Since the turn of the 20th century there have been people calling for healthcare reform in the United States. Why did it take over a hundred years? In the United States, the major players would rather keep things the same than make a drastic change. Obama knew that many before him had failed miserably. So Obamacare builds on our current, privatized, for-profit health care system (that’s right, Obamacare is actually the opposite of socialized medicine). Our system has a lot of groups with a lot of benefits and most do not want to sacrifice them for universal care. To reform healthcare, you have to make changes, but not too many or else you won’t keep enough people happy.
First, there’s people themselves. Most want to be able to choose their own doctor, insurance plan and hospital at an affordable cost. For the majority of Americans who already receive health insurance through their employers, they won’t see much of a change, though some will receive subsidies for premiums. People who don’t receive health insurance from their employer will have to buy it, which makes a lot of people unhappy. Even Obama opposed an individual mandate as a candidate in 2007. But there are a lot of exemptions from the mandate, including if the tax takes up too much of your income. The main reason for the mandate, though, is so that insurance companies won’t refuse coverage. In 2010, people with pre-existing illnesses were no longer denied coverage (ed: the full ban on denying covering to those with pre-existing conditions comes into effect in 2014; In 2010, individuals with pre-existing conditions became eligible to join temporary high-risk pools that will be superseded by healthcare exchanges in 2014). In 2014 insurers must give lifetime coverage and minimum benefits will be standardized. Out-of-pocket expenses will be limited as well. But insurance companies are made up of people too and they are a major player in our health system. Now they will also be getting millions more in business since everyone will be required to buy health insurance.
Businesses will be a majority of the new clients for insurance companies since in 2014 they will be required to provide coverage for their employees. To pass this part of the law, many exceptions were made for small businesses. Employers with 50 or fewer employees or with a payroll under $500,000 will be excluded (about 86% of small firms). Small businesses that do offer health insurance have already started to receive tax credits for doing so. As for large employers, they will be taxed for not providing a basic health plan that is affordable (up to $2,000 tax per employee). Most businesses aren’t thrilled to add a new cost but most businesses already offer health insurance.
Other groups Obama had to keep happy were doctors, hospitals and the pharmaceutical industry, who all support universal coverage only if it doesn’t decrease their incomes. So Obama emphasized the fact that more people insured means more money. Hospitals were pleased since they cannot deny uninsured people in the ER, which creates losses that hospitals have to write-off. More insured people make up for those losses so hospitals agreed to give back $1.5 billion to the government through adjusted Medicare caps over the next 10 years.
Big pharma also had to deal with changes in Medicare. In 2014 they will have to provide drugs for Medicare patients, but Obama agreed to not fix prices and to not let people buy drugs from other countries. Doctors wanted a change in Medicare too, but had to compromise. Since 2000, Medicare fees paid to doctors have decreased every year and the American Medical Association wanted this repealed. This would cost an extra $200 billion to health reform. Instead, in exchange for the AMA’s support for decreasing doctors’ fees from Medicare, primary care doctors and general surgeons will receive a fee increase, and there will be no more cosmetic surgery taxes.
The last and most difficult group to please is the political parties. Most liberals support a single-payer plan where there is one payer for healthcare – the government. Most conservatives oppose any kind of government regulation. Yet most opposition to healthcare reform is based on rumors and exaggeration. Yes, taxes will increase, but only for the 2.6% of households that earn over $250,000 and it will go towards Medicare. Yes, the government will cut Medicare spending. But it has come from agreements with hospitals and a lot of the spending cuts will be to Medicare Advantage plans, which are more expensive and comprehensive. No, this law did not have bipartisan support, but it has a lot of support from medical groups and it is eerily similar to the Republican health reform proposals of Richard Nixon, John Chaffe and Robert Dole, and of course, Mitt Romney.
Essentially this law redistributes a lot of money to expand coverage, and researches better care practices. In the meantime, there is a lot of work to be done to really make a difference in our healthcare. Fire insurance works well because few people lose their homes to fires and it’s usually a one-time incident. But we have a lot of people getting sick and for long periods of time. So to improve health insurance we need to prevent more people from getting sick. We can do this through low-cost initiatives such as better health education and with better case management to connect people to services. Obama did a lot of work to keep our current health system the same but more cost-effective and efficient. Now to see a real shift in our health care system we need to start getting people healthy in the first place.
