is not collectively doable. Rather, the better--maybe only--solution is to fix the problem here, by addressing the prohibitively exorbitant price of health care. Getting everyone enrolling into ACA will bring costs down and insurance companies have to spend 80 percent of their premiums on health care--if they don't the money must be rebated to policyholders.

Some good features of ACA

There are some glaring positive things about ACA that are difficult to dispute. For instance, the prohibition against insurance companies placing "lifetime limits on the dollar value of benefits for any participant or beneficiary;" according the Subpart II, Sec. 2711.1.(A). Further, Sec. 2712 of the Act states that when an insurance company covers a person has covered it cannot be rescinded except for fraud or misrepresentation. And according to Sec. 2714.a., you can keep your child under your insurance until he or she turns 26 years of age. Qualitative positives of ACA are found in Sec. 2717.a.1.(A), which addresses the notion of preventive care based on "quality reporting, effective case management, care coordination, chronic disease management, and medication and care compliance initiatives,   . . ." ibid, (B) "implement activities to prevent hospital readmissions through a comprehensive program for hospital discharge that includes patient-centered education and counseling, comprehensive discharge planning, and post discharge reinforcement by an appropriate health care professional;" ibid. (C) "Implement activities to improve patient safety and reduce medical errors through the appropriate use of best clinical practices, evidence based medicine, and health information technology under the plan or coverage; and (D) implement wellness and health promotion activities." In summary, the pluses include access of health coverage; a child up to age 26 can stay on their parents' plan; coverage cannot be taken away except for fraud; and the provision of preventive care as part of the plan. These provisions of ACA highlight the humanity aspect of what it is intended to achieve. So, the remarkable lack of promotion behind Obamacare is baffling.

Yet, the anti-Obamacare effort, while not lacking in enthusiasm, is lacking in humanity, originating from the same quarters as the votes to cut $20 billion out of SNAPs (the Food Stamp program). The void in human compassion might have very little to do with mean-spiritedness and much to do with a warped ideology promoted in their minds by an internecine conflict between capitalism and socialism in which socialism (i.e. Obamacare) must be defeated at all costs. The vehemence of the opposition (often loaded with rhetorical venom) still stands out for being devoid of humanity--by which I mean repealing or defunding Obamacare will leave millions of people without insurance coverage. Absent any articulated alternative program to replace Obamacare if it were repealed, we'll be back to the status quo ante--ER for the uninsured. And the repeal fiasco does not seem to provide a learning opportunity for the legislators engaged in it. It is one thing to be against a piece of legislation that truly harms people but it is quite another to fabricate negative attributions to a program that is designed to address the health needs of millions of Americans who do not have access to health care, providing them with health care cannot be cost free. Opponents of Obamacare prefer to advance trumped up charges to discredit it, in lieu of substantive arguments against it.  

Certainly, anyone with an open mind would welcome a conversation about the shortcomings of the program, and be prepared to analyze whether on balance the pluses exceed the minuses. But this is not what is taking place. The detractors of ACA tell us it will destroy this country--it's a train wreck--without explaining how? And worse, they fail to offer an alternative to ACA to "save" the country from it. If these poisoned tipped arrows were only hyperbole, one could excuse them. But you get the feeling some people actually believe the doomsday rhetoric--and might even be willing to hurry the end along through any means: sequestration, shutting down the government, or flaunting with the risk of a credit rating downgrade from loan defaults. However, the opponents in Congress (and some state governors around the country) who are against the implementation of ACA, will have nothing to say about the consequences of depriving millions of Americans of health care.