Obamacare is a Mess, but Not a Failure

It became clear last week, that one of the primary goals of the GOP in 2017 will be repealing and replacing Obamacare. It will not be an easy, or quick process, as there are numerous steps and hurdles that must be cleared aside from the potentially devastating political consequences.  The first part, passing a budget resolution, will be a breeze compared to what lays ahead.

20 million more Americans have insurance under the law, so simply cutting the plan and reverting back to the old system is not a viable option.  The GOP leadership knows this.  It’s why they changed their burn it to the ground argument, to the decidedly more moderate “repeal and replace.”   However, as NBC News noted, the staunchly conservative House Freedom Caucus (40 members)  is not on board with a slow, temperate approach.  They want the entire law, and all of the associated taxes resigned to the ash heap of history.  This is where things get tricky, as the pre-existing condition provision as well as the under 26 provision, are very popular.  According to data collected by the Kaiser Family Foundation, 86% of Americans overall (and 82% of republicans) approved of the provision that allows young adults to be covered under their parent’s insurance plan until they turn 26.  And 69% of Americans (63% of republicans) polled approved of the pre-existed condition provision.  Getting rid of these two aspects of the law could end up being political suicide, and if they aim to keep them,  there is no way they can cut all of the associated taxes.   Moreover, pulling out of the ACA would result in a mass exodus of insurance companies from the public marketplaces which would send premiums through the roof and drastically limit choice.  This are many PR bullets to dodge.  Pulling this off, it’s going to take a serious amount of artful bending and salesmanship.

If the republicans really want to fix healthcare in this country they will not repeal the law.  Obamacare has serious issues; it’s a mess.  It’s a wildly complicated, hodgepodge of a bill.  It should’ve been a single-payer system or at least have included a public option of some sort, but because of certain politicians, namely insurance shill Joe Lieberman, the bill became Frankensteinian. The resulting law underestimated the number of healthy Americans who would sign up for the exchange, it gave far too much power to insurance companies and it prompted insurance rates to rise dramatically for a number of middle-class families.  It’s rife with miscalculations and assumptions that didn’t quite pan out.  And still, it should stay.

The reality is this: our health insurance system as a whole was quite horrific for decades and decades before Barack Obama was elected President of the Harvard Law Review, let alone of the United States.  80% of Americans wanted an overhaul of the system.  50 million people were uninsured compared to 28 million now— many of them due to prior illnesses. It’s also worth noting that the number of uninsured Americans would be far lower if 19 states didn’t refuse to enact the Medicaid expansion attached to the legislation.  Mental health services for the poor and lower-middle class and access to women’s healthcare were nowhere near where they are today.  And, even though rates have increased significantly, there is an argument to be made that rates would be in a similar place, or even higher,  if Obamacare never happened.

One approach to fixing Obamacare, which was previously noted in the New Yorker, involves bolstering the program through subsidies.  The government would use subsidies to lower premium costs and to entice insurance companies to re-enter exchange marketplaces.  Its goal would be to function as a jump start to lower premiums and increase competition.  An expansion of Medicare and an early buy-in option could also help stabilize the system.  The problem with Obamacare is not that it went too far, it’s that it didn’t go far enough.  It was supposed to lay the groundwork for future expansion.  The bill was macheted by required concessions that have hampered its effectiveness to a serious degree.  Of course, these above approaches do nothing to simplify our remarkably complicated, and fractured network, but they could still go a long way in decreasing rates.

The best course of action and the one that is supported by a large percentage of Americans is a switch to a single-payer system, also known as “Medicare for all.”   Under this system, everyone’s health insurance is issued through the government.  Many people, when they hear this, think single payer is socialized medicine, it is not.  It is socialized health insurance.  Doctors and hospitals still function as entirely private entities.  Medicare is this system, we would just expand it to Americans of all ages.  This would increase taxes, but the premiums and deductibles would be so low that it would offset tax increases and actually save people money.  Furthermore, this system curbs bureaucratic waste and cuts administrative fees by a massive margin, saving and U.S. an estimated $150 billion per year.   A study by BMC Health Services Research found that administrative health insurance work cost the U.S. $471 billion in 2012, and 80% of that was waste.

There seems to be this misguided notion by some that the U.S. already spends too much public capital on healthcare for its citizens, but that’s not really the case.  The reality is, U.S. public funds account for just 48% of overall healthcare spending.  Of the 35 countries in the Organisation for Economic Co-operation and Development (OECD) that’s about as low as it gets– the average of 72%.  However, between private and public funds, we do spend more than any other country on healthcare.  We spend more and cover less.  Some of this is due to the aforementioned waste, as well as the staggering amount of money we spend on pharmaceuticals compared to the rest of the world.

Now, with the republicans in charge of the house, senate and white house the chance of single payer happening is nil. But we still have to mention it.  Many of the issues with our healthcare system derive from the fact that there essentially is no system; it’s still very much the Wild West.  Obamacare took things in the right direction; it attempted to defragment healthcare, but there is no denying the law has issues that need to be addressed.  The above solutions involving increased subsidies and Medicare expansion are really just band-aids, but that doesn’t mean they can’t be effective. They are moves that aim to preserve the portions of the law that Americans are on board with while addressing the ballooning premiums.

To entirely repeal a program that brought our uninsured rate to an all-time low, and made it so people with preexisting conditions were no longer brutally ignored, and expanded women’s and children’s health care, and mental health coverage, is not the right move.  We should not haphazardly toss this law to the curb in the name of partisanship, we should fix it.

 

by Jesse Mechanic

Jesse Mechanic is the editor in chief of The Overgrown.

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