“Obamacare” also known as Public Law 111-148; The Patient Protection and Affordable Care Act[1] (hereinafter, “PPACA”), signed into law March 23, 2010, is the most consequential health care law to emerge from Congress since 1965 when Medicaid (federally funded health care for low-income families) and Medicare (federally funded health care for seniors) were created. The PPACA consists of 2,400 pages of legalese, and although its projected cost is at least $940 billion over the first ten years insuring an estimated 32 million additional U.S. Americans, it will nonetheless leave 23 million others uninsured.[2] Why? Because the United States is the only wealthy country in the world that still believes the provision of and payment for health care is a business only, and does not involve the basic moral question that should drive reform – “Do we want to give everybody access to health care?”[3] This intricate legislation can best be understood by grouping its provisions into three categories: (1) expanded coverage, (2) insurance regulation, and (3) taxes and other funding, not discussed in this comment other than with regard to the “individual mandate”.
Expanded coverage under the PPACA is realized by changes to Medicaid and private insurance.[4] The law eases the qualifications for Medicaid by expanding the definition of “low-income” to include a higher income bracket, and by including families without children. Previously, Medicaid covered only low-income families with children. This expansion is expected to provide health care coverage to an additional 16 million U.S. Americans.
By 2014, each State is obliged to institute an online health care insurance marketplace offering five different levels of coverage plans: bronze; silver; gold; platinum; and catastrophic. The health care insurance marketplace is expected to furnish private health care plans to an additional 16 million U.S. Americans who are currently uninsured, if they can afford the cost of the insurance premium.
In addition, employers with more than forty-nine people on the payroll must provide a health insurance plan for employees, and smaller companies with fewer than forty-nine employees that choose to provide health insurance will receive a tax credit.
What happened to the so-called “public option”—that is, a non-profit health insurance plan offered by the federal government?[5] The health insurance industry lobbied strenuously to kill the public option to avoid the threat of a government-run competitor.[6] The industry’s successful lobby was largely due to its public campaign that catered to five U.S. American myths: (1) “It’s all socialized medicine out there”; (2) “They ration care with waiting lists and limited choice”; (3) “They are wasteful systems run by bloated bureaucracies”; (4) “Health insurance companies have to be cruel”; and (5) “Those systems are too foreign to work in the U.S.A.”[7]
“It is all socialized medicine out there” is a myth that transcends the United States’ political chasm in which both parties alike, democrats and conservatives, declare that a “European-style, socialized medicine” system cannot work in the capitalistic U.S.
First and foremost, U.S. American health care is not a system at all. It is a market—a market-driven health care, for profit. It is unfettered capitalism at work. U.S. companies like Aetna and UnitedHealth bought non-profit health insurers like Blue Cross and Blue Shield and converted them into profit-making businesses that produced gross bottom-line results, which grew in direct proportion to the company’s selectivity and diligence at denying patient claims[8] and preventive care. Corporations that must fret over quarterly and annual returns find it difficult to justify spending money on preventive care that will not save money for years to come, and certainly not while the insured is covered by the plan paying the bill. U.S. Americans often maintain the same health care plan for less than six years, mostly due to the movement within the employment market where health insurance initiates and concludes with each job, and therefore, many insureds who receive preventive care will terminate coverage before the insurer realizes any financial benefit from its payment for this care.
What is more, because awareness of a preexisting condition can lead to higher insurance premiums—or outright denial of coverage—insureds avoid preventive physical and other examinations for fear of losing their health insurance.[9] In fact, health insurers are often likely to “refuse to pay $150 for a diabetic to see a podiatrist, who can help prevent foot ailments,” the New York Times noted, but “nearly all of them cover amputations, which typically cost more than $30,000.”[10]
Nonetheless, even in the absence of a grand-scale system, in the midst of this U.S. capitalistic market lie two, well functioning socialized medicine systems, Medicare and the U.S. Department of Veterans Affairs. Almost all U.S. Americans utilize Medicare when they turn sixty-five while people in Germany, Switzerland, and other European countries remain covered by private insurance plans for life.[11] This is also true with respect to military veterans who utilize the Veterans Affairs health care coverage and hospitals—one of the purest examples of socialized medicine. So, if socialized medicine is ineffective, then U.S. American seniors and veterans are receiving sub-standard care-but the U.S. has not revamped these two socialized health care systems because they are, in fact, providing adequate care.
In response to rationed care, waiting lists and limited choice the observer need only consider the “in-network” lists of doctors, or “preauthorization” requirements by U.S. insurance companies to note that, even if France and Japan do not allow a choice of insurance company, the insured does get a choice of providers of any type anywhere in the country.[12] And, while Canada and Great Britain do suffer from notorious waiting lists for nonemergency care (emergency care is provided[13]) because they limit the number of specialists and operating rooms to save money, other countries such as Germany, France, Sweden and Denmark still outperform the U.S.
The United States spends roughly 20 cents of every dollar for nonmedical costs: paperwork, reviewing claims, marketing, profits, etc., the highest administrative costs in the world—this is a wasteful system run by a bloated bureaucracy.[14]
Health insurance companies do not have to be cruel. In fact, in France, Germany, Japan and Switzerland insurers have to accept all applicants, regardless of any previous conditions, they cannot cancel coverage as long as you pay your premiums and they must pay any claim within tight time limits.[15] U.S. insurance companies are mainly profit-making enterprises. They enhance their profits not by paying for people’s health care, but by finding ways not to pay. U.S. health insurance companies are cruel because their first priority is to make a profit to pay dividends to investors. The U.S. is the only nation that lets insurance companies profit from the basic health care package.
Each of the four systems[16] of health care is in use in the U.S., which dispels of the myth that the systems are too foreign to work in the U.S. For veterans, active-duty military personnel, and Native American, the U.S. uses the British model (Beveridge). For people over sixty-five, the U.S. has adopted the Canadian model (National Health Insurance). For working people who get insurance through their employers, the U.S. follows the German model (Bismarck). For the rest of U.S. Americans, the U.S. is an Out-of-Pocket country.
The insurance lobby’s public campaign against the public option in conjunction with its reluctant agreement to new restrictions and regulations defeated the public option.
The most important new restriction is the “guaranteed issue” rule; that is, as of 2014, insurers will be obliged to issue, or renew, a policy to anybody, regardless of any preexisting condition. This change should provide coverage to about 16 million U.S. Americans who cannot get coverage now. It is necessary, though, that “guaranteed issue” be combined with the “individual mandate” rule.[17] Since Congress did not require a strict penalty for people who do not buy insurance, many healthy people may try to avoid the “individual mandate.”[18]
Beyond this, the law outlaws rescission, the practice of rescinding or cancelling coverage when the insured incurs exorbitant medical bills. The law also prohibits the designation of annual or lifetime limits on reimbursement, and requires insurers to keep administrative costs at or below twenty percent of the premium income. And, even though insurers may still deny a claim, they must report the number of claims rejected annually. But, insurers are not required to pay honoured claims within any strict limits, and they may still profit on the basic package of coverage.[19]
The PPACA will extend insurance coverage to millions of U.S. Americans currently uninsured, and it will eliminate some of the insurance companies’ harsher practices, but the U.S. will still have the most complicated, expensive and inequitable health care system of any developed nation. It certainly is not universal health care coverage at a reasonable cost.
Note
1. Congressional Budget Office, “Cost Estimates for Health Care Legislation,” http://www.cbo.gov/publications/collections/health.cfm.↑
2. 50 million U.S. Americans were uninsured in 2010. T.R. Reid, The Healing of America: A Global Quest for Better, Cheaper, and Fairer Health Care 245 (Penquin Books 2010).↑
3. During the change of Taiwan’s and of Switzerland’s health care systems, both countries decided that “society has an ethical obligation—as a matter of justice, of fairness, of solidarity—to assure everybody access to medical care.” Id. at 183. As a result, the national debate was waged around ideals like “equal treatment for everybody,” “we are all in this together,” and “fundamental rights” rather than on the commercial implications.
In the U.S., however, the debate for those who already had health insurance focused on self-interest and not on the moral obligation to provide health care to others. And, while 85% of U.S. Americans believe that health care is a basic human right, the public debate is still centered on the economic implications of universal health care rather than on the moral question. Id. at 220.
In fact, to the question, should the rich and poor have the same chance get medical care, Professor Richard Epstein of the University of Chicago Law School, replied, “the correct answer is no. To provide health care for the poor child,” he argued, “other Americans would have to be taxed to pay for the care. That would generate heated and costly political battles. To open the doors to forced redistribution induces the rich to spend more defending their wealth, and the poor to spend more to take it away. Both sides cannot win, and a smaller pie leads to worse health care.” Id. at 223. (quoting Letters, (JAMA March 11, 1998).↑
4. See Kaiser Family Foundation, “Focus on Health Reform,” 4/21/10, http://www.kff.org/healthreform/upload/8061.pdf↑
5. The public option was a form of universal healthcare that meant all U.S. Americans would have been covered through an increase in taxes. Every individual would have been required to purchase insurance or to “opt in” to the pubic option—a concept known as the “individual mandate” rule, discussed in further detail below.↑
6. The public option was colloquially known as a Medicare-at-any-age program.↑
7. Reid, The Healing of America at 229-235.↑
10. Ian Urbina, In the Treatment of Diabetes, 1 New York Times, January 11, 2006)..↑
11. Reid, The Healing of America at 230.↑
13. A hospital is not, as a general rule, required to provide non-emergency care to persons unable to pay. See Scott Becker, Health Care Law: A Practical Guide, 2008, Sec. 21.01(3). It is also not required to continue treatment in the face of nonpayment of bills. Id. In the 1980’s, there were several cases of patients who were “dumped” onto the streets in their hospital robes because they could not pay. Id. at 220-221. The Emergency Medical Treatment and Active labor Act of 1986 was passed requiring any hospital receiving Medicare funds to admit and treat anybody who is (1) facing severe risk of death, or (2) in active labor (the two least frequent emergency scenarios), until the patient’s medical condition is “stabilized”—a subjective standard. Reid, The Healing of America at 231.↑
16. In the Bismarck model, found in Germany, Japan, Belgium, Switzerland and Latin American, both health care providers and payers are private entities. The model uses private health insurance plans, usually financed jointly by employers and employees through payroll deduction. These plans, however, do not make a profit.
In the Beveridge model, health care is provided for and financed by the government, through tax payments. Medical treatment is a public service. Usually all hospitals and clinics are owned by the government and even some doctors are government employees, but there are also private doctors who collect their fees from the government. This model is found in Great Britain, Italy, Spain and most of Scandinavia.
The National Health Insurance model contains elements of both the Bismarck and the Beverage models: The providers of health care are private, but the payer is a government-run insurance program into which every citizen must pay. Canada, and to some extent Taiwan, utilize this model.
In the Out-of-Pocket model, usually found in poor countries, such as rural regions of Africa, India, China and South America, the patient pays 100% of his health care costs; the result, the rich get medical care and the poor stay sick or die. Id. at 17-19.↑
17. As an economic principle, a unified system is a powerful force for cost control. Since the single health care system is the only buyer of medical services, the system maintains powerful market clout in negotiating fees. Id. at 235, 241.
In both Taiwan, an emerging Asian island, and Switzerland, an ancient European confederation, new universal health care systems were successfully introduced in 1994, even though in both, as in the U.S. today, there was a vigorous democracy with fierce competition between political parties and powerfully influential financial and insurance industries where payment for medical care was dominated by health insurance plans tied to employment. Both countries reasoned that everyone has a right to health care. To realize this end, both exacted mandatory, individual financial contribution into the system—the “individual mandate” rule. This mandated customer base provided a broad enough risk pool to pay for the “guaranteed issue.” Id. at 165-166, 248.↑
18. U.S. conservative politicians have filed a lawsuit arguing the “individual mandate” is unconstitutional. The argument is that the Government cannot dictate that an individual must purchase a particular product. This argument fails. Id. at 248.
The U.S. Government already mandates that it is illegal to walk down the street nude. That is a mandate to buy clothes. People are jailed for failing to feed their children—that is a Government mandate to buy food. Id.↑