What Is ObamaCare? 2013-2014: Overview Part 1 (Insurance Subsidies)

An ObamaCare Overview 2013-2014: Part 1

Oh man, I am so frustrated that people misunderstand ObamaCare—the Affordable Care Act (ACA)—and continually frame it as something it’s not. They frame it as some sort of universal health care coverage, or as some vague new program that replaces Medicare and Medicaid, or at least fixes their most egregious problems (Medicaid’s age 21 cut-off, for example). None of the above are true. I’m writing a book, a memoir of my fight against Alabama Medicaid’s age 21 cut off and a book-length exploration of the plight of young vent-dependent people in general, and if you’re wondering how ObamaCare changes things vis a vis Medicaid, it doesn’t. The Affordable Care Act expands Medicaid eligibility, but doesn’t change the underlying rules and regulations, or fill its most egregious gaps. So there’s very little about ObamaCare in my book; it just isn’t all that relevant for those of us with severe disabilities who have to rely on Medicaid and Medicare.

What is ObamaCare?

The public needs to ask this over and over again, until the wrong assumptions dissipate. Congress never debated universal health care coverage. When Congress debated the Affordable Care Act, they were debating a proposal nearly identical to a bill titled the “Health Equity and Access Reform Today Act” (HEART Act) which was introduced by Senate Republicans in 1993 as the conservative alternative to Bill Clinton’s health care legislation (which focused on an employer mandate to provide health insurance). The crux of the conservative proposal was essentially, “we want universal health care too, but through private insurance, and we’ll do that through an individual mandate; every American will have health insurance coverage.” The individual mandate means that the government requires individual citizens to have insurance.

The mandate made its political début in a 1989 Heritage Foundation brief titled “Assuring Affordable Health Care for All Americans,” as a counterpoint to the single-payer system and the employer mandate, which were favored in Democratic circles. In the brief, Stuart Butler, the foundation’s health-care expert, argued, “Many states now require passengers in automobiles to wear seat-belts for their own protection. Many others require anybody driving a car to have liability insurance. But neither the federal government nor any state requires all households to protect themselves from the potentially catastrophic costs of a serious accident or illness. Under the Heritage plan, there would be such a requirement.” The mandate made its first legislative appearance in 1993, in the Health Equity and Access Reform Today Act—the Republicans’ alternative to President Clinton’s health-reform bill—which was sponsored by John Chafee, of Rhode Island, and co-sponsored by eighteen Republicans, including Bob Dole, who was then the Senate Minority Leader.

Source: Why Republicans Oppose the Individual Health-Care Mandate : The New Yorker

By 2009, the debate had turned upside down, with Democrats supporting the Heritage Foundation‘s individual mandate as the core of the proposed Affordable Care Act, and the Republicans unanimously against the individual mandate. Inexplicably, Democrats have moved to the right and embraced the rightist policies of the past—Barack Obama has positioned himself as a George H. W. Bush-type of moderate conservative president, a dramatic break from prior black presidential candidates like Shirley Chisholm and Jesse Jackson—and Republicans have turned against their own policies after supporting them for two decades. It’s bizarro world!

The costs of the Affordable Care Act. almost all of the costs, come from the individual mandate and the associated subsidies. The core of ObamaCare, the nut meat, is the system of subsidized health insurance exchanges. The main idea is that “health insurance is unaffordable and we’ll fix that by adding subsidies that make insurance affordable, and for the poor we will expand Medicaid eligibility, then most everyone will have coverage.” Affordable Care Act proponents called this “achieving universality” by tweaking multiple pieces of the system, like a piecemeal universal health care. This rang hollow even then; it didn’t even sound like the proponents believed their own rhetoric. I didn’t buy the claims that we’d “get to universality” any more than the incredible claims about health care providers voluntarily holding down prices as part of the ObamaCare grand bargain.

The debate in Congress over the Affordable Care Act primarily revolved around the individual mandate, the potential costs and red tape nightmares involved, and, inexplicably, abortion. Though the ACA includes a firewall between its subsidies and abortion, there aren’t any abortion-funding provisions in the bill, and the legislation is not intended to address abortion at all, still, the debate centered on abortion to an unexpected degree, in the House of Representatives especially. President Obama signed Executive Order 13535 to reinforce the Hyde Amendment’s prohibitions on federal funding for abortion as related to the ACA.

During the 2008 Democratic primary, Hillary Clinton was for the individual mandate and Barack Obama was against it. I agreed with that version of Obama. The idea of requiring citizens to buy a defective product (health insurance scams) from select corporations is terrifying. The U.S. Supreme Court was asked to rule on the question of whether the federal government can require buying insurance and fine citizens for not acting, for non-activity. The court gave the individual mandate a thumbs up, as long as the fine is implemented as a tax. I think that this sets a horrible precedent in terms of the fusion of corporation and state. The Obama Administration, and future administrations, will decide which health insurance plans meet Affordable Care Act standards and are allowed into the insurance exchanges, and as we already have seen, for example with ACA requirements being waived for the most powerful companies, how corrupt that process can be.

In 2013-2014 the main provisions of ObamaCare, the subsidized health insurance exchanges—some, like New York’s, will be state-run, but where governors have refused to set up exchanges, for example Alabama, there will be federal-run exchanges—will go into effect, along with the individual mandate. Right now, only two percent of health insurance plans meet the minimum coverage requirements to be sold on the exchanges. We’ll see how things change as the requirements kick in and the exchanges come online (literally, the exchanges will be online marketplaces). Expect to see more than a few kerfuffles over the individual mandate penalty fines, plus some serious sticker shock—the cheapest type of plan under the ACA is a “bronze plan,” and according to an IRS estimate, bronze family plans for 4 and 5 person families are assumed to cost $20,000 a year in 2016—though it seems the exchanges’ subsidies may pay for the bulk of the exorbitant costs. I don’t know that pouring subsidies in won’t just incentivize insurers to keep raising prices. Removing the downward pressure on prices consumers exert when they can’t afford premium hikes, the feds saying “no matter how bad you gouge, we’ll pay it” seems INSANE to me, like something that would only make sense to an industry lobbyist.

Political cartoon by Nick, "Obama's Faustian Bargain"
Political cartoon by Nick, “Obama’s Faustian Bargain”

Massive subsidies that only increase are not a positive, in my view. Neither are subsidies to the health insurance companies amid an abusive dynamic “please stop killing children with preexisting conditions! Here, take $500 billion, just stop hurting us!” a positive; they’re actually the worst possible approach to this problem. And anyone who thinks abusive practices like the cruelty against those of us with preexisting conditions will end, you’re naive; new abuses and new loopholes to get old abuses through will appear on day 1. Awful unintended consequences are already arriving. The entire model desperately needs replacement.

Too often, health insurance is a scam. You pay in enormous sums each month just so the insurance company can deny you care in your hour of need. It’s essentially a very sophisticated, legal way to mug you each month. And when you subsidize something, you get more of it…

What is ObamaCare? it’s predominately a requirement to buy health insurance from select corporations with fines for disobedience, plus enormous subsidies for those selected corporations.

Next, in Part 2: the Supreme Court ruled that the “Medicaid expansion” provisions of the ACA must be voluntary for states. This has meant decision time for all 50 state governors across the country, but opting-in to the Medicaid expansion ISN’T “accepting ObamaCare.”