The industry keeps putting profits before serving the public as President Obama has become the health insurance industry’s top salesperson. In Massachusetts, he urged Americans to take a long view on implementing the Affordable Care Act, a.k.a. Obamacare. While it may provide coverage to millions who now lack it, the evidence is mounting that Obama never should have trusted the private health insurance industry to begin with. Let’s look at why.
Obamacare was written first by the industry for the GOP.
The template for the Affordable Care Act was the Heritage Foundation’s 1992 report for expanding the health insurance marketplace. Their plan had tax credits, while Obamacare has income-based subsidies paid directly to insurers to make it affordable for the poor, working class and middle class.
As former Secretary of Labor Robert Reich points out, this was the Republicans’ and insurance industry’s plan, not the Democrats’ who wanted to expand existing government programs. Its reliance on the private sector was flawed from the start, and is at the core of the current troubles.
Obamacare does not have meaningful price controls.
Even though the law passed in 2010, most of Obamacare was not slated to go into effect until January 2014. That gave insurers several years to ratchet up premiums—with 18 to 25 percent annual jumps in states like California where insurance premiums are unregulated. While the law limits the percent of administrative costs that are part of premiums and that took effect in 2012, it does not regulate overall costs. Does anybody think insurers were not going to lock in profits and gouge the public when they could? Can we sell you a bridge in Brooklyn for cheap?
All insurers don’t have to cooperate—and haven’t.
Not every health insurance company decided to participate in the ACA, which left many small states with very few options for uninsured residents. That means Obamacare is not offering a range of plans, in which competition is supposed to lower costs, in states like Maine and New Hampshire. That’s left state legislators wondering if they will have to create interstate compacts with neighbors to create coverage pools to attract private insurers to give residents more choices. Again, insurers did what was best for their bottom lines, not for the public health. Perhaps all the partisan chaos made Congress take their eyes off the ball and strike out.
Is anyone surprised policies now are being canceled?
Nobody should be surprised at the latest outrage from the industry, which is canceling hundreds of thousands of individuals’ policies, making the president eat his words that anyone can keep coverage they like. Obama ought to have known better. But as Secretary of Health and Human Services Kathleen Sebelius told Congress last week, insurers are canceling policies or offering higher-priced substitutes because the old policies don’t meet the law’s minimum coverage requirements. I don’t think we can lay this all on Obama. His heart seemed to be in the right place but his judgment wasn’t, especially given Congress’s testy behavior on social safety net benefits since day one.
People might be angry that their policy is being canceled or might cost more if they can’t get a federal subsidy, but they would feel a lot worse if they were hospitalized and faced thousands in unexpected bills and being hounded by debt collectors. Who’s more at fault here, Obama for being played like a card, or insurers for selling bad policies in the first place? Probably both, plus the Republicans for their distracting oppositional stance.
Guess what? Now Republicans prefer a public option?
Talk about oppositional? Now they want a public option; or how about single payer insurance, with Medicare expanded out to all ages. There’s a lot more to be seen in the Obamacare drama before the nation’s new healthcare regimen emerges. But for now, a final—and perverse—reason why the health insurance industry shouldn’t have been trusted in the first place goes beyond the previous four.
Some Republicans whose states are taking federal money to expand coverage for the poor though state-run Medicaid are predicting that the market reforms won’t work. Ohio Gov. John Kasich wants the law’s public portion to work, the New York Times reported last week, but predicted the private insurance requirements won’t. “It’s going to throw people out of work and not control costs,” he said.
That’s because it reminds everyone that the best approach to healthcare reform is what Democrats and progressives have called for all along—a so-called public option via expanding existing government-run programs such as Medicaid and Medicare. It isn’t rocket science but the Republicans en masse treated the two alternatives as stuff you can’t get. Once again, the obstreperous behavior of the GOP destroyed the dialogue.
“Had Democrats stuck to the original Democratic vision and built comprehensive health insurance on Social Security and Medicare, it would have been cheaper, simpler, and more widely accepted by the public,” wrote Reich. “And Republicans would be hollering anyway.”
In fact, the Republicans have been trying to destroy Social Security since FDR signed it on August 14, 1935. Taxes were collected for the first time in January 1937 and the first one-time, lump-sum payments were made that same month. Regular ongoing monthly benefits started in January 1940.
Medicare was attacked since it was signed into law by President Lyndon Johnson on July 30, 1965, in Independence, MO. It established Medicare, a health insurance program for the elderly, and Medicaid, a health insurance program for the poor. And the same chorus of benefits-haters went up in arms.
So it’s been in the middle of this political Punch and Judy show, bordering on hysteria, that Obama and the Democrats trusted the private insurance industry, thought it would do its part, and not keep stabbing them—and policyholders—in the back. True. Yet the Republicans took the lead in encouraging that betrayal. But that still doesn’t mean the Affordable Care Act doesn’t have its positive features, as Obama keeps saying in speeches. Unfortunately, with the president as the punching bag, the industry can keep doing what it has always done. Put profits first and health care last. Is anyone really fooled by that?
Jerry Mazza is a freelance writer and life-long resident of New York City. An EBook version of his book of poems “State Of Shock,” on 9/11 and its after effects is now available at Amazon.com and Barnesandnoble.com. He has also written hundreds of articles on politics and government as Associate Editor of Intrepid Report (formerly Online Journal). Reach him at email@example.com.