Health Care Reform. What is it? Why do we need it? Do we actually need health care reform in the United States?
The Patient Protection and Affordable Care Act, also known as Obamacare, was signed into law by President Obama in 2010. Now, the current administration is looking to repeal it.
There are pros and cons to health care reform; just as Obamacare has its benefits and its downsides, health care reform will impact the American population and our economy. So how, exactly, did the Affordable Care Act change the economy, and why are so many looking to do away with it?
The Patient Protection and Affordable Care Act
For a great many years, the United States government has struggled to devise a way to make Universal Healthcare an option for Americans. As one of only a handful of developed countries not covered under such a universal plan, lawmakers have spent many days in debate over how to make insurance accessible to everyone.
Health insurance products, prior to the ACA, had been at the discretion of the states. In Massachusetts, for example, MassHealth existed to ensure that all individuals were covered by health insurance. Those who qualified under specific income guidelines were granted the opportunity to take advantage of public health insurance. Those making above that income level could purchase private insurance, or be subject to a tax penalty.
Obamacare worked in much the same way. Private insurances were consolidated and purchased through the Marketplace. Those who chose not to purchase insurance, and who could not qualify for public assistance, were fined a penalty on their federal taxes.
So what was the result? Simply put, the result was a lot of uninsured people. The premiums of Obamacare, in its beginning stages, were just unattainable for many families who didn’t qualify for public aid. Medicaid was expanded in several states, but in others it was capped and made inaccessible. In short, people opted to pay high emergency care and as-needed health care costs in lieu of paying the high deductibles and premiums offered by the ACA.
Health Care Reform
The Affordable Care Act did have its benefits to the American economy. First, it caused an increase in consumer spending. Raised prescription drug costs and higher insurance spending contributed to this. Second, there was a decrease in state-level spending on healthcare. This, in turn, freed up money to be used against the national deficit. The Congressional Budget Office projected that, if left in place, the ACA would reduce the Federal deficit $16 trillion over ten years.
However, it can’t be left unsaid that Obamacare did leave many Americans uninsured. The current administration has referred to Obamacare as a “disaster;” while that may or not be so, there are certainly areas which could use improvement.
There have been at least five revisions to the proposed repeal, and the most significant point of note is this: under the new proposed plan, the administration would cut back considerably on Federal funding to Medicaid and Medicare recipients. This would leave approximately 19 million adults uninsured.
This spending cut, however, would free up state money to be utilized elsewhere. It would also theoretically increase consumer spending. That is, if those uninsured choose to pay the costs of emergency healthcare and prescription medication. There’s always the risk that those individuals may not seek medical attention at all.
Obamacare certainly has provided benefits to the economy. And the proposed changes have, thus far, fallen short. So what’s wrong with Obamacare, and how can lawmakers truly fix what’s currently in place?
The Trouble with Obamacare
The first problem with the Affordable Care Act is that the plans were expensive. While the costs of those plans were designed to decrease over the years, that fact did little to assist people who were forced to purchase insurance plans from the Marketplace. The choice was simple: pay a high premium, or pay a hefty fine.
The fines themselves were confusing. Depending upon family size, income, and other factors, each America was assessed a fine. Or a percentage of AGI. Or an amount that he or she was responsible to pay. The list goes on, and, like much of the US tax code, it may take an attorney to figure out.
Signing up for Obamacare was meant to be easy, but in fact was quite complex. New insurance agents were hired to assist, but often they were unfamiliar with the rules of the ACA. At the launch of the Marketplace, the website did not work at all. Confusion about plans and how to sign up caused many Americans to miss the deadlines.
For those who could afford the Marketplace plans, Obamacare was a great program. However, most of those individuals were already enrolled in company insurance plan, and the ACA just muddied the insurance process. Plans were cancelled and individuals were forced to re-enroll in different, sometimes inferior coverage.
The Affordable Care Act initially existed to provide all Americans with health insurance. And in fact, that likely would have been the result if left in place. But there were too many short-term problems with the program which were insurmountable to many Americans. This leaves the current administration under a lot of pressure.
What’s Next for Health Care Reform?
Recently, President Donald Trump’s newest plan to replace Obamacare was voted against, and legislators are left, once again, at ground zero. Democrats and Republicans are in stark opposition, as Democrats want to leave Obamacare in place while the Republican Party seeks to repeal the law.
The problem for many is that a repeal of the law would be just that. A repeal, with no new plan in place as of yet. Opponents of the repeal see this as dangerous: Obamacare was initiated without enough planning, shouldn’t a new plan be fully developed and ready to replace the ACA?
Regardless of any lawmaker or American’s stance on Obamacare and the proposed health care reform, it’s clear that there are benefits to Obamacare and that there would be certain benefits to refining the law.
Done right, a universal healthcare plan such as the ones proposed by both parties would help to decrease the national deficit. Money would be freed up at the state level to be added to other programs. Consumer spending would increase as more Americans bought insurance and paid for health care. Unfortunately, it’s up to lawmakers to achieve all of these goals while still keeping health care accessible to all Americans. It’s not an easy task; hopefully the Trump administration can work together to find a solution.
