Mid-2009 marked the end of Barack Obama’s honeymoon with the American electorate. The new President’s decision to press ahead with health-care reform while the economy burned struck millions of Americans as a dereliction of duty. Fed by Republican propaganda, they rose up in a summer of discontent.
Amid the hysteria, Mr. Obama launched a counteroffensive. To sell his proposal to provide health insurance to the 15 per cent of Americans without it, he needed to convince the 85 per cent of Americans with coverage that they would not come up losers under his reform.
“Let me be exactly clear about what health-care reform means to you,” the President said. “If you’ve got health insurance, you like your doctors, you like your plan, you can keep your doctor, you can keep your plan. Nobody is talking about taking that away from you.”
It turns out he wasn’t “exactly clear.” A week before the implementation of Obamacare’s main provision – the requirement that the uninsured purchase coverage through online, state health exchanges – what’s clear is that almost no American will be unaffected. Despite its noble objectives, Obamacare risks turning an already labyrinthine system into an even deeper maze of uneven care that will cost taxpayers trillions.
At 2,700 pages, the Affordable Care Act starts out with an admirable premise. Nearly 32 million uninsured Americans could gain coverage. Depending on their income, they will be eligible for subsidies to purchase private insurance or obtain state insurance at no cost through an expanded Medicaid program.
Obamacare outlaws lifetime benefit caps imposed by private insurers that force thousands of Americans into bankruptcy every year over health-care costs. The law makes it illegal to deny coverage or charge higher premiums to sick people. For many, Obamacare is literally a lifesaver.
But by making insurance accessible and affordable for the sick and poor, Obamacare will raise costs for everyone else. In most rich countries, this would be fairly uncontroversial. Health care is seen, if not as a basic human right, as a critical tool in promoting social mobility and reducing income inequality. But for most middle-class Americans, it seems personal economic security trumps social solidarity.
Some of the angriest criticism of the law is coming from the union movement. Health insurance is a non-taxable benefit in the United States. So, for years, unions have pushed for “gold-plated” health insurance over wage increases, which are taxable.
Obamacare taxes the most generous health plans (starting in 2018). This will lead employers to roll back coverage for unionized employees or drop it altogether. That’s because the law also requires businesses with more than 50 full-time employees to provide health insurance or pay a $2,000 (U.S.) annual fine per employee, a provision known as the “employer mandate.” Since the fine is several times less than the cost of insurance, many companies that now offer health coverage will instead opt to pay the penalty.
There is already widespread evidence that small businesses are cutting full-time jobs and hiring more part-timers to avoid the $2,000 fine. Fearing the impact on a fragile job market, the Obama administration recently delayed the employer mandate set for Jan. 1 until 2015.
Still, this is just postponing the inevitable. For millions of Americans, Obamacare likely means losing generous employer-sponsored health insurance and having to purchase coverage of their own on state exchanges. Out-of-pocket costs will go up, as insurers raise premiums and impose higher co-pays and deductibles for everyone, since they are prohibited from doing so only for high-risk patients. To control costs, insurers will ration care – limiting doctor and hospital choice and increasing wait times.
“The law’s a train wreck,” Republican House of Representatives Speaker John Boehner said before the lower chamber on Friday passed a budget bill that blocks the Obamacare subsidies set to kick in on Oct. 1. If the House stands its ground, the government could shut down next week.
Obamacare has survived a Supreme Court challenge and a presidential election. But the fight over its implementation could make the summer of 2009 look like a picnic.