Since the first open enrolment period to register under the Affordable Care Act (ACA) has now expired this is a good time to look back and reflect on the state of health care before the Act and to see what changes were made by the new law.
Before the ACA
Before 2010, health care was a system of competing private insurers which failed to control costs and provide access to quality care for the American people.
45 million Americans did not have health coverage and 76% of them said it was because they could not afford it.
Those who had individual plans found them to be more expensive and with less coverage than those available through employers.
But those with employer insurance were not without their fears as expressed by the saying “I’m just a pink slip away from being uninsured and one sickness away from bankruptcy or even death”.
We can remember the horror stories of the insurance companies’ abuses such as refusing to pay for treatments that people with plans needed, driving away longtime policyholders, refusing coverage because of pre-existing conditions and charging higher premiums for women than men.
The consequence was that 45,000 people died yearly because of lack of health coverage. Of these one person died every 12 minutes. Contributing to this was the eroding medical safety net for the disadvantaged while better quality of care was afforded those who could afford it (Harvard gazette – New study finds 45,000 deaths annually linked to lack of health coverage, by David Cecere, September 17, 2009).
These deaths exceeded those caused by many common killers such as kidney disease.
Added to these grim figures was the fact that medical bills was the number one cause of personal bankruptcies and America spent more than twice as much per capita on health care than other developed countries and did not provide superior care.
The Affordable Care Act
When President Obama became President in 2008 he set about reforming the system and gave us the ACA.
Under the Act you are no longer dependent your job in order to have health insurance. It requires insurance companies to sell you a policy regardless of your health and they can’t cancel it or raise it because you get sick.
The Act contains provisions to provide easier access to ACA coverage.
For example, you may qualify for a subsidy that reduces the policy’s expense. Subsidies in the form of tax credits are available to people with adjusted gross incomes within certain limits and there are 4 groups of plans to suit different income levels.
If you do not qualify for a subsidy there is a ceiling on what the insurance companies can charge; for example if you are over 60 you pay a maximum of three times more for similar coverage than people in their 20’s.
To prevent free loading (taking the benefits without contributing to the costs) you are required to have coverage or else pay a penalty.
All in all Americans have more peace of mind and are better off today because nearly 6 in 10 Americans can get coverage for $100 a month or less, insurance companies must cover essential benefits and must publicly justify rate increases of 10% or more.
The problem with the ACA is that it retains the private insurance industry and leaves prescription drugs to the vagaries of the free market without any competition from the government.
A better option would have been to adopt the single payer system in which the government pays all the medical bills for everybody. We already have the basis of such a system; it’s called Medicare.
ACA vs Medicare
President Obama deserves much credit for trying to fix the health care problem and for giving us the ACA. 7.1 million people now have health insurance which they did not have before and added to that are another 2 or 3 million who joined their parents’ plans.
However the profit motive still exists. Premiums went up under the ACA to accommodate profits for insurers and the government gives premium subsidies to offset the increase. A more cost effective way to do it would have been to eliminate the element of profit and prevent the profit-taking middle man (insurer) from getting between the patient and the provider.
The point here is that universal health care at low prices is incompatible with the policy of maximizing profits which is the aim of private insurance.
Instead of building the ACA on top of a failing private system Medicare should have been extended to include everybody and coverage increased from 80% to 100% of costs.
It would work for everybody since it has worked for seniors for nearly 50 years and is projected to be solvent through 2024 (based on present expenditures and income).
Medicare for all would also have avoided the inept roll out of the new law and the contentious issue of employer and individual mandates which only helped to make the ACA less popular.
According to Dr. Johnathon Ross of the Physicians for a National Health Program, it would have saved $400 billion a year, covered all the uninsured, eliminated co-pays and deductibles, allowed complete choice of provider and improved coverage for all. For example in 1995 Taiwan replaced private insurance with one based on Medicare and coverage went up from 60% to 100% with no growth in costs.
The ACA cannot do these things. The Institute of Medicine (IOM) report of 2004 entitled “Insuring America’s Health” noted that individual and employer mandates with premium subsidies (the ACA) cannot provide universality, continuity, affordability and access to equitable care but Medicare for all would (Physicians for a National Health Program- Will the ACA achieve universal equitable coverage? by Johnathon S. Ross, winter 2013).
Lastly, Medicare for all could co-exist with the private sector such as in Canada, France and Australia where private providers practice independently for patients that can afford to pay.
Perhaps in recognition of the IOM report the ACA will allow states to experiment with other types of reforms including Medicare for all in 2017. Vermont has already implemented this with the help of a waiver and there are 22 other states considering it. Maybe when it works in Vermont other states will follow.
Victor A. Dixon
April 5, 2014