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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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.
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