Sorting out Obamacare Problems Now

obamacare-premium-mapAmersfoort   To the degree that the final version of the Affordable Care Act was neither fish nor fowl and represented a compromise between those that hated the entire concept and those that were trying to make the best of whatever slices of the original loaf were left, we all knew that problems were inevitable. Over the last five years we have been treated to regular and confusing reports from the battlefront, but nothing that ever fixes any problems, some of which are normal and predictable in a huge, new program. Without progress many fall out of love with Obamacare, even as more than ten million have enrolled with huge positive health impacts. Now consensus is building that any new president will have to fix the plan in the coming year, though no one seems sure about the fix or how to come to agreement on a cure.

What to do?

Some notions are almost simple-minded. One I saw said the quick fix was essentially a minor tune-up. Raise the amount of the subsidies for lower income families so that they can absorb the higher premium costs, and raise the level of the penalties to force more of the young and able into the program.

I’m all for raising the level of subsidies, if there can be agreement on that from whoever emerges as the new Congress, but raising the level of penalties is not a real solution to anything. The quick fix folks think that the fact that 260 million Americans or covered by healthcare on their jobs means no problems there, but that’s wrong too. Or, at least it isn’t the whole story.

Many penalty payers are not necessarily just the young and healthy, but also lower waged workers caught in so-called company coverage that ostensibly is offered, but because of the combination of premium cost and exorbitant, almost no-limit deductible charges, means that almost whatever the penalty level might be, it will still be cheaper than paying a premium of 9% of your pay and then having to pay many thousands of dollars in deductibles before you get any real benefit from the so-called insurance. This is really not medical insurance but catastrophe insurance, meaning if you know you need a major operation, maybe you pay. If not, you take your chances and pay the piper. Luckily, it’s taken out of your IRS tax refund, so you can pretend it hurts you less.

A lower waged worker caught in the service industry by these kinds of premium plus high deductible policies would need to be making more than $20 per hour for full-time 40-hour per week work to make it worth taking the insurance rather than paying the penalty. In some healthcare companies where we have contracts, like the service contractor giant ResCare for example, there are literally no takers out of more than 400 workers. I know people who are literally saving up for a CT scan because they don’t have insurance and are paying the penalty, making their health care “cash-on-the-barrel.” The quick, simple fix does nothing for any of these people and pretends that the United States is not dominated now by the service economy and its workforce.

The argument for a public option, a government-funded insurance of last resort, for these workers and others that can offer real competition and leverage to the private insurers makes sense, as Jacob Hacker, the political scientist and health care experts has argued. That’s still not single-payer or any kind of a system that takes private insurers out of the market, but the last years have already established that there’s no free enterprise in this marketplace. There are private insurances still waiting for subsides — $2 billion from the government – and there are regular folks getting subsidies and more that need them who are caught in the bind. Either the government needs to let workers and families caught by corporate insurance gimmicks that technically qualify under the Act, but are worthless in reality, come into the marketplace and get subsidies if qualified, or set up a public option that offers real coverage for this huge segment of the population.

The justice of raising penalties to catch the scofflaws doesn’t work when we still need a lot more mercy or stiff requirements on corporations to provide real insurance coverage.

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