The Affordable Care Act, also known as Obamacare, has a pretty bad reputation among ordinary people (though many people don’t even know that both refer to the same law), mostly due to misinformation and right-wing propaganda. Polls have found that a majority of people oppose Obamacare, even though the same majority supports individual provisions of the law. Its detractors have labeled it “socialist”, while its supporters praise it by proving that it’s “not socialist.” In fact, because Obamacare is “not socialist,” it represents virtually no change from the existing, inefficient free-market system of health care we already suffer from.
Here are some major problems with our current health care system that the ACA fails to address:
That health insurance companies have been systematically cheating consumers has been well-documented. Health insurance companies, like any other profit-maximizing corporations, try to advertise their coverage to be more complete than it actually is. In some other industry, that might just mean you end up buying more than you should; in health care, it means that because of some tiny loophole, elderly people who’ve been paying their premiums aren’t able to get coverage when they need it the most. Since insurance companies are incentivized not to cover you adequately, even when they do give you money, chances are they’re paying less than they should be. Obamacare does nothing to hold insurance companies accountable for this kind of fraud.
Fully 99% of metropolitan markets are “highly concentrated,” i.e. few sellers control a large market share and thus dictate the prices. Before the ACA, mergers were making the market less competitive. After the ACA, small insurers who can’t compete in the market will go out of business, retaining this oligopoly. Even large companies, like Aetna, are pulling out of health insurance exchanges, further limiting consumers’ access to insurance. In other words, large insurance companies are still in control of the market.
Access to Care
Last year, 80 million people didn’t go to the doctor because it was too expensive, and getting health insurance could be a start. But the ACA gives employers incentives not to insure their employees. If a company with more than 50 full-time employees doesn’t insure its workers, it faces a fine of just $2,000 per worker, when the cost of insuring each worker comes out to about $12,000. Even if under the ACA, you get health insurance, the question should be, will you get care? Insurers are responding to the ACA by limiting the doctors and hospitals available to patients, which means you probably can’t retain your longtime doctor, and when you want to go see your new doctor, you have to wait in long lines. In essence, you’re paying health insurance companies for what will remain very spotty coverage.
This is perhaps the most crucial part of health care the ACA does little to reform. Dr. Don McCanne points out that “patients will have to pay 30 to 40 percent of their health care costs out-of-pocket,” so “even for those individuals who qualify for government subsidies, the financial exposure will still be too great for too many.” People who live paycheck to paycheck can neither afford to buy insurance nor afford to pay the ACA penalty if they don’t. Obamacare has attempted to expand Medicaid for these low-income individuals, but 27 states with Republican governors have refused to increase access to Medicaid, leaving millions of poor people uninsured or broke. A whopping 31 million people (down from 48 million, but still painfully high) will remain uninsured in this atrocious system because of affordability issues.
Administrative Costs and Waste
In America, we spend about $8,000 per capita on health care, and what’s the result? We have some of the worst health outcomes, measured by indicators everywhere from disease prevalence to infant mortality to life expectancy, which BusinessWeek attributes to insurance companies and their administrative costs. The New England Journal of Medicine points out that administrative costs (money that doesn’t actually go into providing care, but instead, advertising and screening) in the US total $361 billion, 17% of overall health care costs ($2.1 trillion). By contrast, Medicare spends just 1.4% on those costs. To curb this, the ACA limits insurance companies to spending only 20% of their income on such costs, a mark that most insurers already meet. Simply put, the ACA doesn’t meaningfully regulate one of the biggest sources of inefficiency in our health care system.
The failure of the ACA to seriously improve any of these 5 issues suggests a deeper problem and poses a few interesting questions.
What does the law end up doing? Why?
Let’s follow where the money ends up going under the ACA. The ACA relies on young, healthy people who wouldn’t otherwise buy insurance to do so, so that they can balance out the risk of the sick individuals who will now get insurance. You pay insurance companies if you have the money (or if you don’t qualify for either ACA subsidies or Medicaid), and if you don’t, the government subsidizes your purchase (and it may still be expensive for you). In both cases, the money ends up with insurance companies. That the Blue Cross Blue Shield Association (federation of health insurance companies), the 3rd largest spender on lobbying, lobbied fervently for the ACA and donated large sums of money for Obama’s campaign should hardly come across as a coincidence.
Is there a better alternative?
As ineffective as the ACA may be, I wouldn’t suggest repealing it, defunding it, or delaying it. Instead we can replace it with a single-payer, national health insurance system – “Medicare For All.” Almost all other developed nations provide universal coverage, at a fraction of our current costs. Almost 60% of the American public would support such a program, and some government officials, like Senator Bernie Sanders – VT (I), have come out in favor of it, yet mainstream commentators label it “politically impossible.” But this is a sorry excuse for the incompetency of our government, which 80% of Americans (rightly) believe “is run by a few big interests.”
What was impossible yesterday can be made possible tomorrow, but it’s important we have a vision of where to go from here. In the American Manifesto, I will outline the details of “Medicare-For-All,” and how it would perform on our 5 criteria.