Healthcare gets personal. At its core, it kicks in when we’re down. (Maybe it’s just me, but I’m horribly behind on my preventive health care appointments. I know, Mom, I’m sorry.)
Through my mid-twenties, I was lucky and didn’t need to think much about healthcare or health insurance. When I turned 25, I tore my peroneal tendon in my foot. Without a correct diagnosis, I went through a year of my life in pretty much chronic pain. After trying what seemed to be everything else, I underwent surgery to have it repaired. Following the surgery, I ended up getting a blood clot from immobilization. This resulted in two emergency room visits, being on blood thinners, and visiting an oncologist weekly for 6 months to have my blood monitored. Luckily, I had insurance through my employer, but it didn’t stop me from having to pay thousands out of pocket. It also didn’t stop me from having to call the insurance company over 20 times to sort out bills.
About a year later, my dad had a heart attack and had to undergo heart surgery. He made it through the surgery but then developed the rare Guillain-Barre syndrome, an autoimmune disorder in which the immune system attacks healthy nerve cells in your peripheral nervous system. This leads to weakness, numbness, and tingling. It can eventually cause paralysis. The recovery from both was an uphill battle several years long. Again, my parents had insurance, but there also came a point where they were required to pay partially out of pocket.
Shortly after that, my husband and I watched as his mother fought a losing battle with early onset Alzheimer’s Disease. We were lucky that there were financial resources to help pay for her care and to help her be comfortable in a good facility. For many families, that’s not the case. And, with the Baby Boomer generation becoming older, the Alzheimer’s Association anticipates that by 2050, the number of people living with Alzheimer’s will increase from 5 million to 16 million and could cost the nation $1.1 trillion annually.
We’re human, our mortality only becoming more clear with age. My family’s stories are no different than many others. Friends and acquaintances have similar ones. A parent gets breast cancer. A friend gets a rare disease. We’re called to give on platforms like GoFundMe because the costs for treatment for many Americans are just too high. We weigh the treatment options based largely on cost. Now, the US spends more on healthcare than any other developed country but with poorer results, shortening the quality and length of our lives. In short, healthcare is no longer something we can ignore.
Obamacare (the Patient Protection & Affordable Care Act (ACA)) was passed in 2010 after a huge health care debate in Congress. It came into full effect in 2014 after a gradual rollout. (Some believe not gradually enough.) The huge Act includes a lot. So let’s recap the main parts:
- The ACA requires people to be covered individually, through an employer-sponsored plan, Medicaid, Medicare, or another public program. While some were exempt for financial or religious reasons, those that were not covered were required to pay a penalty. Fines were $325, or 2% of income, for 2015.
- Insurers have to provide a minimum standard of coverage and cannot deny coverage based on pre-existing conditions. Government-run marketplaces aka exchanges have been set up of for people to shop for plans with particular periods for enrollment.
- Subsidies (tax credits) are given on a sliding income scale to help people purchase insurance plans. Additional tax credits are given to some to help with out-of-pocket costs.
- Medicaid eligibility was expanded to lower-income families (those earning less than $16,243 for an individual and $33,465 for a family of four in 2015), with states gradually paying a larger portion (up to 10%) by 2020.
- The Supreme Court ruled that the states could individually decide whether they wanted to opt in. As a result, 19 states voted to not expand Medicaid eligibility, the majority Republican-led, largely due to the implicit increased funding requirements for states trying to budget already constrained budgets.
- Dependents could remain on their parents’ insurance plan until they turned 26, including dependents that no longer live with their parents, are not a dependent on a parent’s tax return, are no longer a student, or are married.
- Businesses with 50+ people that don’t offer health insurance to their full-time employees pay a tax penalty if the government has subsidized a full-time employee’s healthcare through tax deductions or other means. An exchange was also offered for businesses with more than 50+ employees.
Here have been some of the largest reported impacts of Obamacare.
- An additional 24 million people insured under the ACA (there are some debates regarding this number but most agree around this.)
- States that expanded Medicaid saw much larger declines in their uninsured rates compared with those that didn’t.
- Lower rate of increasing health care costs for 2015. (The growth rate of health care services prices has slowed dramatically, from around 4 percent per year in 2004 to a low of about 0.5 percent in 2015.)
- Entrepreneurs without health insurance from work or a partner have benefited from the ACA’s guarantee of coverage to those with pre-existing conditions and effort to improve the quality and price of plans on the individual market.
- One provision in the law mandates that health insurance provide a minimum level of care including “additional preventive care and screenings” for women. This remains under the new proposed reform.
Here have been the main gripes:
- Several insurance companies exited the market in some states, in many cases because they didn’t meet the minimum requirements, leaving consumers fewer choices at higher premiums.
- People argue that the government shouldn’t force people to purchase insurance or penalize them otherwise. Subsidies were also based on consumer’s estimates of income, causing in some cases, incorrect reporting and requiring repayments at tax time.
- The expansion of Medicaid is a whole other topic, but many feel that the subsidies provided by the government only increase dependency while also increase federal and state deficits. In many cases, states argue they can’t maintain the additional costs long term.
- Businesses have complained this has put an additional cost burden on them, especially those with less than 50 employees who were not able to access to the exchange.
Enter Trump and the GOP in 2017 with their new plan: the American Health Care Act (Trumpcare as some have dubbed it). Again, complex and one we’ve yet to see the final version, but here are the major areas proposed:
- Subsidies (tax credits) to purchase insurance would now be determined by age instead of income. Tax credits would be available in full to individuals earning less than $75,000 and households earning less than $150,000, but they would be capped for higher earners.
- The subsidy would be $2,000 for a person under 30, and double that for people over 60. (At the same time, the plan allows insurers to charge five times more for older folks in comparison to three times more beforehand, so they will also have higher premiums.) The bill would also expand the health plans that qualify for subsidies.
- Phase out of Medicaid expansion: allows states to keep Medicaid expansion until 2020. Funding for those eligible starting in 2020 or who left the program and came back, however, would be reduced. The bill also proposes capping federal funding per enrollee.
- Introduces “Continuous coverage incentive” to charge individuals who had a gap in coverage of longer than two months a 30% penalty in premium costs for up to a year. (Mind you, that’d probably be when you need it the most.)
- Employer mandates eliminated.
- Out of pocket cost-share eliminated in 2020.
- Would allow people to put substantially more money into their health savings accounts and let spouses make additional contributions.
- Allows insurers to charge older customers five times as much as younger ones and give states the option to set their own ratio.
Among the expected results, there would be estimated savings to the government (reducing the deficit). This is largely from a reduction in Medicaid and subsidies that were provided for low-income Americans to buy insurance. Premiums would be lower for younger adults and much higher for seniors, especially at first, but may decrease over time.
The Kaiser Family Foundation played out a few scenarios and found that those who are older, lower-income, or live in high-premium areas would get fewer tax credits under the replacement in comparison to those who are younger, higher-income, or live in low-premium areas. Urban Institute’s Health Policy Center and the Urban-Brookings Tax Policy Center did a recent study (findings here) and found that most of the benefits accumulate to higher-income households.
Finally, a nonpartisan report from the CBO estimated that an additional 14 million people would be uninsured in the next year and an additional 24 million by 2026. This is largely a result of the removal the incentives and penalties to both individuals and businesses of not being insured and the reversal of Medicaid expansion. Some Republicans have disputed the report’s findings, saying that it does not include other legislation that would drive down costs. However, I like what Senator Lindsey Graham said, “Let’s say the CBO is half right — that should be cause for concern.”
We just heard that this version didn’t have the votes needed. Some want even more cuts. We await version 2.0.
In the meantime, here are the main questions I’m left grappling with as we better understand this issue and its impacts:
- Do you think the government has a responsibility to provide healthcare for its citizens, or should citizens be responsible for it on their own?
- If so, do you think this should this happen at a state or federal level? Why?
- What about businesses for their employees?
- While the Supreme Court has already ruled, do you think States should be able to deny Medicaid expansion to their residents while residents in other States have access?
- If so, what effect does this have on rising healthcare costs for all of us?
- Do you think the government should be able to require individuals to buy health insurance and penalize them when they don’t?
- On the other hand, does a healthcare system work without incentives and carrots in place? In other words, can we just expect people to “do the right thing and buy insurance” before they get really sick?
- What do we know about what is actually driving up premiums? Is it a lack of supply of insurance? The rising cost of healthcare? The minimum requirement of plans? Those that are uninsured? All of the above?
- How have you been affected by ACA, good or bad? Do you support the replacement? Why?
Some other good reads:
https://www.nytimes.com/interactive/2016/10/31/upshot/up-uninsured-2016.html
https://www.wsj.com/articles/u-s-health-care-highest-costs-not-highest-results-1485369534
https://www.usnews.com/news/the-report/articles/2015/12/04/opposing-medicaid-expansion
https://www.nytimes.com/interactive/2017/03/12/us/politics/republican-health-plan-impact.html?_r=0
http://www.businessinsider.com/ahca-obamacare-replacement-winners-and-losers-tax-credits-2017-3
http://www.economist.com/blogs/economist-explains/2017/03/economist-explains-7
https://www.nytimes.com/interactive/2016/10/31/upshot/up-uninsured-2016.html
https://www.thebalance.com/obamacare-pros-and-cons-3306059
