THE END OF AFFORDABLE CARE
HOW THE AFFORDABLE CARE ACT CAME TO BE, AND THE BATTLE OVER ITS EXISTENCE ABIGAIL MUMMA
In January 2017 there was a small scandal bubbling about the Affordable Care Act. It wasn’t a question of its legality or a plan for replacement, rather a growing suspicion that Americans were more confused by health care than previously imagined. 17% of respondents to a Morning Consult survey believed that Obamacare and the Affordable Care act were different acts of legislation entirely[1]. Many were quick to poke fun at those who made this mistake, but the misunderstanding is not due entirely to personal neglect for the truth. Politicians frequently use “Obamacare” as slang intentionally loaded with negative connotations. In addition, health care is a complicated subject, only complicated further by a political dimension. But citizens can’t afford to be uneducated on health care, as the life or death of a bill may spell life or death for patients.
The End of Affordable Care
Healthcare reform hasn’t always been the partisan battle it is today. The first major step towards healthcare reform was the introduction of Medicaid and Medicare in 1965, which covered low income families and the elderly, respectively. These two programs went on to become pawns in the healthcare debate, with their expansion or retraction depending on the current president or the Senate. While expanding these programs is often seen as a liberal objective, one of the biggest Medicare expansions was produced by former President Ronald Reagan who is hailed as a one of the greatest conservative presidents in recent history. During his term he also passed EMTALA (Emergency Medical Treatment and Active Labor Act), which required all hospitals who accepted Medicare payments to also accept patients in need of emergency care regardless of their insurance coverage or their immigrant status. Ironically, much more left leaning president Bill Clinton had significantly more trouble passing healthcare reform. Both Bill and Hillary Clinton worked together to create the Health Security Act, which required all citizens to purchase healthcare. The bill also included subsidies for low-income families, the creation of a National Health Board, and a provision that insurers must provide coverage for abortions, although doctors are not compelled to perform them. During Bill Clinton’s campaign
Lyndon Johnson
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2003: Signed the Medicare Prescription Drug Improvement and Modernization Act
1972: Expands Medicaid to cover disabilities and increases payroll tax
1989: EMTALA passed and Medicare buget expanded
1993: Health Secutiy Act proposed 1997: SCHIP passed
1964: Introduction of Medicare and Medicaid
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healthcare was a major issue that Clinton promised to address during his presidency. However due to an onslaught of negative advertisements from conservative groups and healthcare lobbyists the bill was killed before it even reached a vote in the Senate. During his second term Bill Clinton was able to pass SCHIP (State Children’s Health Insurance Program) which insured children in low-income families but was still a far cry from the universal healthcare plan he had campaigned on. So why the reversal in views on healthcare? It could be due in part to who was presenting these bills. A liberal bill from a republican president would appear much more non-partisan than the same bill from a democrat. Many also point to Bill Clinton’s choice to involve Hillary Clinton in the creation of the plan as a major factor in the public disapproval. The bill even picked up the name “Hillarycare” as a way of demonizing the plan. A Newsweek article from 1993 characterizes Hillary Clinton’s introduction of the plan as “commanding”, full of “arrogance”, and a “scheme”[2]. Despite Bill Clinton being the president and therefore responsible for the bill, the public and the media at large decided to pin most of the responsibility on Hillary Clinton. This association was enough made the bill seem feminine, leftist, and too weak to ever be passed.
The End of Affordable Care
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The rationale for almost every health care related expansion in United States history is due to cost. Both procedures and prescriptions cost significantly more in America than they do in other countries. Avastin, a cancer treatment drug, costs $3,900 in the United States and yet retails for only around $470 in the UK[3]. The rise of prescription drug prices won’t be halted by an increase in health care availability, but it will alleviate the prices that consumers have to pay out of pocket. Although a majority of politicians support changes to health care, their agreement ends when it comes to the point of how to actually make change happen. Democratic lawmakers generally support the Affordable Care Act and the expansion of Medicare and Medicaid. Republicans on the other hand feel that the government is either overstepping its bounds in dealing with health care, or that the solution is an alternate plan like tax credits for health spending.
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Avastin
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Bypass Surgery
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64% of personal bankruptcies are due to medical debt
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When uninsured, hospitals are still required to treat patients thanks to the EMTALA act created under Ronald Reagan. However the problems for many patients don’t start until they leave the hospital. A 2009 study revealed that 64% of personal bankruptcies are due to medical debt[4]. While many struggle to pay medical bills even with insurance, bankrupt individuals who are uninsured have on average $27,000 in medical debt[5]. Meanwhile insurance company Humana made $30.960 billion in revenue in 2009[6] despite what they describe in their annual report as “a volatile political environment”[7]. Expansion of health care options in any form, whether is be a conservative or liberal plan, will most likely cut into the profits of the major insurance corporations. These companies won’t take any plan lying down though. America’s Health Insurance Plans, a health insurance trade group that represents Humana, spent $8.85 million on lobbying in 2009 alone[8]. Whether or not huge health care corporations deserve a seat at the table in discussing health care reform, they’ve bought themselves some powerful influence in the process.
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Knee Replacement
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One of the most well known aspects of the Affordable Care Act is the individual mandate. Essentially, all Americans have three choices when it comes to insurance; either be insured, get an exemption, or pay a fine. For people already insured, this part of the bill changed little, however for the uninsured this meant they most likely had to purchase insurance. A lot of the pushback from opponents was based on this mandate, as many saw it as an overexertion of federal powers. There was also concern that this was an intrusion on personal rights and that health care would be too expensive for some people
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The End of Affordable Care
to afford. Although there is no exemption for simply not wanting to purchase insurance, there are several provisions to account for the price of insurance for lower income citizens. The price control for lower income citizens is achieved through a few different methods. First, people making up to 400% of the federal poverty level (~$47,000 for an individual) are eligible for prime tax deductions to offset the price of insurance[9]. If their income also falls below 250% of the federal poverty line they are eligible for subsidies to cover deductibles and other out-of-pocket costs[10]. An
expansion to Medicaid was also included in the original wording of the Affordable Care Act, which would have made all single individuals making up to 138% of the federal poverty line eligible for coverage under Medicaid[11]. Between subsidies and an expansion of Medicaid, the goal was that nobody would not have enough money to afford insurance. However, a Supreme Court ruling after the bill was passed decided that the individual states should be allowed to decide whether to expand Medicaid. To simplify access to health insurance, the ACA set up a system of health insurance marketplaces. This gives
a centralized location for those seeking insurance to explore the options provided by a variety of insurance companies. The requirement for a healthcare exchange can be fulfilled either by the individual states, who have the option to set up their own marketplace, or they can choose to default to a federally-facilitated marketplace hosted on “healthcare.gov”. From there it is up to participants to enroll in the plan they find best suited to their needs. Generally the plans are grouped into 5 main categories called the ‘metal categories’. Bronze, Silver, Gold, Platinum, and Catastrophic plans are
grouped based on the price of their monthly premiums[12]. Bronze plans have the lowest premiums, but the highest costs when it comes to getting care, while Platinum plans have higher monthly plans but lower deductibles. Not everyone is required to purchase one of these plans, but everyone technically has access to the health insurance marketplace. Persons falling outside of 400% of the poverty level can shop for full price insurance in the exchanges[13], but will not be able to access any of the tax deductions or subsidies. Aside from insurance enrollment, the Affordable Care Act also included new
rules protecting patients from insurance companies. These tend to be much more favorably viewed than the individual mandate or the exchanges. A Kaiser Family Foundation poll showed that while the individual mandate has a favorability rating of about 35%, a new provision allowing children to stay on their parent’s plan until age 26 has an 85% favorability rating[14]. Even among citizens who voted for Donald Trump in the 2016 election, a candidate promising to repeal and replace the act, there is an 83% approval rating for that provision[15].
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A few different factors have complicated the effectiveness of the Affordable Care Act. Right before the bill was passed in 2010, the share of the non-elderly population that did not have insurance peaked at around 18.2%, and the most recent data available shows that in 2015 that figure was 10.5%[16]. While this is certainly a big drop and has made a big difference for people previously unable to purchase insurance, it’s also not the universal coverage many envisioned the bill would bring. This is in part due to the reluctance of many states to expand Medicaid. As of January 2017, 19 states had still not expanded their Medicaid programs[17] to fill in the gap between the reaches of the current programs and Obamacare. People who were insured through both private employer-sponsored insurance and plans purchased through the marketplace have seen a rise in premiums. This has been a huge part in the argument for repealing the bill, and the data seems to support this goal. From 2013 to 2016 premiums for families rose 11% for those enrolled in private plans, and 38% in ACA marketplaces[18]. This translated to an overall 43% rise during President Obama’s 8 years in office[19]. However, this figure seems a lot smaller when put in context with the 100% increase in premiums seen under 8 years of President George W. Bush[20]. So yes, premiums are going up, but the rate of change has actually decreased. In addition, if an enrollee is receiving subsidies and their premiums increase, the subsidies will increase as well to keep pace. The extra cost is still paid for by taxpayers, but it still does a lot less damage on an individual basis. Most notably for consumers on the purchasing end of the health exchange, the healthcare.gov website had large issues with stability. For many people the website would not function at all, and with the impending individual mandate many feared they would be fined despite wanting to purchase insurance. Eventually the technical issues were resolved, but the length of time it took colored the lifespan of the rest of the bill in a negative way. Between this and the fact that some provisions were pushed off until later dates, the implementation fed into some fears that the bill was being rushed without thought to the actual impacts. There have been challenges to almost every single provision included in the ACA, but a few select pieces seem to have the most conservative opposition. First, competition in the ACA exchange has plummeted as several companies have pulled out in states where they see it less profitable to operate. In 2016, 17% of people would only have one provider in their county to choose from[21], which feeds into higher premiums and deductibles. Republicans hope that by decentralizing the enrollment process and repealing the individual mandate, insurance companies would have better access
to all customers, rather than the high-risk pool that the marketplace has become. This would create incentives for the insurance companies to move back into some of these areas, but it’s uncertain whether they actually would. This legislation also inspired one of the largest supreme court decisions in recent years, Hobby Lobby v. Burwell. Because the ACA originally included a provision that employer-sponsored insurance must include coverage for contraceptives, Hobby Lobby sued, and won, a case that allowed employers with religious reservations to be excluded from this provision. However, individual taxpayers were still concerned that their money would go towards covering birth control and abortions. There are a few problems with these concerns right off the bat. First, Medicare has been funding birth control for enrollees before the ACA was even introduced, so in reality this is not a new issue. Also, the Hyde amendment keeps any federal tax dollars from going towards abortion services, and any funding for those services under the ACA must come from the state. Aside from the pushback on the right, liberals have also had significant critiques of the Affordable Care Act. Bernie Sanders advocated for a single-payer system during his 2016 presidential run. This quickly became a popular goal for healthcare reform for those on the far left. While health insurance companies often complained about losses under the ACA, they actually often made record profits[22] due to the expansion of Medicaid and the increased number of enrollees. UnitedHealth, one of the largest health insurers in the country, has seen an increase of 480% in their stock since 2010[23]. Some see this as too much profit for a company to make from government programs. After all, those profits are essentially coming from the taxpayer. A single payer system, sometimes also called “Medicare for all”, would create a national health care system that every citizen pays into through payroll taxes and can utilize for almost all medical costs, not too dissimilar to how Social Security works currently. In August 2005, the National Coalition on Health Care estimated that there would be a savings of over $1.1 Trillion dollars over ten years if a functional single payer system was enacted[24]. They also examined the possibility of an individual mandate system like the one in the ACA, and predicted that mandates would be “improvements over the status quo, but would not reduce costs as dramatically or provide the same highquality coverage to all”[25]. In addition, a new payroll tax large enough to cover those expenses, and the general reluctance of many Americans to make another dramatic change to their healthcare system makes this plan difficult to implement.
So yes, premiums are going up, but the rate of change has actually decreased
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The End of Affordable Care
Affordable Care Act Approval and Disapproval Ratings Since 2010
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In March 2017, House Republicans introduced their new plan to repeal and replace the Affordable Care Act. This came after years of battling it under the Obama administration and publicly branding it “Obamacare”. The American Health Care Act was supported immediately by President Donald Trump, who characterized it in a tweet as “Our wonderful new Healthcare Bill”, and also stating that Obamacare was “imploding fast”[26]. The bill would have essentially repealed the individual mandate, halted Medicaid expansion, and made subsidies based off age instead of income. The bill still included some remnants of the ACA, like the existence of tax credits for poor Americans and the provision that people can no longer be denied for pre-existing conditions. Almost immediately, something very unusual happened in Congress. Representatives from both the right and left came out in opposition of the bill, albeit for varying reasons. Democrats wanted to amend the ACA but generally keep things as they are, the Republicans largely felt that the bill was did not go far enough in repealing the existing law. There was also the predictions that it would be highly likely that many Americans would lose their existing coverage and
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that the tax benefits would mostly just affect wealthy Americans. The bill garnered massive public opposition, and groups from the AARP[27] to Heritage Action[28] made statements calling for the bill to be killed. Much like the implementation of the ACA, the bill picked up the moniker “Trumpcare”, to which the Trump administration quickly responded telling people “It’s not Trumpcare”[29]. Within 18 days of the introduction of the American Health Care Act, the bill was killed. Although for a long time the disapproval numbers for the Affordable Care Act were higher than approval, in the first few months they spiked, revealing that 54% of Americans approve of the bill in 2017[30]. There was, and is, significant flaws in the makeup of the ACA. Health insurance companies and drug companies still make ridiculous profits while American citizens deal with rising premiums. To blindly accept the ACA in the face of a bill much more publicly disfavored would be doing a large disservice to Americans. There is the possibility of a functional and cost effective health care system for America, and the favorability of “Obamacare” over “Trumpcare” gives an indication that we may just be on the right track.
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Works Cited
Dropp, Kyle; Nyhan, Brendan (2-7-17). “One-Third Don’t Know Obamacare and Affordable Care Act Are the Same”. The New York Times. Link. Cohn, Bob (9-18-94). “The Lost Chance”. Newsweek. Link. Kliff, Sarah; Oh Soo (7-19-16). “America’s health care prices are out of control. These 11 charts prove it”. Vox. Link. CBSNews (6-5-09). “Medical Debt Huge Bankruptcy Culprit”. CBS. Link. CBSNews. Link. Humana (2009). “2009 Annual Report”. Link. Humana. Link. MapLight (2009). “America’s Health Insurance Plans - Lobbying”. Link. Merhar, Christina (6-3-14) “Healthcare Deductions, Tax Credits, and Subsidies for Small Businesses”. ZaneBenefits. Link. Merhar. Link. Baron, Sarah (4-2-13). “10 Frequently Asked Questions About Medicaid Expansion”. Center For American Progress. Link. HealthCare.gov. “The ‘metal’ categories: Bronze, Silver, Gold & Platinum”. Link. HealthCare.gov. “Are you eligible to use the Marketplace?”. Link. Kirzinger, Ashley; Sugarman Elise; Brodie Mollyann (12-1-16). “Kaiser Health Tracking Poll: November 2016”. Kaiser Family Foundation. Link. Kirzinger. Link. Kaiser Family Foundation (9-29-16). “Key Facts about the Uninsured Population”. Link. Kaiser Family Foundation (1-1-17). “Status of State Action on the Medicaid Expansion Decision”. Link. Jacobson, Louis (1-9-17). “Mike Pence says under Obamacare, ‘American families have seen an increase in premiums of $5,000’”. Politifact. Link. Jacobson. Link. Jacobson. Link. Abelson, Reed; Sanger-Katz, Margot (8-19-16). “Obamacare Options? In Many Parts of Country, Only One Insurer Will Remain”. The New York Times. Link. Sommer, Jeff. (3-18-17). “Gripes About Obamacare Aside, Health Insurers Are in a Profit Spiral”. The New York Times. Link. Sommer. Link. Thorpe, Kenneth E. (Aug 2005). “Impacts of Health Care Reform: Projections of Costs and Savings”. National Coalition on Health Care. Link. Thorpe. Link. Bryan, Bob (3-7-17). “TRUMP: ‘Phase 2 & 3’ of ‘wonderful’ healthcare overhaul will come soon”. Business Insider. Link. AARP (3-7-17). “AARP Opposes Health Care Bill”. Link. Heritage Action (3-23-17). ““NO” ON AMERICAN HEALTH CARE ACT (H.R. 1628)”. Link. Nussbaum, Matthew; Haberkorn, Jennifer (3-8-17). “White House: Don’t call it Trumpcare”. Politico. Link. Fingerhut, Hannah (2-23-17). “Support for 2010 health care law reaches new high”. Pew Research. Link.
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