Straight talk on Obamacare | Jonathan Weiler | Indy Week
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What will—and won't—happen under health care reform.

Straight talk on Obamacare 

The Supreme Court's landmark decision to uphold most of the Patient Protection and Affordable Care Act (ACA) opens a new phase in the political battle over health care in America.

The ACA is imperfect. It represents an ungainly and in some respects unseemly compromise with powerful interests, including the private health insurance industry and Big Pharma. Even when the ACA is in full force, it won't cover all Americans.

Much remains uncertain about the law, including the fate in some states of the health insurance exchanges, where individual Americans will shop for insurance, slated to go live in 2014. Opportunities for mischief-making by recalcitrant Republican governors have been amplified by the Supreme Court's ruling that states can opt out of the ACA's intended expansion of Medicaid.

If Mitt Romney is elected president in November, he could not unilaterally repeal the law. But he could cripple its implementation. That uncertainty is compounded by the rampant misinformation being spread about the ACA. Below are several points worthy of elaboration:

Public opinion strongly favors most of the key features of the ACA, with one very notable exception, about which more in detailed below.

Polling shows that Americans overwhelmingly support most key features of the law, including the ACA's legal requirement prohibiting insurance companies from denying coverage because of pre-existing conditions or from dropping people from policies who get sick.

Most Americans also support subsidies provided under the ACA to help lower-income Americans buy insurance and tax credits for small businesses that offer health insurance to their employees. Other popular provisions include the gradual closing of the notorious doughnut hole in prescription drug coverage for seniors; the increased Medicare taxes on upper-income Americans the law imposes to help fund the bill; and the new rule that allows parents to keep their children covered until age 26.

The ACA won't affect most Americans' coverage.

When ACA is fully implemented a decade from now, the Congressional Budget Office (CBO) estimates that 30 million or so Americans will have health insurance who otherwise would not. Most Americans are and will continue to receive insurance through Medicare, the to-be-expanded Medicaid program or their jobs.

But millions of Americans either purchase health insurance in the individual market or don't have it at all. Enter the exchanges and the individual mandate, the most controversial and least popular part of the law. The idea behind the mandate is that everyone, whether they have health insurance or not, requires health care at some point and therefore is a cost to the health care system. So it is reasonable to expect everyone who can pay something toward supporting that system should do so.

The logic follows that since insurance companies are required to cover everyone, their business model would soon become unsustainable if their only customers were older and sicker. Insurers, in other words, depend upon the premiums of healthy individuals to offset the costs of covering unhealthy ones, hence the mandate that all people either buy insurance or pay a fine for refusing to do so.

Individuals not otherwise covered who earn up to 400 percent of the federal poverty level will receive subsidies to buy insurance in the state-based exchanges. Through these exchanges, people can shop for different policies that vary in their levels of coverage but that legally would be required to provide basic benefits. Those who are deemed able to afford coverage but choose not to buy it will be assessed a fine—either $695 or 2.5 percent of one's annual income, whichever is greater—as of 2016.

The CBO estimates that roughly 4 million people will pay the fine, though others believe the numbers will be lower. Since the GOP has collectively conceived of Obamacare as a nightmarish imposition of a socialist dystopia, it's worth noting that enforcement for this most notorious part of the legislation appears pretty weak. The law specifically bars any criminal sanctions, property liens or garnishing of wages to punish noncompliance. In fact, the only real way to collect on the fine is to withhold a portion of an individual's tax refund, assuming that an individual who has no insurance is due a refund. Stalinist repression this ain't. It's more like the pathetic-friend library fine of Seinfeld fame.

Perhaps the single most significant feature of the ACA is its substantial expansion of Medicaid, now jeopardized in part by the Supreme Court's ruling.

Medicaid is a hodgepodge of state programs that receive varying amounts of federal funding in exchange for covering low-income Americans. The income limits and nature of coverage vary widely by state. Under the ACA's Medicaid expansion, all states would make coverage available to legal residents who earn up to roughly 133 percent of the federal poverty line; this would cover at least an additional 16 million Americans. In exchange, the federal government will absorb all the costs of the expansion before transitioning to 90 percent coverage in a decade.

This is a higher rate than Medicaid currently provides and represents a massive new commitment to ensure coverage of low-income Americans. While most states will certainly opt for the new funding, the Supreme Court ruling allowing states to reject this expansion imperils a significant number of low-income Americans who were slated to receive coverage. In Texas, for instance, 2 million people who might otherwise have been eligible may lose out on coverage if state leaders reject ACA Medicaid funds.

The kind of cruel and gratuitous suffering has been on display in Pennsylvania, where right-wing governor Tom Corbett has imposed needless new requirements on individuals receiving Medicaid. The subsequent bureaucratic backlog has led to dropped coverage for 89,000 children in that state, including some with life-threatening illnesses.

As recently as five years ago, professed support for the goal of universal coverage was arguably bipartisan, even as the parties differed about how to achieve that goal. In 2012, however, Republican leaders have expressed increasing indifference to, if not outright scorn for, the uninsured. They've universally vilified a health care reform package that, in many of its essential features, was originally conceived by a conservative think tank and signed into law in Massachusetts a few years ago by their current presidential nominee. Romney now vows to kill the ACA and endorses a "plan" that would almost certainly result in fewer, not more Americans, receiving coverage.

The political commentator Paul Waldman has noted that even "after its full implementation we will still have the least socialized health-care system of any advanced country in the world ... and Republicans reacted as though all private property were confiscated and we were herded onto collective farms."

There is tremendous work to be done to implement the existing features of the ACA and to continue the political battles necessary to ensure a more just and universal system than the one envisioned by Obamacare. And one can expect no help from Republicans in either endeavor, committed as they presently are to an ever more punitive and penurious vision for the sick if they can't afford minimally decent health care.

  • What will—and won't—happen under health care reform.

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