The “bad” parts of Obamacare (PPACA) are the result of vague language in the law that can be interpreted in many ways. Obamacare (PPACA) The Bad does not advance Affordable Health Care and Beyond for ALL Americans.
An interesting exercise would be to go through the law and remove all obvious special-interest passages along with all wordage that does not advance patient protection or patient affordability. In this appreciably shorter document, many of the “bad” parts of Obamacare (PPACA) would be gone.
Obamacare (PPACA) The Bad serves the goals of income preservation and profit maximization for the businesses that make up the healthcare industry. In crafting regulations and related tax codes that serve government “program” preservation at the expense of individual Americans, our government willingly abets these financial business goals.
Through Obamacare (PPACA), our government recognizes that healthcare costs are too high but does not seek to reduce total health spending in any meaningful large-scale way. Health care affordability for patients can only be accomplished by decreasing the TOTAL cost of health care and/or by INCREASING patient wellness so that fewer health care services are needed!
Four Obamacare (PPACA) The Bad Categories
Let’s look at four general “Bad” aspects of Obamacare (PPACA) I have identified.
- The single biggest failing of Obamacare (PPACA) is that it does not address total PATIENT affordability. Household income has not kept pace with decades of out-of-control healthcare inflation and this increasingly unaffordable situation is not addressed in the law. Inefficiencies within the healthcare system are allowed to continue with only token measures to slow the future growth of health inflation. The previous decades of excessive health inflation are not addressed. In addition, Obamacare (PPACA) addresses only one component of health care affordability –the cost of the health insurance premium for primary health insurance. This “affordability” measure serves to herd Americans into lower premium (higher cost-share, tighter network) health insurance products that take the burden of health insurance costs off employers and onto sick individual Americans. The law and its regulations do not address the increasing burden of patient cost share and out-of-network costs. Vision, dental, over-the-counter medical supplies/medications, and long term health care costs are also not included in the “affordability” calculation. All these “extra” health care costs must be absorbed by the individual American from spare cash.
- The regulations, definitions, and mandates in Obamacare (PPACA) are not applied to all health insurance plans uniformly. Yet another example of dividing Americans into “groups” with different benefits and rules. Grandfathered plans do not have to follow any Obamacare (PPACA) reforms. Large employers have to provide health insurance coverage but small employers do not. Self-insured, employer-sponsored health plans have fewer Obamacare (PPACA) requirements than the same plan being offered by an insurance company (fully-insured). In addition, self-insured plans are not subject to individual state laws and regulations (only the Employee Retirement Income Security Act of 1974 (ERISA) rules apply). These different rules create paths for exploitation and many employers are turning to self-insurance to get around some of the rules (81% of covered employees at large companies (greater than 200 employees) are self-insured).
- Obamacare (PPACA) does not define one minimum Essential Health Benefits (EHB) requirement for all Americans. Most reform measures and protections rest on a broadly-defined (10 categories) minimum Essential Health Benefit (EHB). By leaving the EHB specifics (benchmarks) to each individual state and employer (for self-insured plans), American health care coverage will vary by geography. If a state chooses a “stingy” reading for EHB, then its residents will suffer higher total out-of-pocket health spending than will residents in a state where the reading is more “generous”.
- The Obamacare (PPACA) taxes and fees will not solve the structural problems that plague our healthcare system and these extra costs will simply increase the unaffordable health care burden already overwhelming individual Americans. The insurance coverage provisions for Health Insurance Marketplace subsidies and Medicaid expansion are projected to cost over $2 trillion over the next ten years and various revenue streams have been included in the law to pay for the added costs. These taxes, fees, and tax changes fall into four categories given below:
- A series of new taxes were enacted because our government doesn’t have the political will to attack the high costs of health care head on by reforming HICUP members. These taxes include the Blue Cross/Blue Shield tax Hike, Tax on Brand Name Drugs, Tax on Health Insurers, the excise tax on Charitable Hospitals that fail to comply with the requirements of ObamaCare (PPACA), and the 2.3% Tax on Medical Device Manufacturers.
- Taxes and reforms have been added that serve to reduce the health benefit coverage that most Americans enjoyed pre-Obamacare (PPACA) and increase their out-of-pocket costs. These taxes and reforms include the 40% Excise Tax “Cadillac” on higher cost health insurance plans starting in 2018, the elimination of the tax deduction for employer-provided retirement Rx drug coverage in coordination with Medicare (Part D), the reduction in tax-free FSA contributions to $2,500 from $5,000, and the removal of over-the-counter medicines (without prescription) from the list of qualified medical expenses in pretax health spending accounts (FSA, HRA, and HSA). In addition, people who itemize medical expenses on their taxes must now exceed 10% (previously, 7.5%) of their adjusted gross income for the year to get a deduction.
- Penalties and taxes have been added that force employers to keep employer-sponsored health insurance as the backbone for the US healthcare system (fines of $2,000 per employee would be levied on businesses with 50 or more workers if any employee received an insurance subsidy from the federal government)
- Taxes and tax changes have been added that fall under the “soak the rich” heading–$500,000 Annual Executive Compensation Limit for Health Insurance Executives, Medicare Tax on Investment Income of 3.8% for those making over $200k/$250k, and a Medicare (Part A) Tax increase of 0.9% for those making over $200k/$250k.
Summary of Obamacare (PPACA) The Bad
“The “Bad” in Obamacare (PPACA) is anything that doesn’t advance Affordable Health Care and Beyond for ALL Americans in a straight-forward and simple way. “Patient” affordability measures in Obamacare (PPACA) are not addressed and many provisions in the reform law are not evenly applied to all Americans. Obamacare (PPACA) does not tackle the politically-difficult structural inefficiencies within our healthcare system that are the foundation for high TOTAL cost of health care. The end result is that more of the cost of health care is passed onto individual Americans when they are sick and most vulnerable. This approach is “bad” and needs to be fixed. Each of these general “bad” parts of Obamacare (PPACA) will be described in greater detail in future blog posts. I invite comments and additions to the list above.