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The most important provision in the new law is that it prevents insurance exclusions based on ‘pre-existing conditions.’ But it doesn’t place strict limits on insurance costs.
The most important provision in the new law is that it prevents insurance exclusions based on ‘pre-existing conditions.’ But it doesn’t place strict limits on insurance costs.

Andre Picard's Second Opinion

Is Obama's law a health-care revolution? Meh Add to ...

The headlines tell us that President Barack Obama is leading a "health-care revolution" in the United States.

But if what happened is a "revolution" then Americans have truly lost their sense of the word since 1776.

The fundamental goal of The Patient Protection and Affordable Care Act - the formal name for the new 2,400-page legislation - is supposed to be ensuring "quality health insurance coverage for all Americans."

Yet, at the end of the day, the United States of America will not have what virtually all Western countries, and a growing number of middle-income countries, already have: universal health care.

Much has been made of the fact that an additional 30 million Americans who do not currently have benefits will have health insurance, thanks to the new law.

That will bring coverage up to 94-per-cent range - better than the 85 per cent currently but still not 100 per cent. This, despite the fact that health insurance is now "mandatory" in the United States, a rule that has many exceptions.

By 2019, when all the provisions of the law will have kicked in, there will still be 23 million American residents without basic health insurance. They are principally illegal immigrants, workers who can't afford premiums but are not eligible for subsidies, Native Americans (they are exempt from the law), those who oppose health insurance for religious reasons, and those who opt to not purchase health insurance and pay a penalty instead.

That takes some of the sheen off Mr. Obama's celebratory statement that the law "enshrines the core principle that everybody should have some basic security when it comes to their health care."

The U.S., a country with some of the most glaring income disparities in the world, has enshrined disparity in health-care legislation as well.

In fairness, it must be said that those disparities are shrinking; Medicaid, which provides health insurance to the poor, will be expanded considerably.

Still, a country that spends a staggering $2.5-trillion a year on health care should be able to offer basic health care (and then some) to all 310 million residents without exception.

What needs to be understood, however, is that U.S. health-care reform was never about expanding the social safety net to ensure fairness and equity, nor was it about expanding coverage to ensure better health outcomes.

Rather, it was about reining in the insurance industry by curtailing some of its most flagrant abuses.

As much as we like to complain about the "socialist" health care in Canada, it is cost-effective and fundamentally consumer friendly.

The care may not be instantaneous, but no one is ever denied it because they cannot pay, and they are never bankrupted by medical bills (though uneven drug coverage causes a lot of financial hardship that undermines the principle of medicare).

In the U.S., only select groups benefit from Canadian-style publicly-funded insurance: seniors, veterans, the poor and disabled (to varying degrees, depending on state of residence) and children (but those provisions expire in 2015).

For others - essentially those of working age, getting and keeping health insurance takes time, effort and money - often lots of money.

In Canada, health funding is tax-based; medicare is funded principally by income taxes and administration of care done by a single state-funded insurer. In Europe, most people get their insurance through workplace payroll plans, and the administration is a mixture of private and public.

The U.S. favours an individual mandate - meaning everyone is responsible for their own health insurance, and that insurance is purchased from private providers. But it also has a fair chunk of employer-based plans and some big state-funded programs such as Medicare for seniors and Medicaid for the poor.

One approach is not inherently better than the other, but the U.S. has learned the hard way that the "freedom" that is inherent in their mishmash of a system has resulted in a lot of people falling through the cracks, namely the working poor and middle-class families, and has created a tremendous burden on small businesses.

(We often forget in Canada that the greatest beneficiaries of medicare are the middle class and companies, and the biggest losers are the insurance industry.)

In the U.S., health insurance is a very profitable business. It is especially profitable if you practice cream-skimming - essentially selling insurance to large numbers of healthy people and leaving the sick, infirm and elderly to someone else, namely the state.

The other way to bolster profits is to avoid paying claims. U.S. insurers have become adept at this over the years, namely denying coverage or reimbursement to anyone with a "pre-existing condition."

One of the most absurd examples was that of a woman who, after breast-cancer surgery, was denied reimbursement because she had fail to disclose a pre-existing condition she suffered as a teenager - acne.

Those with private insurance also have to deal with all kinds of deductibles and annual and lifetime limits on payouts.

The most important provision in the new law is that it prohibits exclusions from coverage based on pre-existing health conditions. Also key is that it prohibits a health-care plan from rescinding coverage of an enrollee (except in cases of fraud); and that it removes annual limits on treatment costs.

But the law does not place very strict limits on the cost of insurance itself. Premiums will go up, particularly for healthy people working at big companies - by about 10 per cent on average. They will likely go down for those who are self-employed or employed by small businesses, because of new subsidies. And a lot of working poor families will finally get insurance.

But for all the bombast about U.S. health-care reform, these are baby steps.

This is not a revolution, it's a tweak.

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