With the latest impasse looming between Democrats and Republicans in Congress and two vehicles making that impasse possible – first, the end of the fiscal year on September 30th and next the required increase in the debt limit in the middle of October – it’s time to ask the question, what would happen if the Republicans really did defund the Patient Protection and Affordable Care Act? The answer is that we would return to a situation where a substantial number of Americans would continue not to have access to health insurance, and where we would have a number of unfunded mandates. In short, it would not be good. But first, let’s answer the question, what is Obamacare?
What is the Patient Protection and Affordable Care Act?
The Patient Protection and Affordable Care Act (111 P.L. 148, and better known as “Obamacare”) is a very lengthy (906 pages) and complicated bill, the centerpiece of which is the attempt to insure that all Americans have access to health insurance, either through the “individual mandate” or the “employer mandate.” The bill was signed by President Obama on March 10, 2010, after a lengthy legislative battle, and although the major provisions will be effective by October 1, 2013, there are still some provisions that will not become effective until January 2020, such as the “donut hole” in Medicare Part D coverage. It’s complicated.
Although it would be far too ambitious to summarize the statute here, the salient parts of the statute include at least the following:
- Provisions prohibiting insurers from denying coverage to patients for pre-existing conditions, and provisions allowing children to stay on their parents health insurance until age 26.
- The “individual mandate,” which requires all adults not covered by employer-sponsored health insurance or by Medicare or Medicaid to buy their own health insurance through a Health
- Insurance Exchange. Individuals who fail to comply will be penalized through penalties enforced through the Internal Revenue Service; low-income families will have their purchases subsidized.
- The “employer mandate,” which requires firms of 50 or more full-time employees to offer health insurance or pay a “shared responsibility requirement” helping to underwrite the cost of health insurance offered through the Health Insurance Exchanges.
- Reforms to both Medicare (health insurance for retired people) and Medicaid (health insurance for poor people) that expand their coverage and availability.
The chief features of Obamacare were adopted from a statute enacted in Massachusetts in 2006 under then-Governor Romney, which also included both individual and employer mandates. This law, Chapter 58 of the Acts of 2006 and dubbed “Romneycare,” was itself modeled on proposals made by the Heritage Foundation after the failed efforts of the Clintons to enact universal health insurance during their administration. In fact, they were penned in 1989 by Stuart Butler, then the Foundation’s health care expert in a brief entitled “Assuring Affordable Health Care for All Americans,” and argued, in effect, that requiring Americans to acquire health insurance was not different from requiring drivers to acquire liability insurance.
What Happens to the Uninsured Now?
Since the “mandate” provisions of Obamacare won’t even begin to take effect until the beginning of October, the question arises, what happens to the uninsured in the United State now? Where do they get their health care?
Primarily, the uninsured get their health care in emergency rooms. Back in 1986, Congress passed a bill called the Emergency Medical Treatment and Active Labor Act (“EMTALA,” part of the Consolidated Omnibus Budget Reconciliation Act, or “COBRA”), which prohibited hospitals receiving Medicaid from refusing to treat patients coming into their emergency rooms. Getting your health care in an emergency room is a bad idea for two primary reasons:
- First, it’s the most expensive possible place that you can get health care;
- Second, people who get their health care through emergency rooms don’t do any preventive health care. They don’t show up for otherwise treatable conditions until they have a serious problem.
If we don’t care about the people seeking treatment in emergency rooms for their sake, we should at least care for what it does to our own health insurance rates. Because the money for all this free care has to come from somewhere, and where it comes from is our health insurance rates. I don’t know how this system works in all other states, but in Massachusetts we used to have something called the “Uncompensated Care Pool,” to which all hospitals contributed. The hospitals who spent more of their money treating the poor and uninsured – known as “disproportionate share” hospitals – would receive money from the pool, and some reimbursement from the federal government, to compensate them for some of this free care. But don’t doubt for a moment that the cost of uncompensated care was also reflected in what all the hospitals charged the rest of us for the care that they do provide. In the end, there is no free lunch.
At last count, just shy of 50 million Americans (or a little over 16%) don’t have health care. In Massachusetts, seven years after the enactment of Romneycare, the figure is estimated to be about 3%. In the Scandinavian and other West European countries the figure is down to 0%, but that is a Nirvana which we here can’t yet hope to achieve.
Why do Republicans Hate Obama care so Much?
So if the individual mandate was a Republican idea, why do they now hate Obamacare so much? Really for two reasons:
- First, it’s a government program;
- Second, it has Obama’s name on it.
The individual mandate is not an ideal solution to universal health insurance, and it’s not a solution that other nations have adopted. Personally, I don’t like it much, and it hasn’t found much favor with the rest of the country either. But it has worked in Massachusetts. The insurance industry – which was so opposed to the Clinton healthcare initiative that for a year they broadcast the famous Harry and Louise commercials to oppose something that hadn’t even found legislative form yet – wants it because they need the young and healthy as ballast for the costs of the old and infirm. Insurance works best if everyone is participating. Same with social security.
On the Sunday news circuits I heard two objections to Obamacare from the Republican side:
- The first was that it wasn’t a bipartisan bill since no Republican had voted for it;
- The second was that it’s a “job killer.”
The first objection is really a joke, since the Republicans announced ahead of time when the bill was being debated in late 2009 and early 2010 that there was nothing much that the Democrats could do – short of scrapping the bill altogether – that would bring them onboard. They took their toys and went home, and now they’re complaining that they didn’t get to play. Shame on you, Republicans, for even offering that argument. (Note that if Obamacare were to be defunded the Republicans haven’t offered any alternative for what to replace it with. The uninsured would simply stay uninsured.)
The second objection, that Obamacare would be a “job killer,” is really predicated on the employer mandate and the requirement that firms having 50 or more full-time employees needed to provide health insurance. And sure enough, there have been some stories in the news about a few Subways franchises and other smaller employers deciding to make some full-time positions thirty hour positions so that they don’t qualify under the mandate. This is a concern, but doesn’t make the bill a job killer. First of all, reducing somebody’s hours from full-time to thirty hours doesn’t actually “kill” the job. But I would agree that tying health insurance to employment – as we do in this country – is problematic. The fix for that is a single payer system, which is, of course, anathema to the Republicans. In any case, the number of jobs that might be killed by this particular aspect of Obamacare is far less, as has been ironically noted in the news, than would be killed by a government shutdown or a default by the United States on its debt obligations. One could also require pro rata contributions by employers who shift full-time workers to part-time, or find other legislative solutions. If the Republicans wanted to play ball.
Single Payer and Other Systems
There are, of course, other solutions for how to provide universal health insurance, and the one most favored by progressives, is the single payer system. If you think that single payer is tantamount to socialism, consider that social security is a single payer system. And social security was implemented when the system of private company-sponsored pensions broke down during the great depression. That was another system where an important social benefit was tied directly to employment. Today, nobody is suggesting a return to company-sponsored pensions as an alternative to social security.
Two other countries are demonstrative of how else major democracies provides universal health insurance for their citizens. In Britain, and particularly England, health insurance is provided through the National Health Service; insurance is not dependent on employment. Although centrally funded, the system is actually administered through Strategic Health Authorities. England also has a private medical insurance sector that people can buy into or that some employers provide for providing additional benefits over and above those provided by the National Health Services.
Similarly, Germany – which has a universal health insurance system so old that it does back to the days of Otto von Bismarck – provides universal coverage not through a single payer system but through a network of 1100 providers. Germany has two types of insurance: mandatory health insurance (“Gesetzliche Krankenversicherung”) and private health insurance (“Private Krankenversicherung”) for those who can afford and want to opt out of the public system, or are self-employed. Germany’s system is compulsory insurance is generally funded through joint employer-employee contributions. The unemployed are not left out, as their care is covered through the Sozialamt.
England and Germany are good examples of universal health systems that have evolved in their own way, and proof positive that not all universal systems must be “cookie cutter” in order to work. The important point is that, unlike in America, England and Germany’s citizens do not go bankrupt trying to pay for their health care costs. The provision of health care in either case is part of a social contract.
The Politics of Ultimatum
In the last several years the Teaparty wing of the Republican party has been practicing the politics of ultimatum. They’ve been doing this by attaching ultimatums to bills that are necessary to keep the government afloat, and which have never been the subject of controversy before. Bills like raising the debt ceiling and budgetary continuing resolutions. This kind of brinksmanship is designed to impose the will of the minority on the will of the majority, and is setting new precedents that may have bad repercussions in the future. If they succeed, every minority will want to start using them, and the gridlock that we now will become permanent and unyielding on both sides.
The federal government was shut down once before when the Republican Congress forced the issue with President Clinton at the end of 1995. Their was a short shut-down of four days in mid-November and a second and longer shut down that lasted 24 days, from mid December 1995, through the beginning of January 1996, in a clash over the 1996 federal budget. It wasn’t an unmitigated disaster, but the shutdown definitely did not help the economy. It the federal government cannot raise its debt limit in mid-October, that could be an unmitigated disaster. It would call into question, for the first time in history, the full faith and credit of the United States. The world economic system is a house of cards, and in part it works because we trust in the promises that have been made. The United States’ full faith and credit is a major promise. Pull that card away, and the consequences are hard to predict.
The Republicans will want you to believe that this is just a normal negotiating tactic, that they’re just standing up for their principles. Don’t you believe it. Just as they turned the filibuster into a mockery of a once sensible process, these negotiating tactics are not normal, or conducive to achieving reasonable results. If you’re in a relationship with an alcoholic and you’re a co-dependent, the equation is not balanced. First, the alcoholic has to deal with the big problem: they have to stop drinking. Then the co-dependent can deal with their much smaller problem. Right now the Teaparty Republicans are like the alcoholics (and they’re tearing their own family apart); the Democrats, we’re the codependents, enabling this completely reckless behavior.