The Affordable Care Act begins
What matters in the new health law, and why you should care about it
by Matson Boyd
This sunlit August, many Olympians will open their mailboxes and find checks from their health insurance companies. No, the companies haven’t decided to repent for their sins. Instead the Affordable Care Act, a.k.a. Obamacare, mandates that health insurance companies send us a refund if they spend more than 15% of premium dollars on profits and administration. Also this August, those who need contraceptives, or screenings for domestic abuse or HPV, will suddenly find these services fully covered. These are only a few of the dozens of reforms included in the new health law that are gradually coming into force.
As a writer, I wish I had the pleasure to announce the implementation of single-payer universal health care. But this law is a major step forward out of the painful state of health care in America, and deserves the defense of good progressive activists. To understand the huge impact of this law, imagine how many lives damaged by the old system would have been better off under the current law. I think of the experience of my mother, Joann. Her experience is far from unusual: my mother works multiple low-wage jobs, often upwards of 60 hours a week, mostly in order to pay for exorbitant health costs that total about $10,000 a year. Her health problems are largely work-related, such as arthritis from occupational repetitive strain. She doesn’t feel that she has a way out of this crippling problem and there are millions of people across the country stuck in a very similar trap.
The new health law would subsidize her coverage by about 80%, in other words, giving my mother $8,000 a year to pay towards her health costs. Had this law been in place before, my mother would never have had to work so much and in all likelihood wouldn’t have developed so many health problems in the first place. She would have had a substantial improvement to her net worth and to her quality of life. She would have known all along that whatever happens to her, she will have her health taken care of. Across the country, tens of millions of people like her struggle to retain overpriced insurance. Under the new health law, subsidies will cover most of the cost of care for those who can’t afford it. The subsidies are on a sliding scale, covering almost everything for a 62 year old who earns $16000 a year, and covering about half for someone of the same age who earns $44,000 a year. To see how the subsidies affect you and those you love, google health subsidy calculator.
I am one of more than 50 million Americans without health insurance. Starting in 2014, most of us will get coverage, either through subsidized coverage or expanded access to Medicaid. If you don’t understand how life changing this can be, talk to some people who have lived decades without insurance. You won’t have to ask many before you start to hear stories about those who suffered in dire pain, or who lost their jobs from debilitating injury, or who developed terrible illnesses and cancers that could easily have been avoided if they had access to preventative care. The Urban Institute estimates that more than 20,000 die each year due to lack of health insurance, and that this law will save about 150,000 lives over a 10 year period. In Oregon, where access to subsidized care had been doled out by lottery, researchers found that those who received subsidized coverage had better finances, better health, and better emotional well-being than those who didn’t win access.
The fight for better health care isn’t over. For starters, this law only creates a sort of universal health care: it leaves out the millions of undocumented Americans, many of whom will continue to suffer in silence. Until our circle of compassion is extended to the undocumented, American health care will remain partial.
Another troublesome part of the law is the mandate. Because the bill bans discrimination against pre-existing conditions and limits price discrimination, it also must mandate that people have coverage. Washington State was among several states that banned such discrimination in the 1990’s, without including a mandate, only to see the market for insurance disappear. People waited until they were sick to buy insurance, and insurance companies gradually stopped offering coverage. The lesson that policymakers took from this is that a mandate was necessary, and in 2016 there will be a tax penalty for not having insurance: $695 for an individual or 2.5% of income, whichever is greater. Fortunately the subsidy is greater than the penalty, and there is an exemption for financial hardship. And if you don’t pay the penalty, the only potential consequence will be confiscation of tax returns. Unfortunately Congress didn’t consider simply ditching the private insurance system altogether and adopting a single-payer system.
The public option, on the other hand, almost became law. Conservatives correctly called the public option a “Trojan-horse for single-payer” (because most people would have ditched private insurance if a public option was available, and thus destroyed private insurance). The public option was in various versions of the bill as it was being discussed in Congress, and was only discarded at the last minute at the insistence of a few centrists. Left-wing activists were enraged, to the point of wanting the whole bill killed. It is unfortunate that we didn’t get a public option in the health bill, and it is still more unfortunate that the whole issue has largely been forgotten by activists and politicians. Despite the immense popularity of the public option, most activists no longer fight for it and most politicians, even those running for nominations in very left-wing districts, are not being pushed to support it.
Despite these shortcomings, I believe that the truest progressive complaint against the law is that it doesn’t start soon enough. Any law which can claim to save 20,000 lives a year should be implemented right away. But Democrats in Congress instead opted to phase in the coverage expansion in 2014. The story of why they did so is infuriating. The Congressional Budget Office (CBO) scores bills to determine their budget impact over a 10 year window. A money-saving score is a crucial blessing to those stuck within the myopic world of Congress. The Affordable Care Act saves money over the long term, but over the first 10 years it would have shown a deficit if coverage was available right away. So to make the CBO score look better, Congress delayed the onset of expanded coverage to 2014, even though its true impact on the long term budget is negligible and its impact on real human lives over the interim is huge. Did I mention this bill saves 20,000 lives a year?
There are many other aspects of the bill that are rarely discussed in the media. By 2014 most of the 50 million plus uninsured will either have Medicaid or subsidized coverage. Of Washington’s 1.1 million uninsured, 328,000 will receive access to Medicaid and an additional 477,000 are projected to receive subsidized coverage. Each state will have set up a website known as a health care exchange where insurance can be compared and purchased. Previously, one had to search company by company and settle on one with the hope that you weren’t being ripped off—perhaps only to find out when you really needed care that what you bought was inadequate if not fraudulent. Now all the plans are in one place and there are watchdogs guarding the sites with the authority to throw insurers off if they are dishonest.
There are a myriad of new regulations as well. Cancer patients will be thrilled to know that there can be no lifetime or annual caps on how much health care insurers pay for; however much it costs it must be covered and there is no discrimination against those with pre-existing conditions. Seniors will receive fuller drug coverage, and young adults under the age of 27 can stay on their parents’ health plans. And the mentally ill among us, as well as those with substance-abuse disorders, now by law must have access to the same coverage as everyone else. There are also dozens of screenings, tests, and treatments that must be covered by insurance.
The way the health care business works is also addressed by the health care law: profits and administration are capped at 15% in the large group market and 20% in the small-group market. The amount for companies is typically more than that, and now they have to refund us a check if they go over that mark, with more than a billion dollars in refunds now being sent out. Providers are also being pushed to adopt electronic medical health records, and coordinated care networks of doctors and nurses are gradually being introduced to reduce the tremendous inefficiencies of our current disjointed system. And regulators now finally have the authority to penalize fraudulent drug makers and equipment makers, as well as to cut off payment for obviously wasteful care. (This was the laughable origin of the “death panel” meme.) And finally, in what has to be the most powerful act by any Socialist in the history of the United States Congress, Senator Bernie Sanders forced into the bill a provision calling for community health centers: now hundreds of community health centers are being built all around the country to provide care to all regardless of ability to pay. *(These provisions I mention are only a fraction of the total. Healthcare.gov has a helpful timeline but the only fully exhaustive list is the 3000-page bill itself).
Will the bill survive?
It would be careless to discuss the health care law at length without mentioning the possibility that the bill won’t survive to its full implementation in 2014. The bill almost died this spring. John Roberts was prepared to kill it, along with 4 other Republican appointed Supreme Court justices. As the highest ranking justice, Roberts had the choice of who would write the majority opinion striking down the law, and he chose to write it himself. Jan Crawford of CBS reported that it was only weeks later, for reasons that are not yet known to the public, that Roberts changed his mind. The law survived on a 5-4 vote and Roberts wrote the majority opinion along with the liberal justices to save the law.
While the law survived the courts, Republicans can still kill it—and likely will—if they win Congress and the Presidency in the November elections. The law can be easily overturned because it isn’t popular with the general public. But this is only because most people don’t know what’s in the bill—the only provision most people are familiar with is the mandate. Every other provision is very popular and people like the bill when they learn what’s in it.
I’m writing this because I want people to understand that building a better health care system starts with defending the good provisions in the law that is currently being implemented. Single-payer remains a better alternative, but we won’t get closer to single-payer if Republicans succeed in turning back the clock on health care reform. There are many ways alternatives can develop within current law. It is still possible that a nationwide alternative to private insurance (similar to the public option) can be created without the need for legislation. Millions of people clamor for such an alternative, and if enough of them band together to form a non-profit insurer, they could have the bargaining power to keep prices low. This alternative could gradually eliminate the for-profit insurance sector. Single-payer enthusiasts should also be encouraged that the subsidies and Medicaid expansion put most of our total health costs on the government’s books. This means that those who are genuinely concerned with reducing the deficit will look more and more at the single-payer alternative, because single-payer is the most cost-effective way at providing health coverage.
I have always been shocked by the dog-eat-dog nature of America. My family emigrated to the U.S. from Canada more than ten years ago, and the feeling that has always struck me is how easy it is to fall through the cracks here, and be swallowed up by the cutthroat maw of for-profit America. My mother’s struggle is what impresses this feeling on me the most. But what encourages me and gives me hope is that the primary difference between the welfare states of the United States and Canada has just been erased: no one in Canada has to work an extra twenty hours a week to afford basic health coverage, and now the Affordable Care Act means no one in the United States will either. The fight for a better health care system isn’t over, but let’s at least understand what we just won.
Matson Boyd is a long-time Evergreen student who is still trying to get into economics graduate school. He can be reached at email@example.com