Dr. Kantor recently answered questions from Physicians News Digest about why Americans are feeling ambivalent toward Obamacare.
Why Americans are ambivalent about Obamacare and how it can lead to a single payer system?
To really understand the country’s ambivalence we have to go back to the beginning. When the bill first started it had a single payer option in it. This was pulled almost immediately because many democrats, as well as all republicans, were against it. Then when the bill was reintroduced, it passed without a single republican vote in either house. This was the first time in the country’s history that a major entitlement bill was passed by only one party. Polls at the time showed the country was not in favor of the bill (and still do). Then remember the controversies that were attached to the bill to get a democratic majority, meaning the cornhusker scandal and Louisiana scandal. Then after being passed by both houses, the bill had to be reconciled between the houses and re-voted on. Then Scott Brown won the Massachusetts Senate seat and they could not win the senate vote again and they used a procedure in reconciliation so they bypassed another vote. These facts and shady procedures put a bad taste in the publics’ mouth and mind for the bill.
After all this, the administration started being racked by scandals. We had Bengasi, the NSA, and the IRS scandal. These scandals lowered the trust level in our government to an all time low. Since the government was going to be running the program directly or indirectly, skepticism in the bill grew. When the IRS scandal hit and people realized they would be in charge of a large part of the program, the trust level for the bill went through the floor.
Now as time passed and people started finding out what was actually in the bill and the politicians and media put their spins on it, the public was more confused and ambivalence grew. We started hearing about taxes, penalties, and complaints from different interests started growing.
As these complaints grew, problems started coming out about the bill. There were problems with the long term care provisions and the numbers became so unworkable that they totally scraped those provisions.
When the bill first came out the CBO said it would be revenue neutral, then six months later said it would cost 900 billion dollars. Then a year later said it would cost 1.8 trillion dollars. Then the last figure I heard had a cost of 2.8 trillion dollars over ten years. Mistakes, or changes of this magnitude, make the public more and more skeptical.
Then we started hearing the medical device manufacturers complaining about the taxes and those provisions were delayed.
Businesses started complaining about their penalties and computer problems and that provision (the business mandate), which most experts considered the key provision, was delayed for a year. This made individuals who are still under the mandate upset and really consider the situation unfair. Unions have started complaining about the Cadillac tax and are asking for exceptions, waivers, and exclusions. Many have already received waivers and this seems unfair to non union workers and the skepticism grows. The latest revelation about the congress, senate, and their employees getting exclusions and large subsidies really doesn’t sit well with the public and is one of the causes of the government shut down. The public is asking, “If Obamacare is good enough for us, why isn’t it good enough for you?”
Now the exchanges have opened up and the rollout has been dismal. Most people can’t get on the website or get kicked off after trying to do the documents. Experts say the sites are poorly designed and will take six months to fix. This just makes the public less trusting, more skeptical, and even more ambivalent.
With the prices of the policies finally coming out, the sticker shock of the high policy prices was the final straw for most Americans. The prices show policies going up drastically for most Americans. For the 50% of America that won’t be subsidized, prices have really skyrocketed. For the 50% that are subsidized, most say they still can’t afford the policies.
What brought us to this point?
We have to look at the original design of the bill. The affordable care act was not designed to work, it was designed to pass. It is very hard to design a bill that will make everybody happy. When you design one with no input from one of the two major parties and no real public input, you know you are in trouble. This means you need every single member from the remaining party to sign on. To do this concessions have to be made. These concessions are made to secure votes, not to improve the bill.
The concept of the bill was not to improve our healthcare system, it was designed in theory to lower healthcare (insurance) costs. They passed mandates in the bill that said insurance companies had to spend 80% of revenues on actually providing healthcare to its members (only 20% for overhead or profit). They mandated that people with preexisting condition have to be accepted without higher premiums. They mandated that children under 26 must be allowed on their parents’ policies. They mandated there can be no price differential between males and females of child bearing age. Although all these mandates are popular, they are actuarially incorrect. People with preexisting conditions cost more. Young adults on their parents’ policy bring in less revenue that separate policies. Women of child bearing age cost more than men of the same age. This can’t work for the insurance companies, which are private and cannot print money like the government. So what the government promised the insurance companies to afford the huge costs of these mandates is 30 million new people; most of them young and health will be forced into the system. Those extra people with their premiums will offset the costs of the mandates. These people will be forced into the system by mandates on business coverage and personal mandates to have insurance. These mandates will be backed by penalties to force the people into the system. It almost sounds feasible when you first hear it. Now here is where the politics and concessions come into play. The Democrats, who were the only ones voting for the bill, didn’t want the penalties too be too high. They did not want to appear too mean. So they made the penalty for businesses (which is now delayed a year), $2,000 per employee, starting on the thirty first full time employee, if the company has over 50 full time employees. This penalty comes into play if the company with over 50 employees does not provide a government accepted policy and pay 60% of the premium (at a minimum). So what we saw happen is companies cut employees to below 50 if it was close, split companies up into separate legal entities with less than 50 full time employees and switch full time employees to part time (under 30 hours). This was done by the businesses to avoid the mandate, which has been delayed and will continue to be done in preparation for the mandates return on January 1, 2015. The real problem is the insurance companies have watched this trend.
For individuals they made the penalty $95 the first year if you do not buy insurance. The cost of an individual policy for the young and healthy ranges from $1500-$4000 with pretty high deductibles. So surveys show this group will opt out and pay the penalty.
With the insurance companies realizing they will not get the 30 million new members to offset the costs of the mandates, they were forced to raise premiums, often drastically, to cover the mandates of the bill and stay in business. So now we have an unpopular bill, government shutdown, and higher health insurance costs for most people.
What is the next step in the healthcare/ insurance quagmire?
Senator Harry Reid, the majority leader of the Senate says, “The affordable care act is just the first phase. There will be lots of problems but as soon as we reach the next phase, a single payer system, the problems will be smoothed out. This was always the goal.” Nancy Pelosi, the minority leader in the house, basically said the same thing.
With Obamacare not working and having huge costs (2.8 trillion over 10 years), these leaders believe the only logical, economic way out is a single payer system along the lines of Canada and England. Much of the 50% of the public that pay no taxes are for this.
Do we really want the government in charge of another 17% of our economy? If Obamacare continues to fail and is not repealed, I fear this may be the answer that is forced on the country. I believe this would be a disaster for our country and destroy the greatest, most innovative healthcare system in the world.
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