Healthcare.gov opens November 10th, 2014 to allow people to window shop the health insurance market before open enrollment starts November 15th.
What is Obamacare?
Obamacare, or The Patient Protection and Affordable Care Act, is based on three basic principles:
- Require insurance companies to sell their product to all people, including those with preexisting conditions.
- Require all people to purchase insurance. This prevents people from paying for it on an as needed basis, which could severely impact the health care industry.
- Subsidizes those that cannot afford this insurance (deemed anyone who makes less than 400% of the poverty line with various brackets) with increased rates for those that can.
One of the earlier provisions to go into effect enables young adults to stay on their parents’ health insurance for longer.
Healthcare Triage Explains
The supreme court is its greatest threat
The Supreme Court has agreed to hear King v. Burwell, which calls subsidies for the 36 states that use the federal marketplace illegal on a wording technicality. With 5 Republican and 4 Democratic justices, this could easily pass, requiring the law be revised to fix the error. However, with Republicans in control of both the House and Senate, the prospects are uncertain.
Back in March 2011, when the biggest threats facing Obamacare were the Supreme Court and the 2012 elections, I argued that the demise of the Affordable Care Act would put people’s lives in immediate danger.
Since then, millions of people have gained coverage under the law, and that group of chronic care patients has grown much larger. But despite the fact that the Court upheld the law, and President Obama won reelection, the ACA isn’t out of danger.
If the five conservative Supreme Court justices are so inclined, they can void ACA subsidies for millions of beneficiaries, and cripple the insurance markets in about three dozen states.
Should the five conservatives rule that the text of the law doesn’t provide for federal subsidies in states that didn’t set up their own exchanges, they’ll place the onus on Congress or state governments to address the consequences for constituents who lose their benefits. The contested text could be fixed with a comically simple technical corrections bill, which Democrats would happily support. If Republicans were to sit on their hands, or use the ensuing chaos as leverage to extract unrelated concessions, it will cost people their lives.
The Supreme Court is likely to resolve this case with a 5-4 decision, one way or another. Either a single conservative will side with the Court’s four liberals as in 2012, and leave the law unscathed, or the five conservatives will align to void the subsidies.
People’s lives are absolutely at stake here, but my politics aren’t what’s threatening them.
Let’s assume that the Supreme Court rules in favor of the ACA. Is Congress still a threat, now that it’s controlled by the Republicans? Consider this:
- Obama still has the veto, and Republicans don’t have the 60 seats needed to override that.
- Obamacare has been good for the business of health insurance.
“The five major national health insurers have all seen their stock price at least double — one has almost tripled — since the ACA was enacted, and they’ve all been raising their earnings estimates. Republicans are not going to try to repeal a law that has been such a boon to insurers: They are still a Republican constituency group.”
-Jay Angoff, helped construct the health reform at the Health and Human Services Department.
- Voters support provisions such as government subsidies, pre-existing conditions
- 10 million people already have insurance from the exchange
They are however likely to modify provisions. One likely idea is to allow cheaper plans with less coverage that would currently be illegal. This would still lessen the effect of subsidizing the sick with young and healthy people paying the same amount, and hurt the balance that is Obamacare, but it’s substantially better for the future of the ACA than striking down the individual mandate altogether. Another is changing the full-time worker definition for the employer mandate, an especially controversial part of the bill that has been said to potentially reduce the availability of full time positions.
The GOP would also love to do away with Obamacare’s “risk corridors,” which they’ve very misleadingly dubbed “the insurer bailout.” The provision, which expires in 2016, creates a pool of cash that pays out to insurers in the event that they accidentally sign up too many unhealthy patients on the exchanges. It’s funded by fees on the industry, and it’s necessary because health plans are still figuring out exactly how high to set their premiums in a post-Obamacare world—some might undershoot. Since getting rid of it or any similar protections could drive companies away from the exchanges, it seems likely that Obama would exercise his veto vigorously to protect them.
Especially if the GOP forces a budget showdown with the potential for a government shutdown, it’s easy to imagine Obama giving ground on at least one of these issues, especially the ones that aren’t absolutely crucial to the functioning of the law—expect to see some changes to Obamacare around the edges.
How has Obamacare gone the past year?
- The uninsured rate has sharply declined to 2008 levels
- Hospital outlays for uncompensated care have been cut by 16%
- It has created a 2.1% increase in voluntarily work hour reduction
- The rate of growth in healthcare costs has slowed, and premiums will decrease for silver tier plans next year
It’s not a left-wing policy – Republicans are fighting against their own creation
In an article last month by Bruce Bartlett in the American Conservative, Bartlett backed up his argument that “Obama is a Republican” with various issues, including healthcare.
Contrary to rants that Obama’s 2010 health reform, the Patient Protection and Affordable Care Act (ACA), is the most socialistic legislation in American history, the reality is that it is virtually textbook Republican health policy, with a pedigree from the Heritage Foundation and Massachusetts Gov. Mitt Romney, among others.
It’s important to remember that historically the left-Democratic approach to healthcare reform was always based on a fully government-run system such as Medicare or Medicaid. During debate on health reform in 2009, this approach was called “single payer,” with the government being the single payer. One benefit of this approach is cost control: the government could use its monopsony buying power to force down prices just as Walmart does with its suppliers.
Conservatives wanted to avoid too much government control and were adamantly opposed to single-payer. But they recognized that certain problems required more than a pure free-market solution. One problem in particular is covering people with pre-existing conditions, one of the most popular provisions in ACA. The difficulty is that people may wait until they get sick before buying insurance and then expect full coverage for their conditions. Obviously, this free-rider problem would bankrupt the health-insurance system unless there was a fix.
The conservative solution was the individual mandate—forcing people to buy private health insurance, with subsidies for the poor. This approach was first put forward by Heritage Foundation economist Stuart Butler in a 1989 paper, “A Framework for Reform,” published in a Heritage Foundation book, A National Health System for America.