Obamacare: A Diagnostic After 6 Years
When people talk about an “American Healthcare Crisis”, they’re usually referring to health care costs that have gone through the roof, making up an entire 17.5% of GDP. Realizing this problem, everyone has proposed solutions to cut costs. Some conservatives have suggested increasing competition between health insurance companies to drive down prices, while some liberals have claimed that greater governmental oversight would protect Americans from for-profit hospitals. In the end, we got Obamacare. Were the liberals right in implementing this program? Obamacare has been around for 6 years; what does it have to show for itself?
But first, what exactly is in the dense text of the Affordable Care Act(ACA)? Like the name suggests, the ACA aims to make medical costs lower, especially for the middle and lower classes. It does not, however, actually provide any health insurance. Rather, Obamacare is the legislation that regulates the companies that provide insurance plans.
The Affordable Care Act mandates that no discrimination is to take place, and not just discrimination against certain genders or ethnicities. People with conditions that require constant medical care—such as heart conditions or cancer—, that cost insurance companies lots of money can’t be denied service or “accidentally” dropped from their current plans. Furthermore, there is a list of “essential health benefits” that all plans must provide. Consumers aren’t the only ones that will benefit either; businesses also get some neat bonuses. While larger companies with at least 50 full-time workers are now required to provide minimum health coverage, smaller, family-owned stores can receive tax credits for doing the same. Furthermore, all American citizens are required to have health coverage(except those on Medicare), meaning more people will be buying plans from insurance companies.
Obamacare also created something called the “Marketplace”, an Ebay equivalent for qualifying coverage plans. This section seems to be a win-win: companies can directly sell their coverage to customers, and customers benefit from competition between these companies through lower monthly premiums. Furthermore, financial assistance is available, giving those tight on money cheaper or free insurance.
The most interesting part of the Marketplace is that it offers specialized plans: bronze, silver, gold, and platinum, offering 60%, 70%, 80%, and 90% coverage(the amount insurance will pay for most costs). Logically, the riskier bronze plan is cheapest, while the low-risk platinum plan is the most expensive. By offering flexibility, healthy 30-year olds can save money with a bronze plan, while those with recurring health conditions can do the same with a platinum.
In theory, Obamacare hits two birds with one bill: it cuts down on the amount(or at least slows the growth) of money being spent on healthcare while keeping health insurance companies profitable. However, it hasn’t totally delivered on its promises.
The first problem is with the “essential health benefits.” These benefits are very comprehensive, and not everyone(or even many) needs all of them. This means that, like cable bundle deals, a large portion of people buying insurance have actually had their plans become more expensive.
The second problem is with the actual results. While medical expenses have indeed begun to grow more slowly, this may not be because of the ACA, but rather the economic recession and a few other factors.
The third and most alarming problem lies in the Marketplace. Competition is a beautiful mechanism: the more producers there are offering the(essentially) same product, the more they are forced to lower costs in order to appear attractive to consumers. Marketplace uses this mechanism to serve the middle and lower classes, but there is a huge flaw: In the absence of competition, health insurance plans can become far more expensive, which would cost the government billions, as they would have to provide to those who can not afford coverage. This flaw will become apparent next year, as some health coverage providers leave Marketplace, giving leveraging power to the rest.
So, what should America do? One seemingly effective method is universal health care, where citizens would all pay and get coverage from one organization: the government. In this case, the actual health care would likely be administered through private companies, making the system look a lot like the current Medicare. Although Americans have traditionally been opposed to increased taxation, which is the only way to effectively fund and implement this system, creating a single-payer system that wouldn’t force a tax increase, as has happened in European countries like Britain. Instead, we could rearrange the budget to put more money towards universal health care and saving money by not using government-funded hospitals.
Overall, while Obamacare directly addresses the health care crisis, it still needs some work. The Marketplace is flexible, but without enough competition keeping plans relatively cheap, the less financially-secure, the main beneficiaries of the ACA, will suffer the most. With the conservatives fighting large government programs and increased taxation, a universal health care system will undoubtedly be difficult to implement. However, if Americans can overcome their fears and biases, they could find their pockets fatter in a matter of years.