Sunday, November 3, 2013

Understanding "Obamacare"

A number of talk show hosts, most notably Jimmy Kimmel, have had fun lately asking folks on the street what they think of "Obamacare." Revealingly people know very little about it:

Polls and surveys find the same widespread lack of knowledge about what the Affordable Care act (to give the law it's proper name) actually is, and what change to our health care system the reforms actually make. 

This confusion is, I think, largely the result of the fact that The Affordable Care Act is politically very divisive. Rhetoric from multiple sides of the political spectrum has greatly obscured how the law actually works. We must get past the rhetoric and actually take a careful look at the key elements of the new health care law.

I have taught Health Care Ethics at Marquette University and Harper Community College. A key aspect of this course is a careful consideration of how health care systems and health insurance works in the United States and abroad. Because of this I've been given ample opportunity to study the details of the new health care law (The Most reliable information on what is the law can be found at: Kaiser and the AARP

Here in short are the key elements of the law.

First, two important pieces of information.

1. It is important to note that "Obamacare" is not "socialized medicine." In countries like Canada and England there are no health insurance companies. The government pays the bill. But here in post health reform America, the for-profit private insurance companies that we have all used for decades remain the providers of health insurance for the majority of Americans too young for Medicare, too high income for medicaid, and not receiving Veterans care. 

2. For those Americans who receive health care from their employer the law changes virtually nothing. You will still have the same relationship to your health insurance company that you had before. One important change here, however, is that young people can now stay on their parents plans until they are 26.

Where things have changed is the individual private market. The reasons for the big changes here come from the following provisions of the ACA:

1. Guaranteed issue - insurance companies can no longer deny coverage to anyone who applies. For decades insurance companies have denied people coverage due to pre-existing conditions, Beginning January 1, 2014 they will be legally precluded from doing so any longer.

2. The Individual Mandate - with the exception of those whose incomes are too low, everyone must get insurance or pay a tax penalty (if your income is too low and your State accepts the expansion of medicaid that the ACA offers, then you will qualify for medicaid).  If you receive medicare, medicaid, veterans care or get insurance through your employer you already comply with this requirement. This is, perhaps, the most controversial aspect of the law. Many people seem to feel that legally requiring us to have insurance violates our personal liberty. It is worth noting, however, that the supreme court upheld the mandate as constitutional in 2012. It is also worth noting that the individual mandate was first thought of by the conservative Heritage foundation, embraced by Republican Presidential candidate Bob Dole, and first enacted by by Republican Governor and most recent Republican Presidential candidate Mitt Romney.

3. The Employer Mandate - with some exemptions, all employers with 50 or more employers must either provide an insurance plan to their employees or pay a tax penalty for each employee. Business with fewer than 50 employees are not subject to this requirement. 

Other changes that apply to the private insurance market are that annual and lifetime limits on what insurance companies would pay have been abolished. Women can no longer be charged more than men, and individuals who already suffer from an illness cannot be charged more on that account. 

Those who buy private insurance on the individual market will do so through either federal or state exchanges which must operate according to strict federal regulations. These Federal guidelines require that all insurance plans cover ten essential benefits (ambulatory patient services; emergency services, hospitalization; maternity and newborn care; mental health and substance use; prescription drugs; rehabilitative and habilitative services and devices; laboratory services; preventive and wellness services and chronic disease management; and pediatric services, including oral and vision care).

There are, in addition, 4 types of plans, platinum, gold, silver, and bronze. These plans cover 90, 80, 70, 60 percent of costs respectively. The more costs the plan covers, the higher the premium is. Most Americans qualify for a subsidy which will pay for part of their premiums, thus lowering what they will pay.

Unfortunately the launch of the federal insurance exchange (States who have set up their own exchanges - not all States have - have been more fortunate) has been something of a problem. The web sight is not working properly and most consumers cannot access it. It remains to be seen if this technical problem will result in delaying certain aspects of the law, such as the individual mandate. 

The Benefits of the Affordable Health Care law are clear. For many years millions of Americans were denied access to health care because of pre-existing conditions or high costs. Many of these people will finally be able to buy health care that they can afford.

But there are disadvantages as well. Some Americans will see their premiums and/or deductibles rise. Furthermore, because the new law requires all health insurance plans to cover the ten essential benefits mentioned above, some current plans will be eliminated starting next year. These plans will be replaced by plans that cover more, and for most consumers cost less (thanks to subsidies) but to some 3-5% of Americans costs will rise up. There are those who believe that they should be allowed to pay less for their current plans which cover far less. They are not pleased with this situation. For more on this particular controversy see the very helpful piece in the New Yorker.

Most importantly the Affordable Health care Act has, hanging over it, one big question mark. The United States has by far and away the most expensive health care system in the world. It is debatable that the ACA does nearly enough to reduce these huge costs. If we really want to reduce our expensive system, further changes may very well be needed in the future. 

For a further quick, comprehensible  and comprehensive overview of the Affordable Health Care act in all it's particulars I recommend the following, rather humorous, 9 minute video from Kaiser:

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