It’s almost hard to remember, but a big part of this election is debating health care reform, the Affordable Care Act.
A recent Rassmusen poll shows why: “Support for repeal is driven in part by the belief of 50 percent of voters that the cost of health care cost will go up as a result of the law. Also, 50 percent believe the law will increase the federal deficit. Hardly anybody believes the law will lead to lower health care costs or reduce the deficit.”
The poll’s conclusion is that 54 percent want the Affordable Care Act repealed.
Health care is a complex subject, yet the debate is remarkably narrow. Most people are not even sure what’s in the law. Or even if that law, by itself, will increase the cost of health care. (I have written extensively about the Indian Health Care Improvement Act; a law that was made permanent under the Affordable Care Act. More about that here and here.)
But what does the broader act do? And will it really drive up costs and be a government takeover of health care?
The Affordable Care Act became law on March 23, 2010. Many of its provisions won’t begin until next year and the year after. Despite what’s said on the campaign trail.
The most important element in the law is that most U.S. citizens will be required to purchase health insurance. The idea is that many younger, healthy people don’t buy insurance making it more expensive for those who need insurance. So by expanding the number of people paying in to insurance pools, it reduces the cost to everyone else.
The Congressional Budget Office estimates that roughly 22 million to 23 million people will buy insurance coverage through the new insurance exchanges and another 16 million to 17 million people will be enrolled in Medicaid and in the Children’s Health Insurance Program.
But the law also recognizes that not everyone can afford insurance. So it greatly expands funding from Medicaid as well as giving income-based tax credits to families making less than 400 percent of federal poverty rates, roughly $44,000 for an individual and $89,000 for a family of four in 2011. Another way the law is supposed to reduce rates is create health insurance exchanges in each state where people can shop for lower cost policies. If someone decides not to get coverage, then the IRS will impose a tax penalty, one that begins in 2014 and goes up annually until 2016 when it will be set at 2.5 percent of taxable income.
The law also requires businesses with more than 50 employees to provide insurance (or in some cases, an option to pay a penalty instead).
The Affordable Care Act largely is built on the current private insurance model (except for Medicaid which is already large), but if a state decides not to create an exchange, the federal government can sanction at least two multi-state plans (and at least one plan must not offer abortion coverage). It also allows on-profit co-ops to compete in state exchanges. The government will soon announce the structure of those two plans.
There’s much more. The law ended a coverage gap, or the “donut” hole problem, for drugs purchased under Medicare. It requires coverage for existing conditions. And adult children may remain on the parents’ policies longer. All in all, the Affordable Care Act, like health care in this country, is complicated. A good 13-page summary was prepared by the Kaiser Family Foundation.
The Affordable Care Act was designed to shape the current system – a private, employer-based system – toward universal coverage. This is very different than say, Europe (or even the Indian Health Service) where coverage is across-the-board, and government-funded.
The law also requires insurance companies to spend most of the premiums collected on health care (instead of administration, marketing, that sort of thing). This year some $1.1 billion is expected to be paid as rebates to insurance customers under this provision.
So will it drive up health care costs? There is no evidence of that. Overall the CBO says the Affordable Care Act over time will reduce the deficit.
And the CBO says that for Americans earning under $74,000 health care costs will go down if your plan is purchased on the exchange instead of being part of your compensation at work. (One reason why people don’t believe this is few actually know what’s spent on their behalf. Insurance is a hidden salary, hard to think about in terms of a family budget.) For Americans earning a bit more, just under a $100,000, the cost will be more, roughly 5 percent more. And for those who earn $124,000 or more the cost of insurance will increase a whopping 41 percent. (This is important because critics say employers will choose to drop coverage and pay penalties instead.)
Complicated, yes? But a government takeover?
“The ‘government’ currently pays about 43 percent to 46 percent of all healthcare costs, mainly through Medicare, Medicaid, and the armed services,” writes Carolyn McClanahan in Forbes. “When Obamacare is fully implemented, it is expected this amount will increase to 49.2 percent. It is a clear increase, but nowhere near a 100 percent government-paid program. The private sector will still be responsible for over half of healthcare spending.” Current government programs – the VA and IHS – will not change.
The U.S. system is complicated and that adds about 30 percent to the cost of health care. “Most countries pay only 5 percent to 10 percent overhead because of the efficiencies of one system. Had our legislators attempted that coup, it would have definitely been a government takeover,” McClanahan concludes.
Will the Affordable Care Act survive the election? Most likely. An outright repeal would require a Romney win, a Republican sweep in the Senate (at least 60 votes) and the current Republican majority in the House. The easiest thing to do in legislation is to kill it. Parts of the law, or funding for the law, might be rolled back. But it’s unlikely that the next Congress will have the votes to repeal ObamaCare.
Mark Trahant is a writer, speaker and Twitter poet. He is a member of the Shoshone-Bannock Tribes and lives in Fort Hall, Idaho. He has been writing about Indian Country for more than three decades. His e-mail is: firstname.lastname@example.org.