Breaking Down Obamacare, Or: Everything You Wanted to Know About the ACA but the Inept News Media was too Incompetent to Tell You

As per usual, partisan differences leave citizens caught in the middle.

Last week, the House passed a bill to repeal Obamacare. The Congressional Budget Office was unable to evaluate the bill so it is unclear how many people will be negatively impacted if the bill in its current form passes the Senate and is signed into law.

Source:
https://en.wikipedia.org/wiki/Patient_Protection_and_Affordable_Care_Act#

While Obamacare has problems. repealing it, absent any comparable replacement, would be a disaster. This is because Obamacare remedies some major flaws in the health care system. And although our health care crisis did not cause the economic collapse of 2008, it has been a major factor in recovering from what was the deepest recession since the Great Depression. Continue reading for the full breakdown...

I. Funding

Tax Increase On the Wealthy

In my opinion, the biggest flaw of Obamacare is that the subsidies that allow poor and middle class Americans to afford health insurance is partly funded by taxes paid by wealthy people (through taxes on Cadillac health care plans, which is currently delayed, and other taxes as well as cost savings). This means that the law will always be a target for repeal because wealthy people, like the rest of us, generally want their taxes to be as low as possible. [A brief history: the wealthy people of today succeeded in part due to the opportunities afforded our generations by the generations of wealthy
people before us. We all for the most part succeeded because of their generosity, vision and patriotism. We were able to build a country that had the best school system in the world. We had the best infrastructure in the world. Healthcare, manufacturing, agriculture; we were Number One at just about everything. But the wealthy people of today don't want to pay the kinds of taxes that can sustain what we once had and what we once were. Their taxes have been radically reduced over the past few decades, leaving the middle class with the burden of making up the gap while losing services due to lack of funding.]

The political influence of today's wealthy people in our politics is so substantial that Republican politicians have spent over $50 million of our tax dollars holding votes on bills to repeal the ACA. The repeal bills never had any hope of being signed into law, so you and I and everyone we know paid $50 million for Republican politicians to declare to their wealthy campaign donors that they were strongly against Obamacare. It was simply a way of ensuring that they would be showered with campaign cash in upcoming elections. When it comes to health care, Republicans have refused to lead, follow or even get out of the way.

II. Performance

State-by-State Variances
Obamacare's performance differed widely by state. States like Kentucky and California that embraced the law, expanded Medicare and set up state-wide insurance exchanges saw a large decrease in the rates of uninsured citizens and a reduction in the rate of rise of insurance premiums. Other states have experienced less success. Nationwide, Obamacare helped to slow the rate of increase to insurance premiums. People who got their health insurance from their employers, rather than through Obamacare, seemed to enjoy a slight reduction in actual health care costs.

Source: http://www.consumerreports.org/personal-bankruptcy/
how-the-aca-drove-down-personal-bankruptcy/

Personal Bankruptcies
One of Obamacare's largest positive impacts was effectuating an astonishing 50 percent decrease in personal bankruptcies. While Obamacare is not likely to be the only reason for the reduction in bankruptcies, experts believe that it is likely to have been the largest driver of that trend. When people got access to affordable health care, they were able to get needed medical treatment and pay their other essential bills. Unfortunately, I don't know how to evaluate the broader economic impact of preventing nearly 800,000 bankruptcies in the country but it would almost certainly mean a reduction in dependency on government services like food stamps and welfare. It would also mean avoiding a negative impact on productivity and our GDP. It certainly seems like fewer bankruptcies would mean a stronger economy overall.

III. Republican Attacks

Repeal Votes
While Republicans have attempted to say that Obamacare is collapsing under its own weight, the truth is that they have made every imaginable attempt to undermine the law. Had Republicans not wasted $50 million voting on bills that aimed to repeal it, that money could have been used to help solve deficiencies with the law or to fund more subsidies for those who cannot afford their insurance premiums.

Advising to Pay Penalties
When the law first passed, Republican politicians and pundits recommended that their constituents and followers pay the fine and get nothing rather than buy insurance through the ACA and actually have health insurance. This was not because they thought it would be the better choice for the individual. It instead was another tactic to undermine the law. They knew that the more people that signed up, the more likely it would succeed. There is something very disgusting about wealthy people who have great health care trying to achieve their political ends by telling people to forego health care coverage.

De-funded Risk Corridors

The fatal blow to Obamacare may have been delivered by Rep. Jack Kingston (R-Ga.), when he snuck an amendment into an unrelated bill that de-funded the risk corridors. There is some debate about this issue so I will break it down as I understand it: the risk corridors were set up to make sure that insurance companies didn't lose money by offering coverage to poor and sick people. In the past, those people simply would not be able to secure insurance coverage for themselves so the risk corridors were a way of bringing insurance companies into the program and to allow the poorest and sickest among us to finally get health care.

Democrats said that the risk corridors were going to be self-funded. Meaning that if Highmark made $5 million of net profit in the exchange selling policies to people in California and Humana lost $1 million selling policies to people in New Jersey, Highmark would share some of their profits with Humana so that Humana would not lose money by participating in the exchange. The amendment required that the risk corridors be self-funded, as the Democrats said they would be. This means that the government could not step in with money from other programs to pay the insurance companies if there was not enough money in the risk corridors to compensate all of the losses. In the first few years of the law's existence, it is extremely difficult for insurance companies to know how much to charge customers for premiums because there was no way of knowing how many sick people and how many healthier people would be signing up. Requiring that the risk corridors be self-funded meant that if the insurance companies were incorrect about their cost estimates, they would lose money in the exchange and they may not get compensated. [FYI: all of these insurance companies are incredibly profitable overall, but the challenge of figuring out how to make a profit by offering insurance to poor people is obviously difficult.]

Ramming it Down
Republicans said that Democrats had rammed the ACA down American's throats. This was a way of reinforcing a negative opinion of the law with citizens but it was never really true. Democrats held over 30 bipartisan hearings and allowed dozens of amendments to the law, in a process that took fourteen months. In the end, it passed with no Republican votes but the Republicans' fingerprints were all over it. Democrats started with the compromise position of using two conservative principles as the foundation of the law: the individual mandate and the private insurance exchange. Republicans railed against the individual mandate, even though it was their own invention. [Once, while reading Vultures Picnic by Greg Palast, I encountered a passage that said that the Koch brothers came up with cap-and-trade as a way of using free market constructs to get corporations to pay for the environmental damage that their businesses cause. I had to set the book down to contemplate why the Kochs would propose this solution, then fight it so vociferously years later. It suddenly occurred to me that it was a stall tactic. A successful one. Democrats worked to figure out ways to implement this system and how to make it work and when they are finally ready to pass legislation, the conservatives reverse their position, proclaiming that such a law would be un-American and would destroy the economy. Republicans have successfully stalled any further regulation of pollution for more than fifteen years. The same stall tactic seems to have been used to oppose the ACA.]

IV. Democratic Failures and Incompetence

Bad Optics

Who was health care reform intended to help?

Many of Obamacare's problems are undoubtedly the result of corruption and incompetence of Democrats and of Obama. The health insurance companies, pharmaceutical companies and hospital associations were invited to have input on the drafting of the bill which smacked of corruption and therefore tainted people's opinion of the law.

Poor Messaging
Democrats did a poor job of selling Obamacare to the nation. They allowed Republicans to get out in front of them and brand the legislation and set the framing for it. Republicans called it a government takeover of health care which isn't really true. They system never departed from the concept of citizens paying private insurance companies to manage health care provided by private health care providers. Government involvement only comes into play when a person cannot afford to pay their private health insurance premiums. The government gives subsidies in such cases. While some people embraced Obamacare, many opposed it, either because they didn't want government involvement in health care or because they felt that the law should have done more to provide health care to people and to cover more people.

The Invisible Three-Pronged Approach

In the book Confidence Men, Ron Suskind wrote that Obamacare was a way of tackling three major problems with a single action. We would put some of the eight million people that had lost their jobs in the economic collapse back to work in the health care delivery industry and create new demand therein by providing access to health care for many of the 50 million people who were without it. At the same time we could reform the health care system so that it was more efficient, more accountable to patients and would not leave people without access to needed services. It was a way of killing three birds with a single stone but Democrats are too incompetent to convey that message. Instead, they were always on the defense as they tried to shoot down ludicrous notions such as the law having "death panels". The soundness of the three-pronged strategy may have been convincing for many voters but they were unlikely to know anything about it if they didn't read Suskind's book. In the hundreds of articles about Obamacare that I've read over the years and in the many interviews with politicians I've seen, only in Confidence Men did I learn anything about this three-pronged approach.

Source:
https://en.wikipedia.org/wiki/Patient_Protection_and_Affordable_Care_Act#

Job Creation
So how well did the job creation aspect of Obamacare work? In an analysis, it was determined that more than one million of the new jobs created after passing of the law were in the health care industry. And Obamacare created compliance and advisory jobs in other industries as well. It would have been very difficult to reduce the unemployment rate by 5.6 points without some very large initiative such as health care reform. I certainly never heard any other plan from a politician that could have come close to being the jobs engine that Obamacare became. (The one other plan was Obama's Green Energy initiative but that was stalled in Congress. Trump's infrastructure plan may also result in a substantial employment increase but there has been little action on it and few details about the plan.)

Disastrous Rollout
The rollout of Obamacare was a disaster due to the web site for patients to sign up constantly crashing and being unable to handle the traffic. Many people tried for hours and could not complete their registrations. This was an unexpected and embarrassing failure because Obama got elected in large part to his campaign's embrace of technology and use of social media. Technology was skillfully wielded to get an advantage during the campaign but when it came to actually doing the people's business, the administration seemed incompetent.

Keeping Your Doctor and Insurance Plan

As we watched the debate over health care unfold, Obama did something unexpected and befuddling. With constituents across the country angry over the health care bill and misinformed by Republican lies about death panels and that undocumented residents would be able to access benefits from the program, Obama emerged to reassure everyone that if they liked their health care plan, they could keep it. And if they liked their doctor, they could keep their doctor. The statement was a bit like promising someone that you will never die. A grandfather clause in the law stipulates that people can keep their health care plan if they want to (even if it doesn't comply with the basic requirements of coverage in Obamacare). But there is nothing in the law that requires an insurance company to continue to offer a plan that a customer wants to keep. Nor is there anything in the law that prevents doctors from leaving an insurance network, retiring or dying.

My guess is that Obama wanted to convey the true fact that there is nothing in Obamacare that takes away anybody's insurance plan or prevents them from seeing the doctor they like. I also believe that Obama was intentionally misleading with his statements and that he understood that people would believe that they could not lose their doctor or insurance plan under any circumstances. I think that Obama sunk to this low and ill-advised position because he was exasperated by all of the lies that were being told by Republican politicians and conservative pundits about the law.

Obamacare gave small business employers the ability to get out of the practice of providing health care for their employees. Many small businesses relieved themselves of the burden but the change up in payers meant that many of these people would lose the coverage they had and would be forced into another plan. Their preferred doctor may not be in the network of the new insurance company so many lost access to their preferred doctor as well.

The Individual Mandate
The individual mandate is undoubtedly the most despised part of the Affordable Care Act. It requires that all citizens have health care coverage or pay a penalty. The penalties started at just $90 but increased over time. It is a slap in the face to every person who cannot afford health care coverage. Thousands of people ended up having to pay fines of a few hundred dollars simply because there were no affordable health care insurance options available for them. Especially in states where the Affordable Care Act was not supported by politicians, few insurance providers bought in to the program and therefore there were few options and little competition for health care plans.

V. My Personal Experiences

Doctors and Insurance Companies Denying Coverage
I supported Obamacare because when I was 22 years old, I was denied an MRI exam by my HMO doctors because they knew that they could get bonuses and other financial incentives to deny me care and save the insurance company money. This is an absurd situation that no American should be subjected to but there were millions of us that were. Many of them died from their inability to get the health care benefits covered by the insurance plans that they paid for.

If Republicans had come up with legislation that prevented this from happening to more people, I would have supported that legislation. But Republicans did not care about the millions of patients harmed by the practice. Insurance companies are the constituents of the Republican Party and they weren't complaining about the situation so Republicans had no interest in addressing the problem.

When Republicans had the opportunity to "repeal and replace" Obamacare--as they campaigned on doing in the 2016 election--they had nothing with which to replace Obamacare. After seven years of attacking and trying to destroy the law, they had not taken a single step to draft legislation to address any of the serious health care failures that Obamacare corrects.

~R. Charan Pagan
information systems technologist, musician, writer, filmmaker
Los Angeles, CA 90017
http://www.reclaimingourbirthright.blogspot.com/