I was born, raised and live in the U.K. I am 24 years old. I remember, on the face of things, Obamacare being a step forward for the shenanigans which is the U.S. healthcare system. But, I often see posts stating it failed. Someone please explain 🙂
I hold our NHS in high regard. I cannot imagine a healthcare system which can leave people who have worked, paid taxes for 30 years+ and are all round good citizens in financial ruins. What exactly is Obamacare and why do people say it failed?
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The US has an insurance based healthcare system. You buy private healthcare insurance. One problem with that is that if you have preexisting conditions, no one will insure you. This means that you only get emergency treatment (as ER rooms have to treat you), and when you do you go bankrupt because of the cost, which never really gets covered anyway.
Many Demorats would love to introduce some form of universal healthcare, particularly single payer (ie: the government pays for everyone to get healthcare). Many Republicans hate that idea and strongly oppose it. Obamacare was a compromise, somewhat based a plan put forward by the conservative Heritage Foundation as an alternative to single payer.
It has several main points which are crucial:
– No restrictions on pre-existing conditions. This means that people are both a) able to get coverage even if they have disabilities or chronic illnesses, and b) that when someone gets sick, they have some leverage with their provider.
– Subsidisation for those on low income: This allows everyone to get coverage. A big part of this was medicaid expansion, which is government provided. I think there were other measures as well to make it affordable.
– Universal requirement: Everyone has to get healthcare. This is crucial, as it means that the cost of healthcare is spread over everyone. Otherwise, healthy people don’t get insurance until they get sick, so don’t pay in until they are ill.
– Minimal coverage requirements: This is crucial for the same reason as universal requirement, otherwise healthy people would get cheap useless plans and sick people would have to pay insanely high rates.
However, Republicans did a lot of things to kill it.
– Several Republican states opted out of the medicaid expansion, leaving lots of people struggling to get insurance.
– The Republicans effectively removed the universal requirement by setting the penalty for not getting insurance to $0.
– Ended schemes to subsidise insurance for those on low income.
There’s a lot of other details, but that’s the basic gist.
In America there was a health reform which meant that more healthcare was available to more people which was called the affordable healthcare act, this was very popular with the general public. The republicans saw it as a step towards full government healthcare and tried to undermine it, by pointing out some of the potential flaws and exaggerating it and they called this new system Obamacare since it was introduced by President Obama. The spin has worked since in polling Americans are strongly in favour of the affordable healthcare act, but against Obamacare despite them being the same thing.
It was a set of regulations, that among others, created a national marketplace system for offering/buying health insurance plans, introduced tax credits for those who couldn’t afford insurance so that they may be able to, required everyone to have health insurance if they could afford it (or face a penalty that has now been set to $0/year), and also introduced regulations like the one restricting insurers from denying patients with preexisting health conditions and forced marketplace insurers to cover at least a set of declared essential health services.
One notable problem, at least in my state, is that just about every insurer except Kaiser dropped out of the marketplace exchange, leaving terrible options for those who wanted to purchase insurance using the marketplace tax credits.
A band-aid on the absolutely broken state of health care costs, but a welcome one at it I guess.
Others have already covered the major components of the program, so I’ll focus on the question “why do people say it failed”.
This is kind of loaded question because it depends on your definition of success. In terms of reducing the uninsured rate it was a great success: it got us to a 90% insured rate which is the highest it’s ever been in history. It also established protection for pre-existing conditions and allowed young people to stay on their parents’ plan until age 26 which are both hugely positive accomplishments. I will also add this was the first major change to the US healthcare system after *decades* of attempts, so just the fact that anything got passed is honestly a success.
Now where did it go wrong? For one thing it didn’t really improve healthcare quality; it mostly focused on getting more people covered. For another it didn’t quite go as far as people liked – it got the uninsured rate to historic lows but not to 0%, and it didn’t help to stop the ballooning prices.
Why did it fall short? Largely due to politics. Democrats had to make major concessions just to get something passed. I don’t really think it’s fair to call that a failure because it’s better to make some progress than no progress. One of the concessions was the removal of the public option. That part was critical for driving down cost. Basically the idea is if everyone is required to get insurance, and there’s an affordable government option, then private companies would have to lower their prices in order to stay competitive. It’s really too bad that this part had to get removed, and if we could get it passed it would really go a long way.
Regulations, most of which has nothing to do with healthcare and instead just massive growth of government and bureaucracy, that removed rights and choice, and set a precedent that to be alive means a bureaucracy can force you to buy a service otherwise you’ll be punished, and was supposed to fix all the bad things in healthcare (that were primarily created originally by the same people and ideology saying they’ll solve the problems now)…
And now they continue to say it is bad and they want more power and money.
It was an attempt to get as close as possible to the universal health care system you enjoy in the UK, while operating within the constraints of the existing US health care industry.
The major challenge was that the US health care industry is huge and powerful.
Even if corporate lobbying weren’t a factor, disrupting the careers of tens of millions of healthcare workers would be political suicide. So Obamacare kept the private health care companies and insurance companies intact.
The core of the Obamacare compromise was this: first, everyone was *required* to have health insurance, or they have to pay a penalty. Lower income people would get money for care from the government, which would expand Medicare (our government-funded, privately-delivered health care program). Middle- and high-income people would have to buy insurance from private insurers, at government-negotiated prices, and the insurers wouldn’t be allowed to turn anyone away.
So the hospitals get more paying customers, but have more cost controls on their services. The insurance companies get a guaranteed pool of healthy customers to offset the more expensive ones they’re now required to cover, and everybody gets health care, either from the government or at a (hopefully) fair price out of pocket. Everybody wins, nobody loses their job.
The program fell apart in two ways. First, the plan relied on expanding Medicare to cover people in lower-middle incomes who couldn’t afford private policies, but Medicare is operated by federal grants to individual states, and many Republican states refused to expand coverage. It was hundreds of billions of dollars of free money, and they turned it down in order to sabotage the plan.
Second, the Republicans argued that *requiring every American to buy something* was unconstitutional, but the Supreme Court argued that the penalty for not buying it was a reasonable exercise of the government’s power to tax.
So the Republicans in Congress set the penalty to zero. Now the requirement to buy health care is arguably *not* a tax so the government can’t do it. And if people aren’t required to buy insurance, healthy people will not buy insurance. This means insurance companies will have to charge more to cover the sick people that remain, and eventually *nobody* will be able to afford private insurance. Only way to solve that is to get rid of the requirement to cover everyone…. and now we’re right back where we started.
In the end, I think both sides of American politics now agree that the effort to nationalize health care “by the back door”, without disrupting existing industries, was a failure. It was a clever balancing act, but it turned out to be a house of cards. Most agree that our choices are either some sort of full nationally-funded system, or the status quo.
Oh boy. Strap yourself in British friend, this is going to take a while.
Obamacare was the popular name for an acts passed by the US Congress and signed into law by Obama in 2010, the Patient Protection and Affordable Care Act (often shortened to Affordable Care Act or ACA if you don’t like calling it Obamacare). This did a lot of shit, and most people on either side of the issue don’t know what the hell they’re talking about most of the time, but I’ll try and cover the major highlights.
There were a lot of regulatory changes, such as the FDA being given authority to approve generic drugs, and drug manufacturers being given a 12 year exclusive license on drugs they develop before a generic can be introduced. Restaurants (specifically chains of 20 or more locations) were required to show the calorie content of every item on their menus, although this part was dependent on further regulations by the FDA that I don’t believe ever came to pass, many large chains got ahead of the curve and started doing it anyway. A 10% sales tax was placed on indoor tanning salons. And dozens more.
But the big one, the one that everybody thinks of when they think of the ACA/Obamacare, the insurance changes. I assume that you’re aware that unlike your own and many other countries, the US doesn’t have a universal socialized healthcare system, and we’re not here to argue the pros or cons of our system vs. yours or anybody else’s. Some people look at the ACA as an attempt to create such a system, but that is absolutely incorrect. Instead, it was a combination of regulation over the health insurance industry (banning lifetime or annual limits on spending for hospital stays and other essential benefits, requiring that children be allowed to remain covered by their parents’ insurance until age 26, even if they’re no longer dependents, a prohibition on denying coverage or charging more to insure a person with a pre-existing condition, and many others), along with an expansion of eligibility for Medicaid (something at least conceptually similar to socialized healthcare, but limited to low-income individuals), although states had to opt-in to this expansion and many did not, combined with the creation of healthcare exchanges allowing people to shop around for insurance coverage, which was necessary because it was now (as of 2014), mandatory for all Americans to obtain health insurance, under penalty of something that was absolutely not a tax, because they couldn’t legally do that, but was an additional sum of money collected from you by the IRS at tax time because it was absolutely a tax.
Suffice to say that this came from the right place in the heart, there were a lot of good ideas and many of the regulatory changes were helpful, but it didn’t help with any of the problems it was designed to fix, and is a major contributing factor to the election of Donald Trump, whose platform included dismantling the ACA.
Obamacare has two main issues:
1) Most people get healthcare through their work. For those that don’t it attempted to fix the cost of health insurance to below the market rate This below market rate health insurance was to be sold through exchanges with the Federal government subsidizing some of the cost and health insurers taking a small loss to cover the rest.
There rationale was that health insurance companies would spread the loss they were taking on the personal insurance plans to the plans they offered to large employers. The result of this is that nearly every major company in the US shifted to running their own, self funded plans. Without any way to spread the loss, nearly every health insurance company dropped out of the government program.
2) Prior to Obamacare health insurance had a maximum annual benefit – that is, each year your insurer would pay up to a certain amount of money to cover your healthcare and no more. If your healthcare cost more than that maximum annual benefit then you had to pay for the rest out of pocket. This is a fundamental necessity of any insurance system.
Single payer systems get around maximum annual benefits by having what are called “death panels” in the US. That is, single payer systems limit the total number of high cost treatments that are available at all and per year. For example, most EU health systems will not cover most heart surgeries at all due to their cost. Only a limited number of other high cost surgeries are offered per year and rationed out to those with the best prognosis.
So, for example, if you need brain surgery in most EU systems you get put into a pool of other people who need brain surgery. People with a good prognosis will get a surgery date in the near future. People with a poor prognosis get a surgery date months or even years in the future with the understanding that most will die before surgery and so won’t end up having the surgery (opening a surgery date for someone with a good prognosis).
Obamacare got rid of the maximum annual benefit without imposing a death panel style system. Instead, it changed US health insurance to have a maximum out of pocket – once you’ve paid a certain amount of money each year your insurance is forced to cover 100% of the remainder of your treatment. This has resulted in the following situation becoming quite common:
You’re diagnosed with terminal cancer. There is a treatment that will cost hundreds of thousands of dollars to add 3 months to your life. You’ve already spent your maximum out of pocket getting diagnosed, so that treatment costs you nothing.
Under the old system people had to make a choice – do they bankrupt themselves for an extra few months of life or do they leave some money to their kids. Most people chose to leave the money to their kids. Nowadays there isn’t a choice – everyone takes that treatment.
But *someone* has to pay for that treatment, and that someone is everyone else in the country. This has resulted in such poor prognosis, high cost treatments accounting for the bulk of US medical expenditures and has substantially increased the cost of insurance across the system.
It allows kids to stay on parent’s insurance until they are 26. Even if it did nothing else, I would be eternally grateful. It also forces insurance companies to spent a minimum percentage of premium income on care for insured people (instead of shareholder or other profit)
It’s a giant blow job to the insurance companies, essentially, though it does have a few good things peppered in for us regular folk.
Pre existing conditions being covered is one. Maximum out of pocket limits is another. A standard expectation of care across insurance plans, as well.
But really, it just forced Americans to buy into a very broken system, and there have been some unintended consequences. Deductibles have gone up (the amount we have to pay before insurance really kicks in), as have co-pays (what we have to pay when going to the doctor, emergency, etc just to be seen) and premiums (the amount we pay monthly just to have the honor of being insured), but honestly, that had already been a huge problem for years and part of why this happened.
Personally, this year, I am incredibly thankful for Obamacare. I had to have surgery, and spent time at two separate hospitals. My bills are north of $125,00, but thanks to the maximum out of pocket provision, I “only” owe 7-9k (not entirely clear yet) where pre ACA (Affordable Care Act, or Obamacare as it’s also known as), it’d be a *much higher* percentage of that $125,000….
ETA: there’s also what is called in network and out of network, and the in network maximum for an individual this year is $7150, while the out of network maximum is around $14,000. This is why I owe between 7-9k. $7150 is due to the first hospital for in network services, but some of the doctors and a couple of the tests were “out of network” meaning they don’t have an agreement with my insurance company and aren’t part of the “network.” I have little or no say about this…
There are also many treatments that are considered experimental or unproven, which insurance can just refuse to pay for. The instances of people ending up with hundreds of thousands of dollars of medical debt are lower today than pre ACA, but they are hardly entirely gone. Your insurance may also just refuse to pay for certain treatments, forcing out of pocket expenses.
The ACA was a step forward in some ways, but still forcing us to work within a very broken for profit system that can and often does bankrupt people, deny treatments, be unaffordable from the get go, etc.
For example, I pay ~$200 a month for my health insurance. The family plan at my company, though, for employee, spouse, and children, is about $1100 a month, one full paycheck for many of the staff….
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