“Victory For The Middle Class”: On Obamacare’s Third Birthday, There Are Already Reasons To Be Grateful
On March 23, 2010, Obamacare — formally known as the Patient Protection and Affordable Care Act — was signed into law by President Obama.
Three years later, the bulk of the first serious attempt at near-universal health care has not yet taken effect. Health marketplaces are still being formed, states are still deciding if they’ll take Medicaid expansion and the subsidies that will help tens of millions of Americans afford health care won’t roll out until January 1, 2014.
Implementing Obamacare won’t be easy, as even some of the biggest fans of the program admit. Expanding Medicare to cover all Americans would have to be an even simpler solution but a complete political impossibility — given that Joe Lieberman (I-CT), whose vote was necessary to pass the law, single-handedly vetoed a provision that would allow 55- to 64-year-olds to buy into Medicare. It’s a compromise solution that uses unpopular provisions — like the individual mandate — to achieve extremely popular results — ending lifetime limits and banning insurance companies from dropping patients once they become sick.
There will be plenty of time to debate the efficacy of Obamacare — especially with insurance companies enjoying record profits threatening to raise rates in order to justify changes to the law.
But right now we should celebrate the greatest victory for the middle class since Medicare and Medicaid. At its heart, Obamacare is a program that asks the rich and corporations to pay a little more to help working Americans get insurance they can count on, thus lowering the cost of health care for everyone. We already pay for each other’s health coverage, but just in the dumbest possible way — emergency rooms.
Here are five reasons to be grateful for Obamacare, which is already making life better for the middle class.
Obamacare Frees Workers And Entrepreneurs
One of the most popular aspects of Obamacare is that beginning in 2014, insurance companies will no longer be able to deny people coverage because of pre-existing conditions. Because insurance companies had been able to do this, many people avoided going to the doctor for fear of being diagnosed with a disease or condition that would brand them for the rest of their lives. Some stayed in jobs they didn’t want and others didn’t take the leap to start a new business for fear of not being able to get coverage. These changes especially free women — who by federal law can no longer be charged more for care because of their gender — to pursue new opportunities.
Insurance Companies Pay You Back
Insurance companies are required for the first time to prove that they’re spending between 80 and 85 percent of premiums, depending on the size of the company, on actual health care. If companies don’t spend that amount on coverage, they have to return that money to their customers — $1.2 billion was returned in 2012 to self-employed Americans whose insurers didn’t hit the proper ratio.
Millions Of Young People Already Covered
An estimated six million college students are already taking advantage of Obamacare’s provision that lets them stay on their parents’ insurance until the age of 26. This has led to a record drop in uninsured young people, allowing them to go back to school or pursue graduate degrees without taking on as much student loan debt.
Seniors Spend Less On Drugs
One of the most immediate benefits of Obamacare was the closing of the Medicare D prescription drug “donut hole,” which requires seniors to pay for the coverage gap between their deductible and yearly limit, at which point the plan covers all medication — $6.1 billion in drug coverage has already been distributed to seniors, which leads to the irony that Republicans ran and won in 2010 on saying that Obamacare cuts Medicare when, in fact, benefits for seniors have only increased. All the savings come from reforming the way providers are paid.
The Red States Get To Pay The Blue States Back
When the Supreme Court ruled that the mandate in Obamacare was Constitutional, it also gave states the chance to opt out of the Medicaid expansion that will provide free public health care for those not already on Medicaid, but who earn up to 133 percent of the poverty level. The states that are turning down the expansion, unfortunately, are some of those that need it the most. All of the states that have rejected the federal extra funding — which begins at 100 percent of the cost of the expansion and goes down to 90 percent — are states that generally vote Republican.
You probably know that most red states take in more federal money than they contribute, as Republican policies encourage growth of programs like food stamps. Though Republican governors can reject the benefits of Medicaid expansion, their richest citizens and corporations will still have to pay the taxes. As a result, they won’t be such “takers.”
Unfortunately, the working poor of red states — who earn too much to be on basic Medicaid — will suffer without the health insurance they need. Those on Medicare and Medicaid will likely see fewer doctors who want to accept clients from these programs, as Medicaid expansion was supposed to make up for the cut in reimbursement rates that begins in 2014. And all residents will not enjoy the slowdown in the growth of health care costs that will come from shrinking the number of the uninsured.
For red state governors, it’s a chance to fulfill the prophecies of doom Republicans made when Obamacare passed. But for residents of blue states, it’s a chance to make America’s health care system more equitable, with red states finally paying closer to their fair share.
By: Jason Sattler, The National Memo, March 22, 2013; Photo: The Advisory Board Company
Sometimes the best journalism explains what’s right under our noses. In Steven Brill’s exhaustive Time magazine cover article “Bitter Pill: Why Medical Bills Are Killing Us,” it’s the staggeringly expensive, grotesquely inefficient and inhumane way Americans pay for medical care.
“In the U.S.,” Brill reminds us, “people spend almost 20 percent of the gross domestic product on health care, compared with about half that in most developed countries. Yet in every measurable way, the results our health care system produces are no better and often worse than the outcomes in those countries.”
Obamacare or no Obamacare, ever-increasing prices show few signs of abating. For all the fear and uncertainty the president’s health insurance reform will eliminate from people’s lives, it’s almost incidental to the overall question of costs.
Moreover, had the law attempted to seriously restrain profiteering hospital chains, pharmaceutical companies and medical equipment manufacturers that Brill depicts as largely responsible for the current morass, there’s no way it could have passed.
Yes, it’s a fiscal issue. If Medicaid and Medicare paid the same amounts for health care as, say, Switzerland or France—the economist Dean Baker has repeatedly pointed out—the Federal budget deficit would virtually disappear. (Although the two federal programs are infinitely more frugal and efficient than the rest of the system.)
But it’s an economic and moral issue as well. Brill was inspired to research the article after noticing the gleaming spires of the Texas Medical Center in Houston, of which M.D. Anderson is the brand name. It’s a great hospital, dispensing world-class care (at world-class prices). But how exactly, Brill wondered, had hospitals become five of Houston’s 10 largest employers? It’s a pattern repeated nationwide, as hospital chains have come to dominate local economies.
Essentially, he found, by gaming what the article describes as “the ultimate seller’s market”—an economic realm where buyers (i.e. hospital patients) are normally ignorant, often frightened and sometimes literally helpless. And who often think they’ve got adequate insurance, until they examine the fine print.
Granted, nobody bargains over a cancer diagnosis or heart attack. Even so, Brill wondered “why should a trip to the emergency room for chest pains that turn out to be indigestion bring a bill that can exceed the cost of a semester of college? What makes a single dose of even the most wonderful wonder drug cost thousands of dollars? Why does simple lab work done during a few days in a hospital cost more than a car?”
Good questions, all. Brill answers them by taking readers on a guided tour of the Alice-in-Wonderland world of medical billing as experienced by ordinary patients for whom getting the bill became an ordeal equal to and sometimes surpassing the illness itself.
Such as “Steve H.,” who never asked the cost of outpatient treatment for his ailing back because his union-sponsored health insurance plan had $45,000 remaining on its annual $60,000 spending limit. “He figured, how much could a day at Mercy [hospital] cost?…Five thousand? Maybe 10?”
The bill came to $89,000—including $45,000 for an electronic stimulator Brill learns that Mercy Hospital bought from the manufacturer for $19,000, which spent roughly 25% of that amount making and shipping it. (An arbitrator persuaded the hospital to settle for $10,000 of the $44,000 it said Steve H. owed.)
Moreover, as medical markups go, Steve H. got off relatively easy. The “chargemaster” computerized system hospitals use to prepare bills routinely assesses patients 10 times and more what commonly used items like gauze pads and surgical gowns actually cost. If baseball teams treated their captive audiences like that, they’d be selling $40 beers.
At times, Brill’s mordant deconstruction of hospital bills can be grimly funny—even if Alice D., left facing a $900,000 bill for her dead husband’s futile cancer treatment, can be pardoned for not laughing. In the end “her losses from the fixed poker game that she was forced to play in the worst of times with the worst of cards,” persuaded Alice she could never afford to remarry.
Even chemotherapy patients who survive can be staggered to learn that a miracle drug cost Genentech roughly “$300 to make, test, package and ship to M.D. Anderson for $3,000 to $3,500, whereupon the hospital sold it to [patient Steve] Recchi for $13,702.33.”
Ultimately, many of these humongous bills are never collected; the industry average is around 35 percent, although prestigious hospitals like M.D. Anderson collect 50 percent of what they charge. Most are “non-profits” only in the sense of having no stockholders; instead, administrators are paid princely multi-million-dollar salaries. They occupy themselves with building empires.
In the end, Brill concludes that Americans pay an enormous price for refusing to admit that “because the health care market deals in a life-or-death product, it cannot be left to its own devices.”
He and Time have done a great public service.
By: Gene Lyons, The National Memo, March 13, 2013
Marco Rubio’s rebuttal to the State of the Union address was remarkable for being unremarkable—it contained much of the same warmed-over pablum we heard from the stage in Tampa Bay at the Republican National Convention six months ago. President Obama “believes [the government] the cause of our problems” and that “More government isn’t going to help you get ahead. It’s going to hold you back.” There was even a Solyndra reference.
But the most interesting and substantive part of Rubio’s speech was the attack he leveled against healthcare reform. The Affordable Care Act will be implemented over the next—wait, sorry. I’m incredibly thirsty. I need some water before I finish this post.
Okay, back. In any case, as the ACA is implemented over the next few years, Republicans must continue to launch rhetorical bombs at it, because a negative public perception of the law would create cover for Republican governors to deny Medicaid expansion in their state, and might also blunt “Obamacare” as a powerful Democratic talking point in 2014 and 2016.
So here’s what Rubio said about the ACA:
[M]any government programs that claim to help the middle class, often end up hurting them instead.
For example, Obamacare was supposed to help middle-class Americans afford health insurance. But now, some people are losing the health insurance they were happy with. And because Obamacare created expensive requirements for companies with more than fifty employees, now many of these businesses aren’t hiring. Not only that; they’re being forced to lay people off and switch from full-time employees to part-time workers.
Rubio is explicitly trying to scare people into thinking they’re about to either lose their health insurance or get fired because of Obamacare. But none of this is true.
Let’s start with the first claim: that “some people are losing the health insurance they were happy with.” Rubio is eliding the fact that in the final telling, ACA is projected to insure 30 million Americans who otherwise don’t have health insurance. It’s not immediately clear who Rubio thinks is losing their policies, because after all, insurance companies can no longer just drop people from coverage because of pre-existing conditions.
Rubio goes on to say that “because Obamacare created expensive requirements for companies with more than 50 employees, now many of these businesses aren’t hiring” and others are switching from full-time to part-time workers because of the ACA. But that’s just not the case.
A study this summer from the Midwest Business Group on Health found that “there is little indication that employers plan to drop healthcare coverage.” The “expensive requirements” Rubio alludes to will be about 2.3 percent, according to one international consulting firm, and other studies show that healthcare reform might ultimately help small businesses because of the subsidies they receive and the fact they are offering a more attractive compensation package for employees. That’s what happened in Massachussets under Romneycare.
Sure, some right-wing business titans who run places like Applebee’s and Denny’s may say they’re going to cut back hours because of the dread of Obamacare, but they are the exceptions to the rule. Moreover, their actions are just one small part of a disturbing trend of large companies shifting healthcare costs onto low-wage workers—as would be any employer who cuts his full-time employees to part-time so he is not responsible for increased coverage requirements under the ACA.
And this gets to the real problem with Rubio’s speech. His case here is that Obamacare is hurting middle-class Americans—but then he specifically describes companies who would cut workers’ hours so they aren’t entitled to health insurance. It’s these vicissitudes of the free market that the ACA was trying to address, like when insurance companies drop people from coverage because they once took heartburn pills. Rubio’s larger case—his whole case in this speech—is that the government is hurtful, not harmful. But he was simply unable to prove it.
By: George Zornick, The Nation, February 13, 2013
America’s Big Religious War ended on Friday. Or at least it ought to.
A little more than a year ago, the Obama administration set off a bitter and unnecessary clash with the Roman Catholic Church over rules mandating broad contraception coverage under the Affordable Care Act. The Department of Health and Human Services’ announcement of new regulations is a clear statement that President Obama never wanted this fight.
The decision, the administration’s second attempt at compromise, ought to be taken by the nation’s Catholic bishops as the victory it is. Many of the country’s most prominent prelates are inclined to do just that — even if the most conservative bishops seem to want to keep the battle raging.
But more importantly, the final HHS rules are the product of a genuine and heartfelt struggle over the meaning of religious liberty in a pluralistic society. The contraception dispute was difficult because legitimate claims and interests were in conflict.
The vast majority of Americans believe that health insurance should cover contraception. At the same time, the Catholic Church has a theological objection to contraception, even if most Catholics (including regular churchgoers) disagree with its position. The church insisted that its vast array of charitable, educational and medical institutions should be exempt from the contraception requirement.
The church made a mistake in arguing its case on the grounds of “religious liberty.” By inflating their legitimate desire for accommodation into a liberty claim, the bishops implied that the freedom not to pay for birth control rose to the same level as, say, the freedom to worship or to preach the faith. This led to wild rhetorical excesses, including a comparison of Obama to Hitler and Stalin by one bishop and an analogy between the president’s approach and the Soviet constitution by another.
But the church had good reason to object to the narrowness of the original HHS definition of what constituted a religious organization entitled to exemptions from the contraception requirement. If an organization did not have “the inculcation of religious values” as its purpose and did not employ or serve primarily those who shared the faith, it got no exclusion at all.
The problem is that the vast charitable work done by religious organizations to help millions, regardless of their faith, is manifestly inspired by religion. The church could not abide the implicit reduction of its role merely to private expressions of faith. Don’t most Americans devoutly wish that religious people will be moved by their beliefs to works of charity and justice?
The HHS rules announced Friday scrapped this troubling definition in favor of long-established language in the Internal Revenue Code. In an interview, HHS Secretary Kathleen Sebelius showed a becoming humility, and it would be nice if this rubbed off on her critics. However defensible the original rules might have been, she said, “they really caused more anxiety and conflict than was appropriate.”
“What we’ve learned,” she said, “is that there are issues to balance in this area. There were issues of religious freedom on two sides of the ledger” — the freedom of the religious institutions and the freedom of their employees who might not share their objections to contraception.
This is where the other accommodation kicked in: Many Catholic institutions self-insure. While the administration rightly wants broad contraception coverage to include hospital workers, teachers and others at religious institutions, it also seeks to keep religious organizations from having “to contract, arrange, pay or refer” for coverage “to which they object on religious grounds.”
Under the new rules, employees who want it will be able to get stand-alone coverage from a third party. Some of the costs will be covered by small offsets in the fees insurers will have to pay to participate in the new exchanges where their policies will be on sale. It’s an elegant fix.
There are two reasons for hope here, particularly for Catholic progressives. First, the administration recognized the problem it had created and resolved it. Vice President Biden played a key role here, keeping lines of communication with the church open.
Second, many bishops have come to realize that the appearance of a state of war with Obama not only troubled many of the faithful — Obama, after all, narrowly carried the Catholic vote — but also threatened to cast a church with strong commitments to immigrants, social justice and nonviolence as a partisan, even right-wing organization.
This war has been bad for everyone involved. Obama has moved to end it. Here’s a prayer that the bishops will also be instruments of peace.
By: E. J. Dionne, Jr., Opinion Writer, The Washington Post, February 3, 2013
Most of the really big changes made by the 2010 health law don’t start for another year. That includes things like a ban on restricting pre-existing conditions, and required insurance coverage for most Americans. But Jan. 1, 2013, will nevertheless mark some major changes.
One of those changes that will affect everyone with private health insurance actually took effect last September. But most people won’t see it until they renew or apply for new health insurance. It’s called a summary of benefits and coverage. The idea is to help people actually understand what’s in their insurance policies.
“One of the big complaints of people in polls or focus groups is that they just … don’t understand either the coverage or the price,” said Jay Angoff, a former official at the U.S. Department of Health and Human Services who worked on implementing the health law.
But with the new document, he says, “there’s a standard format that allows people to compare benefits to make apples-to-apples comparisons, not just on price, but on benefits.”
Health plans will also have to provide consumers a glossary of insurance terms if they ask for it.
“It’s still harder than some people would want,” Angoff says. “It’s still a complicated area. But I think HHS has really done a very good job in making it as simple and as meaningful as possible.”
Later in 2013 will also bring a key launch date for the law, says Angoff: “Oct. 1, 2013, is when open enrollment begins.”
That’s when people can start signing up for their 2014 coverage through the new health exchanges, or marketplaces, that the states and federal government are creating. Angoff, who used to head the office that’s in charge of building those exchanges, says he’s confident that things will happen on time.
“HHS has met all statutory deadlines on this until this point, and I have confidence that HHS will continue to meet those deadlines,” he said.
But the majority of what happens on Jan. 1 is to pay for the changes in 2014. In other words, tax increases and cuts in tax deductions. For example, starting next year, people will only be able to put $2,500 pre-tax into Flexible Spending Accounts that they use to pay for items insurance doesn’t cover.
“For example if they buy eyeglasses, if they pay copays on drug benefits or to their physician, they can submit those claims and be reimbursed from the pretax dollars,” said Marilyn Moon of the American Institutes for Research.
Moon says that while the change may hurt some people with very high out-of-pocket spending not covered by insurance, lawmakers decided this was a fair way to raise some of the money needed to pay for the rest of the law.
“This is a benefit that largely accrues to higher-income individuals who can afford to set aside a certain amount of money every year, to pay towards their health care spending,” she said.
There’s another tax change coming next year for the wealthy. Individuals earning more than $200,000 a year and couples earning more than $250,000 will see a nearly 1 percentage point increase in their Medicare payroll tax. They’ll also have to pay a 3.8 percent Medicare tax on their non-wage income. Moon says that represents a big change.
“The payroll tax usually applies only to wages, and now this law will extend it to investment income as well,” she said.
Those who take deductions for medical expenses on their income taxes will also see a change starting in 2013. Right now, expenses in excess of 7.5 percent of adjusted gross income are deductible. That’s going up to 10 percent for all except the elderly.
It will affect some people who spend a lot on medical care, says Moon. But the new law should also reduce the number of people with those very large bills, “because if everyone has health insurance, many fewer people should have to pay large amounts out-of-pocket on health care. Ten percent will not affect very many people, one would hope, when they get better insurance coverage.”
Finally, there’s a key change made by the health law for 2013 that will affect only the poor. Starting Jan. 1, state Medicaid programs will be required to reimburse doctors who provide primary care at Medicare rates, which are substantially higher. The idea is to get more doctors into the Medicaid program, which will itself expand in 2014.
The Medicaid increase, however, is only for two years.
By:Julie Rovner, NPR, January 1, 2013