Any program as large and complex as Obamacare is going to encounter some turbulence on its shakedown cruise. But the recent glitches are as important for what they tell us about reform, as for what they do.
Obamacare (more formally, the Patient Protection and Affordable Care Act) will cover millions of currently uninsured Americans as advertised — but with as little disruption to corporate profits as possible. Patients and taxpayers are to shoulder most of the additional cost.
The administration will delay for one year — until 2015—the requirement that large employers offer their employees decent insurance, or pay a small penalty. There was no corresponding delay of the individual mandate, the requirement that all citizens sign up for insurance coverage starting in 2014, the most unpopular provision of ACA. This means that next year employees of the recalcitrant firms will have to buy health insurance without any contribution from their employers.
The Congressional Budget Office estimates this delay could affect up to a million people. If families cannot afford the insurance offered on the new exchanges, and fall below 400 percent of the poverty line, taxpayers will pick up part of the tab. The Kaiser Foundation calculates that about half the uninsured will qualify for Federal subsidies.
Congressional Republicans (and some Democrats) passed a bill to delay the individual mandate also. However, no one in Washington really wants that; it would hurt the insurance companies, who are adamant that young, healthy individuals be required to enroll so as to cover the costs of the sick, who will sign up right away.
The administration also quietly postponed for a year ACA annual and lifetime limits on out-of-pocket costs in some employer-sponsored plans. This delay will fall hardest on the sickest — patients with diseases like cancer [or] multiple sclerosis… where the costs of drugs alone can easily exceed $100,000 a year.
Democrats winced and largely remained silent. Republicans chortled, passed another symbolic bill, and continue to obstruct the ACA wherever they can.
Business contended — and the administration apparently agreed — that these two provisions were too complicated to implement on time. However, these are large corporations that deal with complex matters all the time — and they had three years to plan. By contrast, figuring out the new exchanges, benefit packages and tax subsidies will be at least as difficult for individuals, who get just three months to plan; most exchanges will not be up until October, and people must enroll by January.
Is there something wrong with this picture?
Don’t misunderstand: extending health insurance coverage to millions of uninsured and underinsured Americans is an unequivocal good, and a substantial step forward.
However, the U.S. pays the highest prices in the world for health insurance and health care. Despite its name, the Affordable Care Act extends this extravagantly expensive system to the uninsured with little attention to reducing or spreading the cost, just a hope that the invisible hand of the market will somehow do the heavy lifting. The law puts minimal burdens on corporations, who are sitting on record profits, even though wages, out of which families must pay the new premiums, continue to stagnate.
Politicians tell us that this market-driven system, heavily reliant on consumer payments and subsidies, is the only one that Americans today will accept. Maybe.
Yet keep in mind that the U.S. is the outlier here. In one way or another, all the other advanced Western democracies regulate insurers, hospitals, doctors and manufacturers to ensure that all their citizens receive the health care they need, with modest profits to providers.
Indeed, we have such “socialized” health insurance already, hiding in plain sight: Medicare, the most popular program in the country after Social Security. Medicare covers all services that are medically necessary, at lower cost, and with far less complexity, than private health insurance. People pay according to their income. Employers are required to contribute for all employees, including part-timers. There are no restrictions on patients’ choice of hospital or doctor. We could easily finance the extension of Medicare with the money that goes for private premiums now.
For the sake of millions of uninsured citizens, I hope the rollout of the peculiarly American ACA is successful. But if it turns out to be too complex or too expensive, voters have a cheaper, simpler, fairer alternative. Employers, insurers and providers, take heed.
Caroline Poplin is a physician, attorney and policy analyst in Bethesda, Md.