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SoVaNow.com / October 02, 2013Congress’s worst efforts notwithstanding, yesterday marked the first day that people could begin to enroll for health insurance under the new marketplace exchanges established by the Affordable Care Act (a.k.a. Obamacare). Who should enroll? Good question. Let’s start with who doesn’t have to participate: Anyone who already has insurance and wants to keep it. Nothing about the new law forces you to change your existing coverage. Hence, the health insurance exchanges probably won’t be of much interest to you.
(If you’re curious anyway, go on the Internet and head over to http://www.healthcare.gov. On the opening day of sign-ups Tuesday, the site was having trouble handling the demand. However, the enrollment period doesn’t end until the end of March, so there’s plenty of time to straighten out the kinks. Also, don’t make the mistake of typing “.org” at the end of your web address. You’ll wind up at a commercial e-insurance site).
So, who is the Affordable Care Act designed to help? The simple answer is “anyone without health insurance.” That’s roughly one in six Americans. But because nothing is quite so simple, there’s lots of detail that must go into any explanation of what’s at stake with the ACA. A simple illustration to start out couldn’t hurt matters, could it?
Let’s take a fairly typical Southside Virginia family of four: a husband who is a truck driver and a wife who stays home with their two children, although to supplement the family budget she works part-time providing day care for other people’s kids, too. In this example, the husband makes $40,000 a year but doesn’t have employer-based health insurance, while the wife brings in another $10,000. Living paycheck-to-paycheck, our couple is strapped to pay for life’s essentials. They find it almost impossible to afford a comprehensive family policy. So either they go without, or they opt for a catastrophic plan, for which they pay hundreds of dollars a month and get virtually nothing in return.
Enter Obamacare: for the first time, our hypothetical couple should be able to get decent insurance. The coverage isn’t free: according to data provided this week by the federal Department of Health and Human Services, a “silver” plan (typically carrying a $2,000 deductible) for the entire family costs around $280 a month, with tax credits (more on this in a minute). Additional subsidies are available to reduce costs for people who earn less. So what exactly is a “silver plan?” It’s a private insurance policy that covers essential medical services. There are four basic flavors of insurance on the Obamacare exchanges — platinum, gold, silver and bronze — each providing the same benefits, but with different levels of cost sharing between the issuer and policy holder. (A platinum plan, with the highest premiums, covers 90 percent of the patient’s medical bills; the bronze plan, with the lowest premiums, pays out 60 percent. A silver plan has a 70/30 split.)
Before reaching the deductible, the truck driver’s new policy will cover three doctor visits (usually with a small co-pay), preventative care and other services. (Actually, these benefits have been incorporated into all health insurance, thanks to the Affordable Care Act.) If something goes seriously wrong — the dad gets cancer, the mom is injured in a wreck, one of the kids develops a rare disease — the annual maximum the family will have to shell out is $12,700. So no, Obamacare doesn’t eliminate the community yard sale or charity golf tournament as an ongoing feature of the American health care landscape. Still, there’s a huge difference between a $12,700 bill and one that can run ten, fifty, one hundred times that amount, easily, in the event of a serious illness or injury.
So here, perhaps, you may begin to get a feel for who will be helped by the Affordable Care Act — lots of hard-working people who are struggling to pay the bills, who don’t have a great deal of financial security or buffer against calamity, who were at the mercy of insurance companies before Obamacare came along. This description could apply to a huge swath of Mecklenburg County’s population: maybe a majority of it. But everyone’s outlook and needs are different. One of the best things about the new insurance exchange is you can go on the website and pick and choose the plan that best suits you. In Southside Virginia, you’ll find Anthem, Optima, Aetna and other major providers competing for your business. All the talk about how Obamacare is taking over the health care industry? The market exchange, with its emphasis on transparency and competition among private insurers, should put that myth to rest.
It’s certainly true that the marketplace exchange is a government-run entity. (So is the street in front of your house, if you want to get technical about it.) The exchange serves two primary functions. The first is to give people a way to comparison shop for coverage — as we’ve already seen. The second major function is to act as a conduit for tax credits that can dramatically bring down the cost of coverage. These tax credits, paid directly to the issuer, are the flip side of the “individual mandate” that you’ve probably heard about — the requirement that people buy insurance, or else pay a fine. (In the first year, the minimum fine is $95; the amount goes up in subsequent years. As for how the individual mandate is enforced, holdouts will find the fines tacked onto their 2015 income tax returns.) The tax credits make it pretty easy to obtain coverage, which most people are eager to get anyway: a family of four will get a break on insurance up to incomes of $94,200 annually. (The threshold for individuals is $45,960).
The law is criticized as a scheme to force you to take out insurance, which is certainly an intended outcome (though not always: there are hardship exemptions for people who can’t afford to buy any policy whatsoever). Yet the larger point, and the ACA’s greatest virtue, is that it consists more of carrots than sticks. Let’s return to the example of our truck driver and his family: these are not reckless people. Without decent insurance, they know they’re one step away from disaster. Even if they can’t afford the aforementioned $280 monthly silver plan, they can gain protection for themselves (and qualify for insurance-negotiated discounts for health care) by purchasing a bronze plan, with its higher out-of-pocket costs. The estimated monthly premium, for a Virginia family of four with a $50,000 household income? A mere $48, according to HHS data. Why would anyone pass on a deal that offers such peace of mind?
The Affordable Care Act is a complex law, with many, many interlocking parts: a product of all the objectives it has been designed to achieve. On the one hand, the law aims not to interfere with existing employer-based coverage, except around the margins: some rates may go up (as they might well have done without the law), but even people with health insurance through their employer will enjoy stronger benefits and protections, and the worst abuses of the insurance industry are (hopefully) a thing of the past. As for everyone else, those who have individual coverage and those without, the combination of mandate and subsidies will swell the ranks of the fully insured, which means less uncompensated care, fewer visits to the emergency room, and a more rational and accountable health system. The wild card is whether the ACA can rein in health care costs as a whole. The early evidence suggests the law may be helping to slow medical price inflation, but the verdict is out on this issue.
If you stop and really think about it, the main tenets of Obamacare — the market exchanges, the tax credits, the requirement that people pay into the system rather than act as free-riders — sound like something Republicans might have dreamed up. And so they did: the concept of the individual mandate was first proposed by the right-wing Heritage Foundation in the early ‘90s, and the first state to try the program (Massachusetts) was led at the time by a Republican governor, Mitt Romney.
Yet today, Republicans seem to have lost their collective minds over Obamacare, to the extent they’re willing to sabotage the democratic process in pursuit of their own radical ends. The GOP wants to overturn the Affordable Care Act, but not in the way the system is supposed to work — where laws are passed by the Congress, signed by the President, and upheld by the Supreme Court. The Affordable Care Act has met each of these tests, whereas nothing the Republican caucus in the House of Representatives proposes to do even comes close. Instead, Washington has grounded to a halt due to the efforts of what can only be described as a small coterie of horrible representatives — right-wing Republicans who shut down the government Monday after the Senate and White House refused to bow to their extortionist attempts to undo Obamacare. Typical of their stunted and vainglorious mindset are the comments of Texas Congressman John Culberson, who this week egged on fellow members of the GOP caucus with a cry of “Let’s roll.” Can you believe these people? Only in a seriously demented mind could Congress do anything to compare to the heroics of Flight 93.
If you’re looking for a crowning touch to the idiocy that has set Washington aflame, consider this plain fact: the House of Representatives shut down the government on Monday night, but the insurance exchanges under Obamacare opened on schedule Tuesday. (The Affordable Care Act is not part of the discretionary budget, so the shutdown has little effect on the law.) Talk about the gang that can’t shoot straight: even fellow Republicans in the party’s unofficial Sanity Caucus realize this is nuts. Rep. Devin Nunes (R-California) yesterday likened hard-line House conservatives to “lemmings with suicide vests.” He further told The New York Times, “It’s kind of an insult to lemmings to call them lemmings, so they’d have to be more than just a lemming, because jumping to your death is not enough.” And this coming from a Republican!
The mess in Washington will eventually straighten itself out. What won’t happen is the reversal of the Affordable Care Act. The law is here to stay until such time as its opponents can convince the American public to grant them the power to overturn it by legitimate means. So far, the Republican Party’s attempts to accomplish this quest have failed utterly: not only with an unsuccessful 2012 presidential campaign, which the GOP sought to make a referendum on Obamacare, but with failed runs for Senate and House seats, too. Thus we find ourselves at the present moment, with millions of people poised to sign up for the new insurance exchanges, where finally they can see for themselves how the Affordable Care Act works and how they may benefit from it. My guess is that once people figure out how the system works, they’re going to be shocked by all the cynical lies they’ve been fed about Obamacare. If such a thing happens, Washington Republicans are going to have a lot bigger problem than a government shutdown on their hands.