Eight years ago newly elected President Barack Obama initiated a complex process to make a paradigm shift in the U.S. health care system. The objective was to provide health insurance for more people. In other words Democrats wanted to solve a health care problem.
After numerous hearings, debates and amendments Congress passed the Affordable Care Act known as Obamacare and it was signed into law in 2010. Not one Republican voted for it. This was probably due to Senate Minority Leader Mitch McConnell (R-Ky,) who didn’t want to give Democrats any chance to call this legislation bipartisan.
The narrative that Republicans spread was that the law was “crammed down our throats.” They claimed that the GOP was shut out of the process and had no opportunity to participate in crafting the law’s provisions. They also characterized Obamacare as a government takeover of health care. All of this was mostly false but with the help of the right-wing media and wealthy conservative backers, their misinformation prevailed.
The whole idea of insurance is spreading the risk over large populations. This is true for homeowners insurance, auto insurance and so on. For example, I have never filed a claim on my homeowners insurance in over 40 years yet my premiums have paid for a lot of claims by others. The same is basically true for my auto insurance, which I am required to maintain by state law.
I have always thought of Obamacare as a health insurance regulation rather than a government program like Medicare. But the law is so complicated that very few pundits or politicians have a clear understanding of how it works and neither do those who benefit from it.
One of the simplest and best explanations of Obamacare was provided by Paul Krugman in a recent New York Times article entitled “Three Legs Good, No Legs Bad.” In this article Krugman explained that Obamacare is like a stool with the following three legs:
1. Insurers must offer the same plans to everyone at the same prices, even those with pre-existing conditions.
2. Everyone is required to have health insurance or pay a penalty (the individual mandate) and all policies must cover 10 essential health benefits, including hospitalization.
3. Government provides subsidies to help those with lower incomes purchase plans and those with really low incomes are provided insurance through an expanded Medicaid program mostly funded by the federal government.
Leg one spreads the cost of medical care across those who are healthy and those with pre-existing conditions, which adds stability to the insurance markets. Let’s face it, insurers don’t care if everyone has health insurance, their main objective is making a profit. They need more healthy people paying premiums to offset the cost of medical expenses for those who aren’t healthy in order to do that. For them it is just that simple.
Leg two is designed to make sure more healthy people buy health care policies and that those policies are not skimpy plans that really aren’t much better than no insurance at all. Leg three provides resources so that those with lower incomes can afford to buy plans and insures that those who could not afford plans even with subsidies will have health insurance.
Needless to say, if one leg of a three legged stool is removed it will collapse. The same is true of the Obamacare legs. Conservative Republicans understood this so they attempted to remove these legs via strategic legal attacks. Their most serious challenge was to the individual mandate that required everyone to have health insurance. It narrowly failed in the Supreme Court.
Today, after seven years of failed attempts to defeat Obamacare, conservatives are about down to the last chance they will have this year to get the job done. Their vehicle is the Senate’s Better Care Reconciliation Act (BCRA).
Although this bill will not fully repeal Obama’s law, it will do serious damage to it. Opponents who have a flair for the dramatic might say that those with pre-existing conditions, many older adults and the poor are standing on Obamacare’s three legged stool with a noose around their necks. These detractors believe that the BCRA will kick the stool out from under them.
Their fears are probably well founded. The BCRA includes an amendment by Sen Ted Cruz (R-Texas) that would allow insurers to offer bare-bones policies so long as they offer one Obamacare qualifying plan. This would eliminate leg one and the part of leg two that requires plans to cover essential benefits. Other parts of this Act repeal the individual mandate of leg two, lower the subsidies of leg three and cut $772 billion over 10 years from its Medicaid funding.
We must wait for the Congressional Budget Office score next week to more fully assess the damage the BCRA will cause to the U.S. health care system but I think it will be extensive.
Congressional Republicans promised to have Obamacare repealed and replaced within weeks after Trump was inaugurated. Yet the process has dragged on for almost six months. There are good reasons for the difficulties. Republicans are not trying to solve a health care problem; far from it. They are trying to solve a political problem with their supporters and eliminate the Medicaid program as it currently exists.
I think this tells us all we need to know about the BCRA.