Thursday, January 9, 2014

Why the affordable care act should be repealed

The Affordable Care Act, more commonly known as Obama-care, was signed into law on March 23, 2010 after much Republican resistance. The law attempts to attain two main goals, to make health care more affordable and to cover many of the 48 million people without insurance (Pear). Supporters of the law claim it achieves both, but in reality it only achieves only the latter. In addition, many citizens are losing their current health insurance because their plan does not qualify.  Finally, even those who wish to sign up for the new exchanges created by this law are unable to because the website for signups seldom works. 
The Affordable Health Care Act,  law makes healthcare less affordable.  A major problem is that the bill fails to significantly address health care costs. Drug prices were not negotiated; there was little action to curb rising insurance premiums.  This law promises insurance for millions of people, but has no plausible way to pay for their medical care. There is no doubt that insuring people who cannot afford medical care will be very expensive.  Since many sick people with preexisting conditions can now be covered, prices would go up. The law has a fine to encourage young people to sign up for health insurance to make up for this increase in cost.  However, the fine is insufficient.  In 2014, an adult would have to pay only $95 for not having health insurance (Luhnby). Meanwhile, the average monthly cost for a middle tier plan is $328 (Persaud), around 370% more in a single month than the fine is for an entire year. Even though the fine will rise, it will still cost over five and a half times as much to buy healthcare than to pay the fine.  Additionally, 80% of the uninsured will be exempt from the mandate (Luhnby). The lack of economic incentive for purchasing insurance and the difficulty navigating the website will result in fewer people purchasing insurance.  Costs will go up dramatically, further discouraging young people to sign up, which will further raise costs. The law will enter a death spiral of ever-higher insurance rates until the system collapses or major reforms are required.
Furthermore, 12 million hard working Americans have lost their insurance (Killough). Part of the problem lies in the complicated regulations.   These people have relatively cheap plans, and the new law says these plans do not meet the new requirements. The President said, “If you like your insurance, you can keep it”, but this was clearly a lie. Ironically, the law tried to make it easier to obtain affordable healthcare, but affordable healthcare is obtained more difficultly. Some will get health insurance, but the rise in prices and the loss of insurance will make people who currently have it suffer.
Another major problem is that the backend of the website has been dysfunctional. Even though individuals can now sign up, “…insurers have long said that they are receiving botched enrolment forms, or 834s, if they receive them at all” (The Economist). So, while many will think that they have health insurance, in reality they will not. This could become a major problem when people arrive in hospitals only to realize that they do not have insurance. The fact that health care officials “…would not confirm what share of 834s were being bungled” (The Economist) shows that it is a major problem. The worst of the website problems are probably over. However, not being able to deliver on a website for the president’s signature law calls into question the administration’s competency in performing a major overhaul of the U.S. healthcare system.
           A major problem lies with the fact that the law was designed in an unsustainable way. If there major changes are not added to the bill, it will lead to much higher insurance rates and eventually a collapse in the system. Once the system collapses, there will be millions of people who got their healthcare insurance through Obamacare and want to keep it. Unfortunately, for many of these people, a free market system will be unable to cover their insurance in a way that they can afford it. Ultimately, these people will want to keep the insurance and will become very influential in the healthcare debate. The only way that these people could be covered is a single payer system. The problem with that lies with the fact that this system would be expensive for the government and require tax hikes, something that neither party wants to do. Considering that Medicare already cost around 500 billion dollars per year (Sahadi), and that there were 3.3 workers per beneficiary in 2011 (Sahadi), even when factoring in that old people need more healthcare than others, and potential savings in costs of Medicare and Medicaid, this system could still add around $1 trillion dollars per year. Considering that the current GDP was 16.9129 trillion dollars after the 3rd quarter of 2013 (Bureau of Economic Analysis), this would equal about a 6% increase of debt as a percentage of current GDP every year. The situation could put us in a Spain like scenario were people do not want to cut services even if it is necessary, and the fiscal burden leads to prolonged high unemployment and recession.
The U.S. should repeal the Affordable Care Act. It fails to allow people who like their insurance to keep it. It fails to make healthcare more affordable. It is likely that without repeals or considerable reforms, the law will cause the system to collapse on itself.
That being said, Republicans should not solely focus on the law, or even make it their primary issue. Despite the law’s low approval rating of 35% (Alter) most Americans are still primarily focused on the economy. Despite the recent jump in GDP growth shown in the 4th quarter of 2013, unemployment remains high, and yearly GDP growth remains disappointing, especially compared to before 2008. The resurgence of Al-Qaida and affiliated groups in Syria and Iraq also make the president vulnerable after repeatedly stating that Al-Qaida is on the path to defeat. While the Affordable Health Care Act is a major issue, it should not be focused on too much by opponents of it in order to prevent ignoring other issues. Instead, opponents of the law should combine opposition to it with mentioning other issues in order to get elected, and focus on repeal after 2014.

No comments:

Post a Comment