The current healthcare crisis is a major topic of discussion in America today. At first glance, mandatory healthcare looks like it would be advantageous for everyone, but is it worth what cost to the American people? To answer that, we must look closely at what mandatory healthcare means and where the funding comes from to pay for it. In 2010, former President Barack Obama implemented the Affordable Care Act, or Obamacare, greatly impacting modern healthcare insurance. In Obama’s 2009 speech to Congress about his healthcare plan, he addressed the three fundamental goals of the ACA “It will provide more security and stability to those who have health insurance. It will provide insurance to those who don’t. And it will slow the growth of healthcare costs for our families, our businesses, and our government.” -Barack Obama.
To put Obamacare simply, it requires that all adult Americans either get insurance or pay a tax. The first intention of this law was to make health insurance available to a greater sum of people. According to Healthcare.gov, an online insurance marketplace ran by the federal government, the law expanded health insurance coverage by expanding Medicaid, an insurance program that provides affordable coverage those in need. The law accomplishes the expansion by providing the poor with subsidies, money granted by the government. By doing this, those below the federal poverty level can afford health insurance on Obamacare’s insurance exchanges. Unfortunately, healthcare is not free. The subsidies have to be financed from somewhere.
So where do these subsidies come from? According to the Kaiser Family Foundation, an American non-profit organization that focuses on healthcare issues facing the nation, subsidies are paid for by higher taxes on health care providers and higher income families. Funding is also provided by lower reimbursement rates to providers from federally funded plans. When providers receive lower reimbursement rates for their services from federal programs such as Medicaid and Medicare, they have to compensate for their losses by charging higher rates to private insurance companies. In return, the private insurance companies have to compensate for their higher costs by charging higher insurance premiums to the individuals they provide coverage to.
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The Henry J. Kaiser Family Foundation is an American non-profit organization that focuses on major healthcare issues facing the United States.states that because most companies help pay for insurance premiums as part of the employee benefit, the cost of providing insurance to their employees has gone up as well. This has resulted in many companies limiting the amount of full time employees they keep and changing many positions to part time. These part time employees are now making far less money and having to subsidize their insurance with federal subsidies to pay for their mandated health insurance. The Kaiser Family is also known for having the most up-to-date and accurate information on health policy. KFF conducted a survey on health insurance premiums. In 2017, the cost of average family coverage premiums reached $18,764, a three percent increase from 2015.
In 2018, the average annual premium for an employer based family rose an additional five percent, coming to a grand sum of $19,616. This puts a greater burden on those that are helping fund the tax subsidies. Who funds these contributions? The middle class ends up funding a substantial portion of these subsidies through their own taxes, even middle class families barely making more than the federal poverty level. In 2017, The New York Times interviewed middle- class families about their current healthcare struggles and concerns. Sarah Stovall, an owner of a small software company, explained to Robert Pear, the interviewer, “I believe in the Affordable Care Act; it worked well for me under the Obama administration. But it’s not working as it was supposed to. It’s being sabotaged, and I feel like a pawn.”
Sara researched her healthcare options on Healthcare.gov, and found that her and her family couldn’t possibly afford any of the programs available. Subsidies are only available to consumers who meet the federal- poverty level, not middle class families, like the Stovals, a family of four, that only have an annual household income of $98,000. She told Pear, “We are not asking for free health insurance, just a chance to buy it.” Another example of those who suffer under Obamacare is the Griffith family. Ms. Griffith had a pre-existing condition, so her first pregnancy was not covered by her healthcare provider, costing her family $30,000 for the birth of their first child. Ms. Griffith explained that Obamacare did in fact help her with the birth of her second child in 2010, however, her and he husband, both self-employed, are expected to pay $32,000 dollars in premiums by the end of 2018.
Their annual deductible also quadrupled, coming to a grand total of $14,000. Jill A. Hanken, a health lawyer at the Virginia Poverty Law Center, stated that those who qualify for premium tax credits are discovering extremely affordable insurance plans with low premiums, and are thrilled. She however mentioned that “For people who don’t qualify for tax credits, the cost of plans has truly skyrocketed. They can’t afford it or don’t want to pay the high premiums.” Obama has acknowledged some of the major flaws in the Affordable Healthcare Act, such as the significant increase in premiums, and lack of competition in the federal marketplace, causing a major increase in consumers insurance rates.
In Obama’s 2016 speech to Miami, Florida, the former President outlines the negative impacts of Obamacare and offered solutions to America’s current healthcare crisis. His first solution is to have states like Florida and Louisiana expanded Medicaid, offering more Americans coverage, thus driving down premiums to those who seek coverage though the marketplace. His second recommendation is to use the money the government has saved via Obamacare, and spend those savings on providing middle-income families with more tax credits, hopefully making their premiums more affordable for families like the Stovals and Griffiths.
His third and final solution is the encouragement of states innovating their healthcare by providing a bigger variety of insurers for the people, hopefully preventing the monopolization of healthcare. After all is said and done, healthcare for all Americans is a wonderful concept. Very few would debate that all Americans should have access to medical care. Barack Obama built a strong foundation for America as a whole, but the government needs to continue to look for ways to fund the current program to make it affordable for the middle class without taxing too highly the very constituents it set out to help. Without figuring out the funding, the current program is not sustainable and many would find themselves uninsured once again.
