The Affordable Care Act—no gain without pain

The Patient Protection and Affordable Care Act of 2010, aka the Affordable Care Act, often referred to as “Obamacare” in derisive, scurrilous tones, is a complex piece of legislation having significant consequences for millions of people.

After the Obama administration took over in February 2009 the US acquired a new financial reform act that did very little to reform the money and banking system, which was generally satisfying to bankers and Republicans; little or no reform of indefinite detention and surveillance, which was generally satisfying to the military-industrial complex and Republicans; and a healthcare reform act, which is generally unsatisfying to insurance companies, hospitals, doctors and Republicans.

Whether the health care reform act, the Affordable Care Act, aka Obamacare, ever gets fully implemented remains to be seen; but, everything considered, it seems the Affordable Care Act is a significant achievement of the Obama administration. I think the president did the right thing refusing to appease Republican tea partiers in the US House of Representatives in the recent budget standoff, refusing to cut entitlement expenditures or change the ACA to prevent tea partiers from bringing on a debt default. The Affordable Care Act is the law of the land, approved by both houses of Congress and the Supreme Court, and all US senators and representatives, including petulant juvenile tea partiers, should uphold the law.

I doubt anyone fully understands the Affordable Care Act, considering the reasons why the act was written and passed, all its regulations, and its likely consequences. The government has by now printed thousands of pages of ACA instructions. For sure I have not read all this material.

As a former professor I have 35 years’ experience analyzing and discussing business policy cases with students, and those students often brought up some of their own cases in class similar to those in the casebook. Here is a student case that popped up in my mind as I wrote this essay: The student told the class he had an accident and was admitted to the emergency room of a hospital. He said his recovery process according to the hospital required about $30,000 in hospital, doctor, nurse, drug, and other treatments. The student was paying his own way through college with student loans and part-time jobs. Neither he nor his parents had health insurance. The hospital kept sending him monthly statements, demanding payment, and threatening to turn the bill over to a collection agency. He worried about what not paying the bill would do to his credit rating. Students in the class brought up similar experiences they had or heard about. The class decided he should do his best to forget about the bill and finish his degree.

The student was a good citizen doing his best to get a university education to prepare himself for a productive life, working and studying hard to make it happen, and here he was weighed down with this $30,000 hospital bill.

Cases like this have been happening to college students and US citizens of all ages and descriptions for decades. I recently saw a cartoon someone posted on Facebook showing a disheveled overweight middle-aged male in a crowded emergency room ranting at a receptionist that no socialist government could force him to buy health insurance, to which the middle-aged female receptionist calmly replied, “So, I gather you are here to get free medical treatment.”

One can find a plethora of website addresses dealing with healthcare problems on the Internet. Just ask Google questions like: How do doctors and hospitals establish prices for their services and treatments? What percentage of the US population has healthcare insurance? Why have Republican governors of red states refused to accept Medicaid extension under the Affordable Care Act? How does the healthcare system of the United States compare with healthcare systems of other rich nations? How much have healthcare costs in the US inflated relative to other costs, such as education, transportation, housing, etc.? How do health insurance companies set prices for their policies? How many companies sell health insurance in the US?

There are millions of posts on the Internet supplying data and information useful for answering these questions.

The Affordable Care Act is a stab in the dark unlikely to cure most of the ills of the healthcare system, most likely leaving about 20 million of about 60 million citizens uninsured before the ACA was passed uninsured, even if the ACA works as planned; but it seems to me doing anything is better than doing nothing.

The US health care system ranks about 8^th among rich nations around Earth in terms of overall quality. US citizens pay about 30 percent more for health care, including prescription drugs, than citizens of most other rich nations, and they get less for their money, living about one year less on average. Since 2000, US healthcare prices have inflated much more than prices for other goods and services, such as education, transportation, housing, etc., about 70 percent compared to less than 50 percent for most other goods and services.

The Clinton administration made a futile attempt to correct the healthcare insurance problem in the 1990s. The Bush II regime did little or nothing about health insurance. The Obama administration has at least got the ACA passed, however problematic its implementation, however uncertain its results. Apparently the ACA has already enabled thousands of citizens with pre-existing illnesses and conditions to obtain health insurance at fair prices, and thousands of college students and young adults can remain insured under their parents’ health insurance plans longer.

An immediate problem of ACA implementation is that Medicaid is supposed to get extended in all states so citizens with incomes above the poverty level, but under a higher income level, a level allowing a citizen or family to receive a federal health insurance subsidy, can get Medicaid health insurance. I have no idea why the ACA would have set these income levels in such a way they created a gap in which certain low income citizens were discriminated against, precluded from getting Medicaid or a subsidy to purchase health insurance, when those below and above them could; but it was apparently a serious mistake.

This gave the right-wing US Supreme Court an opportunity to hamper the ACA implementation by ruling in 2012 the federal government could not mandate that states accept the Medicaid extension. Consequently, red state Republican governors declined the Medicaid extension, resulting in about 5.4 million citizens in red states being unable to acquire health insurance, whereas about 4.6 million similar citizens lucky enough to live in blue states with Medicaid expansion are able to get health insurance.

Consequently, President Obama began a lobbying campaign with red state governors, starting with Texas (week of November 11, 2013), to plead with Republican governors to accept federal Medicaid extension money to enable the ACA to work as planned for 5.4 million low income citizens. Can you imagine the president of the US having to beg red state Republican governors to accept more federal money for industrial or military purposes in their states?

Some states such as Georgia have indigent care systems that reimburse hospitals treating indigent emergency room patients with funds matched by the federal government. If Medicaid extension had been accepted in Georgia federal dollars spent for the indigent care system could have been reduced, which means the governor is refusing federal money with one hand and perpetuating the need for it with the other, for the same problem—financially helping citizens who could not afford health insurance and the hospitals who must treat them in their emergency rooms.

Even if not accepting Medicaid extension money in red states should save US taxpayers a little money, any such benefit would be outweighed by the confusion and bureaucratic morass caused by not accepting the Medicaid extension money, and the indignities caused citizens forced to use an indigent care system instead of the Medicaid system.

Although Medicaid extension might be the most pressing immediate problem hampering implementation of the ACA, there are many others, including its website, where citizens are supposed to be able to find the least expensive health insurance company and policy in their areas. This computer system has numerous technical glitches, adding new aggravations and frustrations to those already fomented by the ACA. Most likely these glitches will be fixed in the next few months; but it’s highly unlikely the economic and political problems bedeviling the US healthcare system will ever be fully fixed.

Right-wing Republican ideologies, doctrines and fantasies are permanently enmeshed in the brain tissue of about half the US population in red states, and citizens wanting to be politicians in states and areas of the US where such citizens predominate must conform to Republican ideologies, doctrines and fantasies or not get elected. How can technical healthcare problems in such places be fixed when more than 50 percent of voters and politicians there only want to hear and talk about fighting socialism, keeping their guns, following and loving Jesus, fostering motherhood or lowering taxes?

Regardless of these cultural and class war issues, it seems it would be immensely helpful if US citizens in red states would dedicate a few hours of their lifetimes to consulting Google to learn facts for answering relevant questions about the US healthcare problem, simple obvious questions such as those I posed in this essay. Hopefully this would increase their propensity to vote for politicians who would help cure the US healthcare system.

The real cure for the US healthcare syndrome in the long run is a single payer system, such as other rich nations have, Medicare for all would probably do the trick, which could standardize and control hospital and medical prices for procedures and treatments for coping with or curing particular diseases and illnesses nationwide. One can build the case the healthcare industry is economically analogous to the electric utility industry. It is a natural monopoly and must be regulated by a government to maximize efficiency and effectiveness.

About all we can hope for in the short run is that the ACA shall bring about a greater good for a greater number. There are no free lunches in the worlds of economics and politics; there are always advantages and disadvantages resulting from any action, always tradeoffs, and, you guessed it, there is no gain without pain.

Unfortunately it seems more and more citizens in recent decades have gotten the idea into their heads they are special and should never be called upon to make sacrifices for the greater good, especially large US corporations, which are now people, thanks to the Citizens United Supreme Court case of 2010.

Richard John Stapleton is an emeritus professor of business policy, ethics and entrepreneurship who writes on business and politics at www.effectivelearning.net and on Facebook.