street roots
Oct. 12, 2012
Health care reform
without tears, part 2:
Will Obamacare save
America from itself?
BY SAM UEL METZ
C O N T R IB U T IN G C O L U M N IS T
Samuel Metz is a
Portland
anesthesiologist active
in health care reform.
He is also a member
o f two organizations
advocating publicly
funded universal
health care: M ad As
Hell Doctors and
Physicians for a
National Health
Plan. He is the local
chapter representative
to Health Care for A ll
Oregon, an umbrella
organization o f over
50 groups working
for better health care
in Oregon. He can be
reached at 3Q9A@
samuelmetz.com.
TT ust when despair engulfed our
I dysfunctional health care system,
I Congress passed the Affordable Care
A ofalso known, inappropriately as we will
see, as “ObamaCare”). Is the Affordable
Care Act a knight in shining armor, a red
herring or the end of civilization as we know
it?
Let’s look closer.
The Affordable Care Act (ACA) was a
response to powerful health-care forces
pulling in many directions — from families
bankrupted by medical bills, businesses
crippled by employer-sponsored insurance,
hospitals and physicians paid less for
Medicaid and Medicare patients than the
cost to provide the care, insurance
companies protecting their industry, and
voters demanding that something —
anything — be done to solve an apparently
unsolvable crisis.
Ultimately, Congress created a 400,000-
word compromise of baffling complexity.
Before we review whether this effort was
worth the trouble, let’s look at the major
(but not the only) provisions.
By increasing both the number of
Americans with private insurance policies
and those participating in government
health care programs, Congress hopes
Americans will get the health care they
need. The act’s scope covers both
businesses and individuals.
The ACA encourages businesses to
purchase private health insurance for their
employees by fining businesses if they do
not. In many cases (but not all), businesses
will find it cheaper to buy the insurance
rather than pay the fine. Because insurance
prices go up as the number of employees
goes down, small businesses may qualify for
government subsidies to enable them to
purchase insurance for their employees.
What about those of us who can’t
get insurance through employers?
•Jp*
Individuals without employer-sponsored
insurance must buy their own insurance or
face a similar fine. This format is called a
“mandate.” Individuals unable to afford any
policy may qualify for government subsidies
or be excused from both insurance and fine.
To ease the challenge of finding insurance,
Congress compelled states to create “health
insurance exchanges.” These are websites
where insurance companies offer policies in
similar formats to make comparisons easier.
Additionally, participating companies must
provide minimal levels of benefits in policies
sold in the exchange. The ACA does not
compel insurance companies to participate
in exchanges, and individuals may purchase
policies outside the exchange.
What If you depend upon Medicaid
or Medicare for health care?
The ACA expands some benefits for
Medicaid and Medicare patients. States
providing a higher level of benefits for
Medicaid patients receive larger federal
subsidies. Medicare benefits, especially
primary and preventative care, are greatly
expanded. The increased spending on
Medicaid and Medicare combined with
subsidies for businesses and individuals will
increase government spending on health
care.
To pay for this increase, the federal
government will reduce other spending and
seek new revenue. For example, many
providers will see lower payments for
Medicare patients. Most Medicare patients
will pay more money out of pocket. Wealthy
individuals will pay higher income taxes.
Private insurance companies, drug
companies and businesses that make
medical equipment will pay new taxes.
And the ACA encourages health-care
providers to form Accountable Care
Organizations (ACOs). ACOs are variants of
managed care, in which provider
organizations receive a fixed annual fee for
Medicare patients rather than be paid fee-
for-service. In this fashion, ACOs make
providers financially responsible for medical
outcomes of their Medicare patients: If a
Medicare patient does well and requires less
money, providers keep the difference. If
patients do badly, providers absorb the cost.
What happens to total government
spending when all these increases and
decreases are added up?
Most studies suggest overall government
spending will go down.
So the ACA sounds like a heck of a deal:
More insurance policies, reduced
government spending and passing financial
risks onto providers. What’s not to like?
Some readers may remember from Part
One of this series the three fundamental
goals of reform: (1) health care access when
we need it, (2) lower costs and (3) better
health.
Does the ACA achieve
these goals?
The ACA will not provide universal
access. Even when working perfectly, 40
million Americans will be underinsured. Ask
any of the 750,000 Americans with health
insurance who were still bankrupted by an
illness (especially the 34,000 Oregonians
who suffered this fate last year). Worse than
that, 20 million additional Americans will
have no access at all because they have no
money. Result: 60 million Americans (20
percent of us) remain at risk for losing
homes, limbs or lives if we get the wrong
disease at the wrong time.
Will the ACA reduce costs?
No. The savings to taxpayers in reduced
federal spending will be billed to them when
they become patients, with higher insurance
policy prices and higher out of pocket
spending. Even though it reduces
government spending, the ACA neither
lessens overall health-care costs nor does it
stop the relentless increase in health care
spending.
Will the ACA improve outcomes?
For the answer, we must take a closer
look at Massachusetts.
In 2006, then-Gov. Mitt Romney signed a
law of his own design compelling everyone
A physician is seen
in Massachusetts to purchase health
through the window
insurance or face a fine. Sound familiar?
at the University of
The ACA applies the same principles of the
Illinois at Chicago
Massachusetts law (call it “RomneyCare”) to
hospital.
the entire nation. The similarity was put
more succinctly by Jonathan Gruber, the
REUTERS/JIM Y O U N G
MIT economist who assisted in designing
both laws: “They’re the same (expletive
deleted) bill.”
So what happened in Massachusetts after
2006?
Nearly 100 percent of residents (98
percent in 2010) own
a health insurance
policy. That’s good.
But public health
One would have hoped a ll
measures have not
the agony endured by
improved, medical
bankruptcies continue Congress t® generate this
to rise, and
massive b ill would have
Massachusetts is still
prodnoed a result w orthy of
the most expensive
that effort, But we enjoy no
state, in the most
expensive country, for progress, Im e rlc a n health
health care. This does care remains a jnggornant
not bode well for
that devastates our families?
American health care
when the ACA applies cripples onr business?
those same principles smothers onr economy and
on a national basis.
steals our health«
The ACA qualifies
as health care
legislation, but it fails
to qualify as reform.
To its credit, the ACA has one dramatic
asset: For the first time in American history,
the U.S. Congress decided health care
access for all citizens is a fit subject for
congressional concern. Too bad Congress
was unable to create a program to provide
that access.
Ultimately, however, the ACA damages
American U.S. health care by its very
premise: It enshrines private health
insurance as the sole portal to health care
for most Americans. Thus, it perpetuates
and strengthens the very aspect of our
health care system that makes us uniquely
vulnerable: our dependence upon the
private health insurance industry.
Hence the disappointment in the
Affordable Care Act. One would have hoped
all the agony endured by Congress to
generate this massive bill would have
produced a result worthy of that effort. But
we enjoy no progress. American health care
remains a juggernaut that devastates our
families, cripples our business, smothers
our economy and steals our health.
After this discouraging assessment, we
deserve some good news. And there are
indeed reasons to be hopeful which we'’ll get
to later in this series. But first we’ll visit the
American health insurance industry. If the
ACA can’t save America from itself, can a
liberated and empowered insurance industry
save our health and make our families whole
again?