Patient Protection and Affordable Care Act

From the January-February 2014 issue of News & Letters:

Patient Protection and Affordable Care Act

The Patient Protection and Affordable Care Act, or “Obamacare,” does respond to a serious problem. Over 47 million non-elderly Americans were uninsured in 2012, according to the Henry J. Kaiser Family Foundation. The Centers for Disease Control says that 46.3% of uninsured adults went to hospital emergency rooms for treatment because they had nowhere else to go.

The number of bankruptcies that result from unpaid medical and hospital bills, especially for emergency room visits, is elusive, but there is no doubt that hospitals have large amounts of uncollectible debts and that hospital costs paid by insurance, Medicare and Medicaid reflect a great deal of “bad debt.” The American Hospital Association claims that in 2001 “uncompensated care cost,” which includes bad debt as well as “charity care,” was 5.9% of total expenses.

Health insurance companies are getting a large subsidy from the government in the form of subsidized premium payments. The Kaiser Foundation subsidy calculator shows that a family of two adults and two children with an annual income of $50,000 would receive a subsidy of $4,925 for estimated premiums of $8,290 for one year. The subsidy is in the form of a refundable tax credit, which means that the taxpayer gets a refund of $4,925 even if his or her actual income taxes are less than that amount.

The opposition to Obamacare by Republicans is unprincipled and hypocritical. In 1989 the Heritage Foundation, a Right-wing think tank, pushed a plan that was very similar to Obamacare as a great idea. Republican members of Congress introduced similar legislation in 1993. Clearly, Republican opposition is part of a strategy to deny any accomplishment to President Obama.

Be that as it may, the issues with the website and cancellation of subpar policies are part of many things about Obamacare that are objectionable and needlessly complex. The system assumes that enough young, healthy people will enroll to lower premiums. There is otherwise no effective means of cost or premium control. By far the biggest plus is that health insurance plans cannot refuse coverage or charge more because of pre-existing conditions. Also, there are minimum standards set for health insurance policies.

President Obama assumed that he would have 100 days or so in his first term to get some kind of health reform legislation passed. He was not going to push for anything, such as a single payer system, that could not pass in a short “honeymoon” period. A single payer system would be far superior to Obamacare and avoid most of the complexity and unpopularity of Obamacare.

—Dan B.

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