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During his first year in office President Obama decided to tackle a problem that had frustrated previous presidents: universal healthcare. Harry Truman, Richard Nixon, Jimmy Carter, and Bill Clinton had all proposed plans for a universal health insurance program, but none of them were able to make them part of American law. From 2009-2010, the U.S. Congress debated the feasibility of having a universal healthcare system and in March 2010, President Obama signed the Affordable Care Act (ACA), also known as Obamacare, into law. President Obama’s push for universal healthcare was assisted by the Democrats having a filibuster-proof majority in the Senate and a majority in the House, but opposition to the ACA from voters played a role in giving the Republicans control of the House in the 2010 midterms. After several years of planning, the ACA has begun its rollout, but extempers are likely aware that elements of this rollout have been botched, notably on the government’s healthare.gov website which is supposed to a portal for citizens of thirty-six states to shop for health insurance. President Obama has also used his executive powers to delay mandates in the law, which are currently being challenged in the court system as a usurpation of legislative authority. Due to the politics of the ACA and questions about its implementation, extempers will be handling questions about the ACA for seasons to come.
The ACA has been the subject of many rumors, misinformation, and distortions since it was formulated and passed into law. This confusion about the law has made implementation difficult and made it difficult for President Obama to rally public opinion behind the law. This confusion has also affected extempers, who may be unsure about the intentions of the ACA and what it does. This topic brief will not stake out a political position on the ACA because it is Extemp Central’s belief that these topic briefs should provide you with enough information to reach your own conclusions. Instead, this topic brief will break down the reasons why the ACA was implemented, what the ACA does, arguments and complaints made by liberals and progressives in the Democratic Party over the legislation, arguments and complains made by conservatives and libertarians in the Republican Party over the legislation, and provide some tips for handling future questions on the ACA. It is our hope that after reading this brief you will have a better understanding of the ACA and be more confident when speaking about it in future rounds.
Readers are also encouraged to use the links below and in the related R&D to bolster their files about this topic.
Justifications for Affordable Care Act
The topic of universal healthcare was a prominent subject in policy debates during the 1990s and 2000s. The idea continually emerged in Democratic presidential campaigns and became a long sought after goal of the party on the national level. As was indicated in the preview of this topic brief, after the Second World War there was a push by several presidents, mostly Democrats, to enact a universal healthcare system. However, owing to Congressional opposition and opposition from health insurance companies these policies never became law. In 1994, President Bill Clinton attempted to use a Democratic majority in Congress to pass his version of healthcare reform, which he put his wife Hillary in charge of. However, the legislation was largely created behind closed doors and Congress chaffed at the way the Clintons tried to work around Congressional leadership to formulate the legislation. As a result, “Hillarycare” suffered a defeat and it played a large role in the “Republican Revolution” of 1994, where the Republicans under Newt Gingrich took control of the House of Representatives and also took control of the Senate. The failure of Clinton’s healthcare initiative also forced him to move towards the political center for the remaining six years of his presidency, which saw him sign the Defense of Marriage Act (DOMA) and welfare reform prior to the 1996 presidential election.
The justification offered by liberals and progressive forces for a universal healthcare system during the 1990s and 2000s is that the United States healthcare system is the most complex in the world since it involves a variety of federal healthcare programs like Medicare for the elderly, Medicaid for the poor, the Indian Health Service for Native American tribes, employer-based healthcare coverage, and an individual market for those who cannot obtain healthcare at their job. Employers during World War II began to offer healthcare coverage in order to entice employees to work for them and to also give employees a reason to stay with the company and not leave, since an employee who left would forfeit their health insurance. However, by the end of the twentieth century some companies began dropping health insurance for their employees due to soaring costs, which contributed to the rising number of uninsured Americans. Estimates in the 1990s and 2000s pegged the number of uninsured Americans between forty and fifty million people, which is about one-sixth of the country’s population. Some of these uninsured were those who had pre-existing medical conditions that could not obtain insurance because insurance companies did not want to pay for their higher medical bills, which would be bad for their company’s bottom line. Other elements of the uninsured were young people who did not want to have health insurance because they did not see the need since they are typically healthier than other segments of the population. Finally, others want health insurance but could not afford the monthly premiums to obtain coverage for themselves and/or their families. Liberals and progressives considered it to be an affront to American values that nearly one-sixth of the population lacked affordable healthcare and they believed that it was a basic human right.
Another argument for enacting a universal healthcare program is that America’s healthcare system compares poorly with other nations, especially those in Europe that have universal healthcare programs. For example, Great Britain had the National Health Service (NHS), which is the country’s publicly funded healthcare system. The NHS was established via taxes on the wealthy after the Second World War by the Labor Party and the program enjoyed widespread support because wealthier British citizens had Nazi and fascist sympathies prior to the outbreak of the war. Other countries like those in Scandinavia also have universal health insurance programs, which are funded through heavy taxation, but this provides “free” medical care for citizens (the word free is in quotation marks because citizens pay for these programs through taxations, so they are technically not free). Bloomberg News on August 19th provides a helpful chart for comparing the U.S. healthcare system with other nations. In terms of healthcare efficiency, the United States ranks forty-sixth in the world, behind nations like Japan, Cuba, Libya, and Bulgaria. The U.S. also ranks twenty-third in the world in terms of life expectancy for its population, which is embarrassing since the U.S. ranks first in the world in terms of healthcare cost as a percentage of GDP, which is 4.2% higher than the Netherlands, which is the second highest placing country in that category. The liberal and progressive argument was that America paid more for healthcare than other nations in the world, yet the quality and outcomes of care were less than other nations that had universal healthcare systems.
The imperative for a universal healthcare system is what caused President Obama to push for healthcare reform early in his first term. Although he could have pushed other measures like card check for unions, immigration reform, statehood for the District of Columbia, and other liberal priorities, the President decided to use his political capital on healthcare reform because he realized that the Democrats filibuster-proof Senate majority, solidified when Pennsylvania Senator Arlen Specter switched parties, presented a unique opportunity to enact the program. While President Obama succeeded after a bruising political battle in getting the Affordable Care Act signed into law, he was later criticized by political moderates for not paying enough attention to the economy, which was suffering the effects of the Great Recession, and this played a role in Republican gains in the 2010 midterm elections that eliminated the Democratic majority in the House and eliminated the Democratic Party’s filibuster-proof majority in the Senate.
What the Affordable Care Act Does
One thing that extempers need to take note of is that the ACA does not truly establish a publicly funded healthcare model. Instead, it is a compromise measure that combines elements of conservative free market ideology and progressive state-run ideology. For example, private insurance still functions under the Affordable Care Act, although the government sets conditions for what insurance policies have to cover. Private insurance companies still enjoy their markets at the state-level as healthcare.gov, the federal online health insurance exchange (market), or state-run exchanges provide customers with policies that are accepted by doctors within their states. The federal government has encouraged states to expand Medicaid enrollment under the ACA, but the Supreme Court ruled in 2012 that states cannot be forced to expand Medicaid enrollment. Nevertheless, the Medicaid expansion underway constitutes the largest healthcare assistance to the poor in American history. Therefore, the ACA is not a European-style healthcare model because there is still technically competition on the insurance exchanges and not everyone is being funneled to one public provider for healthcare. Some liberals and progressives wanted this, but I will discuss that when breaking down their attitudes toward the ACA.
Democrats in the Senate have a great write-up on the tenets of the ACA and I highly recommend that extempers read it and cut it for their files. It breaks down the goals of the ACA and provides details on how healthcare coverage is going to be expanded to more Americans. National Public Radio also provides a list of questions and answers on the ACA in an article on December 18th, which extempers should also cut for their files.
The goal of the ACA is to provide a shared American insurance exchange that makes most Americans purchase health insurance. This is called the “individual mandate” and the Supreme Court ruled in 2012 that this was constitutional as a tax. The idea is that by making everyone purchase health insurance that the cost of health insurance will remain affordable for sicker and older elements of the population. Insurance functions as a way to limit high medical costs. As a customer you pay a monthly premium to maintain your coverage. Many plans have what is called a deductible, which is the amount of money you have to pay out of pocket before the insurance kicks in. For example, you may have a health plan with a $200 a month premium and a $5,000 deductible. What this means is that you have to pay the insurance company $200 a month to maintain your coverage and then you are responsible for the first $5,000 in medical expenses. After that, the insurance company will pay the rest. This shields you from unforeseen medical disasters or events that could put you in the hospital for several days, weeks, or even months. The problem with insurance pools is that if only sick and old people sign up for insurance then premiums increase because the insurance company is going to be paying out more costs to treat these people that have more medical problems. As a result, the insurance company increases premiums to offset these expenses. By mandating that everyone have health insurance, the ACA is meant to keep premiums low as “young invincibles” buy health insurance that they will rarely use, thereby keeping the costs down for other populations that use more healthcare in the system.
If someone decides not to purchase health insurance then they will be assessed a penalty on their taxes. In 2014 the penalty for not having insurance is $95 or 1% of total income, whichever is greater. The penalty increases to $495 in 2015 and then goes to $750 in 2016 or 2% of total income. After this, fines are increased based on cost of living adjustments. You might wonder how the federal government is going to see who has health insurance and who does not and the answer to that is that the Internal Revenue Service (IRS) is the enforcement arm. This is why thousands of IRS agents were hired after the ACA was passed. Americans will receive a certificate from their insurer that they will put on their tax forms, which will let the government see if people have appropriate health insurance. If one does not have this, then they will be assessed the fine. One of the misnomers about the ACA is that if people do not pay the fine then they are going go to prison. This is not true. The fine will be assessed on an individual’s tax return, but this can only be on an individual’s tax refund. Therefore, if you do not get a tax refund then technically you do not have to pay, although the IRS has the power to carry over the fine to subsequent tax returns and has ten years to collect. However, the IRS under the ACA does not have the power to go into someone’s bank account or put a lien on their property to collect the fine. They could sue you, but this is unlikely since it would take too much time to collect less than $1,000.
There are some ways that individuals can avoid purchasing health insurance and avoid paying the fine. The ACA provides hardship exemptions for those who are homeless, have been evicted or face evictions from their residences, face the loss of their utilities, are victims of domestic violence, have experienced the death of a close family member, are victims of a natural or “human-caused” disaster, and/or filed for bankruptcy in the last six months.
Under the ACA, insurance companies have to modify some of their existing practices. They can no longer deny those who have pre-existing conditions from getting insurance and they must allow Americans that are twenty-six or younger to remain on their parents insurance. Insurers must also cover “ten essential benefits” that include ambulatory services, emergency services, hospitalizations, maternity care, mental health and substance abuse disorders, prescription drugs, rehabilitative services and devices, lab services, preventive and wellness services, and pediatric services. This is why some Americans are losing their health insurance because their older plans do not comply with these mandates, although President Obama has granted a waiver for some older plans for another year. An exception to this is available for Americans under the age of thirty, who can purchase catastrophic health insurance coverage that has a $6,400 deductible, but lower premiums. The ACA also caps out-of-pocket costs for individuals, which the law sets at $6,350, and for families, which is $12,700. However, monthly premiums are not subject or count against this cap.
To purchase health insurance coverage, people have a variety of options. The first is to visit a federal or state-run insurance exchange. When the ACA was passed it was assumed that all states would run their own online insurance exchanges, but many Republican governors refused to do this, which forced the federal government to set up an online insurance exchange for them. To date, thirty-six states are not running their own exchanges, so healthcare.gov is the portal where people from these states have to go in order to purchase health insurance coverage. States that are running their own exchanges are California, Oregon, Washington, Idaho, Nevada, Colorado, Minnesota, Kentucky, New York, Massachusetts, Rhode Island, Connecticut, Maryland, Hawaii, and Washington D.C. While the federal government has had problems with healthcare.gov, the states that have run their own exchanges have typically had fewer problems. For example, Kentucky’s exchange has become a model for other states and the federal government. After entering personal information and your anticipated yearly income, the exchange someone uses will show them their options for health insurance. The exchanges have four different types of plans: platinum, gold, silver, and bronze. Platinum plans see the insurer pay 90% of medical costs, but they typically have higher premiums than bronze plans, which sees the insurer pay 60% of medical costs. The insurer pays 80% of the medical costs in gold plans and 70% in silver plans. Those who make less than 138% of the federal poverty line between the ages of 19-65 will be eligible for Medicaid and will be encouraged to enroll in that if their state is expanding Medicaid. States that agreed to expand Medicaid include Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Washington D.C., Hawaii, Illinois, Iowa, Kentucky, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New Jersey, New Mexico, New York, North Dakota, Ohio, Oregon, Rhode Island, Vermont, Washington, and West Virginia. Indian and Pennsylvania plan to do it after 2014. Under the ACA, the federal government is paying 100% of the expanded coverage between 2014-2016 and 90% thereafter, but some states like Texas fear that it could limit their state budgets in future years and have refused to expand Medicaid. Since states can choose whether to expand Medicaid or not, this will hinder the ability of some poorer Americans in these states to obtain healthcare coverage. Extempers are urged to visit the Henry J. Kaiser Family Foundation for a chart on Medicaid expansion, which they published on December 11th.
So what about those Americans who cannot afford the premiums on the exchanges? This is a good question and the ACA provides federal subsidies (payments) to offset the cost of premiums for those Americans that make between 100-400% of the federal poverty line. This is $11,490-$45,960 for an individual and up to $88,000 for a family of four. The subsidies exist on a sliding scale, so those who are on the cusp of being above 400% of the poverty line will receive a lower subsidy than those who are just above the 100% mark of the federal poverty line. Some individuals can also receive deductible assistance if they make less than two and a half times the federal poverty level, which is $28,725 for an individual and $58,875 for a family of four. You might wonder if someone can try to “game” the system on their insurance form by estimating their yearly income is lower when they sign up for health insurance to get a higher subsidy, but the IRS will check this at tax time by looking at your income level and the subsidy that you have received. If someone tries to undervalue their income to receive a subsidy they will end up owing that subsidy back to the federal government from their tax refund. Therefore, subsidies are meant to help those who cannot afford health insurance coverage by reducing its cost for those who do not qualify for Medicaid.
One other clarification about the ACA is that people believe they can avoid getting coverage until they get sick. This is not true. Each year, the federal government and the states will have an “open enrollment” period for health insurance where people have the option of selecting their health insurance plans. This period will typically run from October to late December, although the first year of the ACA goes from October 1st to March 31st (which is the period that we are in right now). If someone does not purchase health insurance by March 31, 2014 then they will not have the ability to get insurance on the exchanges until October 1, 2014 and they will be subject to the fine and will not have healthcare coverage until open enrollment opens again.
The law also has an employer mandate, where employers have to provide health insurance to employees if they have over fifty employees that are working more than thirty hours per week. Those employers that do not provide their employees with suitable coverage according to the ACA will be fined $750 per full-time employee. Some employers have begun cutting back employees hours in anticipation of the ACA mandate, although the scale of these cut backs is disputed among liberals and conservatives. Small business owners have complained about the cost of compliance with the ACA mandate and that the insurance they will have to provide is unaffordable. Concerns about more people losing their insurance with the employer mandate, since older policies offered by businesses would not be ACA-complaint, has led to the Obama administration to delay enforcement of it for one year, a move that has created a lawsuit against the administration which alleges that it does not have the authority to do this. The mandate will go into effect in January 2015 instead of the coming year, as initially anticipated. However, it is anticipated that tens of millions could lose their existing business coverage when the employer mandate goes into effect because the law’s “grandfather provision” that extends plans will not protect them beyond 2014.
Controversially, the law prohibits gender rating in health insurance, which means that men and women cannot be assessed different premiums based on their gender. Typically, younger women use healthcare more than men because of maternity issues and women typically paid 50% more for insurance before the enactment of the ACA. The Denver Post on October 25, 2009 pointed out that before the ACA there were eleven states that prohibited gender rating: California, Maine, Massachusetts, Montana, Minnesota, New Hampshire, New Jersey, New York, North Dakota, Oregon, and Washington. While women’s groups hail this as a victory, it has antagonized men who argue that they should not have to purchase policies with maternity care since they are biologically not programmed to have children. However, the economics of the law mandate that this must occur in order to keep care affordable for women on the exchanges. The law also prohibits insurers from charging the old and sick more than three times that cost of plans offered to young and health Americans, which also creates a problem because this distorts some of the “free market” of health insurance pricing. As a result of this restriction, which is again grounded on the basis of making care affordable for the sick and the old that do not qualify for Medicare (which all Americans over 65 are enrolled), premiums for younger and healthier Americans are higher than what they would be under a free market system.
Some of the opposition to the ACA comes from Americans who do not like the premium rates in the plans they are offered and also find that they limit their choice of doctors. This is true in certain cases. It is possible that a consumer might find reasonably priced insurance on the exchange, but certain doctors may not accept the insurance or might be considered “out of network.” This means that the doctor might accept the insurance, but the insurer will not cover as much of the cost if that consumer visited an “in network doctor.” Since President Obama told Americans that if they liked their doctor that they could keep them, this has been a political disaster for the President and it was labeled as “the lie of the year” by many media outlets. Americans that are put onto the Medicaid rolls may also find that their choice of doctors might be limited, since some doctors do not accept large numbers of Medicaid patients because their reimbursement rates from federal and state authorities are low. The Washington Post on December 9th also points out that some policies may not cover all prescription drug costs, since plans only have to cover one drug in each category of the U.S. Pharmacopeia, which is the official list of approved American medicines. All of this illustrates that some Americans may not get the broad range of coverage they expected to under the ACA.
Lastly, there are some other myths about the ACA that need to be debunked. First, the law does not apply to illegal immigrants and they are prohibited from being part of the insurance exchanges. And second, Muslims are not exempt from the law, although there are religious exceptions for the Amish who usually have voluntary healthcare cooperatives.
Liberal and Progressive Attitudes Toward the ACA
Readers are encouraged to read our previous analysis of the ACA when it was being debated in 2009 and 2010, which can be found in our archives. Liberals and progressives were not completely satisfied with the outcome of the ACA debate in 2009 and 2010 because they favored having a government run insurance company. In an ideal world, progressives, who are farther to the political left than liberals, favor having a universal healthcare model that only has one healthcare provider, which is the federal government. Extempers might see this idea propagated as “Medicare for all.” The logic of the idea is that the federal government would have a more powerful way to bargain with medical providers than an assortment of insurance companies, especially if it controlled all of America’s health spending, and that it would not be driven by a profit motive, which would help to keep costs low. There are a few problems with this idea, though, as the Brookings Institution points out on November 28th. First, Medicare is a program, along with Social Security, that is fiscally unstable. The Hill on May 31st points out that Medicare is expected to become fiscally insolvent in 2026, which is seven years before Social Security. Conservatives would note that having a Medicare for all approach would be prohibitively expensive and necessitate higher taxation that could hurt the economy. Another problem is that if progressive forces got their way in 2009-2010 it would have caused a great deal of instability in America’s health insurance markets as hundreds of millions of Americans would have lost their health coverage and been moved into a government program and it could have created an “explosive mix of winners and losers.” Also, the transition costs to establish such a program would have run in the hundreds of billions of dollars. These factors explain why President Obama opted for the current approach which blends a free market approach with government oversight and Medicaid expansion. Going to a “Medicare for all” approach or a “single payer model,” may be politically feasible one day, but it was not feasible in 2009-2010 and since the ACA was passed on a party-line vote, with no Republicans voting for it, adopting this model may have alienated some red state Democratic senators that were necessary to break a Republican filibuster in the Senate.
An idea that was also floated during the ACA debate was to have a government-run insurance company compete with the private sector. This was called the “public option.” The idea of the public option was that it maintained the elements of the free market in health insurance, but that the government through economies of scale would be able to bargain better with medical providers. This would create downward pressure on health insurance costs because private insurers would have to lower their premiums to try to keep their customers from moving to the government-run insurance company. This approach, though, for many of the same reasons that a single payer structure was not established during the ACA debate, failed. Conservatives alleged that the public option was not a free market model at all, since the government can run deficits, unlike a private business, and that the government did not have to listen to shareholders like private corporations have to. They alleged that it was a way to bankrupt private insurance companies and pave the way for a single payer model. Since the public option was deemed too radical it failed to make into the ACA’s final draft.
Supporters of the ACA note that healthcare inflation has gone down significantly over the last several years and they champion the ACA as the cause. USA Today on December 25th explains that health inflation is at a fifty year low, but argues that the ACA is not the main cause. Instead, it points out that generic drugs have helped reduce pharmaceutical costs and people are choosing their healthcare more carefully. It also lists the Great Recession as a culprit because the poor economic situation may have caused people to avoid costly healthcare procedures that they could not afford. According to the Bureau of Labor and Statistics, the price of prescription drugs and medical devices rose 0.5% and 0.7%, respectively, in 2013, while the price of doctor services rose 1.4% and the prices for hospital services rose 4.9%. All of these increases, save for those of hospital costs, were less than the level of inflation. However, this is not to say that the ACA will not tame medical inflation in the long run. For example, the ACA supports Accountable Care Organizations, an idea first introduced by President George W. Bush, which try to find more efficiency in the medical sector and try to get hospitals and doctors to work closely together to increase treatment quality, while avoiding costly and unwarranted procedures. Local trials with these organizations have produced millions of dollars in savings.
Another liberal and progressive argument for the ACA is that the former status quo was unacceptable and that America cannot revert back to it. This is an argument against Republican calls for the repeal of the legislation. An op-ed from USA Today on December 11th explains that although implementation of the law has been less than perfect, the fact that people can get insurance with pre-existing conditions, that insurers can no longer put lifetime insurance limits on customers, and that the number of uninsured Americans will fall under the ACA makes it an ideal piece of legislation worth keeping. Liberals and progressives have been assisted by the lack of Republican ideas to modify the ACA. This is not to say that Republicans do not have reform ideas (which will be discussed in the next section), but the calls to repeal the ACA have received more attention from the national media than any other idea. In response to conservative calls that the ACA is taking away people’s health insurance, liberals and progressives note that the Brookings Institution on November 5th finds that the ACA will allow 80% of people to keep their existing health coverage and only 3% are potential losers. However, this might neglect those Americans who could lose their insurance when the employer mandate kicks in next year.
Supporters of the President note that despite some of its initial problems, healthcare.gov seems to be running more smoothly. Business Week on December 29th explained that more than 975,000 people have signed up for health insurance in December under the ACA and that total enrollment on healthcare.gov is not at 1.1 million. They note that although the administration will fall short of its goal of enrolling seven million people this year that it takes a while for large government programs to go into effect. Social Security had some initial glitches when it was introduced in 1935, but is not a very popular program. Also, Massachusetts healthcare system, passed under Governor Mitt Romney and which began in 2006 took a while to get all citizens healthcare coverage, but is now a national model.
Finally, although the ACA is facing a lot of opposition from American voters, with a USA Today/Pew Research Center poll showing that 45% of Americans have a negative reaction to it, liberals and progressives note that Americans are very confused about the law and have no idea what it does. They note that many tenets of the ACA, such as not allowing insurance companies to discriminate against those with pre-existing conditions and allowing twenty-six year olds to stay on their parents insurance, are popular. The Atlantic on October 1st points out that only 25% of Americans tell pollsters that they know the law very well and what is in it. Liberals and progressives also point out that conservative disinformation on the legislation has made it difficult to educate the public about the benefits of the ACA and some polls have illustrated that people have a poor opinion of “Obamacare,” but like the “Affordable Care Act,” despite them being the same thing!
Conservative and Libertarian Attitudes Toward the ACA
Conservatives and libertarians have traditionally opposed the liberal and progressive idea of universal healthcare because they argue that it interferes with the workings of the free market and constitutes a form of “state socialism.” The fact that European governments have adopted universal healthcare models and the fact that these governments tend to lean to the political left only reinforces their suspicion of having a universal healthcare model. Although the ACA actually preserves private health insurance markets, conservatives and libertarians worry that the regulations of the ACA, such as the prohibition on gender rating and the limits of premiums for sick and older Americans will distort the market in such a way as to have some people refuse to purchase health insurance coverage because it is too expensive and that insurance companies could eventually be bankrupted by the ACA, leading to a single payer healthcare system with the government in control. They also worry about the economic impact of the ACA as they fear employers will reduce hiring and/or hours to avoid the employer mandate and they worry that the cost of maintaining premiums will take money out of the economy. Liberals and progressives would counter that if everyone has health insurance and access to quality care that it will make the public healthier and more economically productive and since people will not be bankrupted by medical problems that this will actually send more money into the economy in the long run.
This is not to suggest that conservatives and libertarians are in complete opposition to the idea of universal healthcare. However, their way to achieve it differs significantly from liberals and progressives. For example, whereas liberals and progressives favor having the government play a significant role in administering the nation’s medical needs, conservatives and libertarians favor a free market approach to solving the problems of the uninsured. The Cato Institute on December 25th points out that there is very little competition in the nation’s healthcare marketplace because insurance plans do not cross state lines. It proposes that health insurance should be individual and portable across jobs and states. Hospitals should also provide discounts to customers that pay cash and list their prices online. Conservatives are skeptical that the accountable care organizations under the ACA will produce long-term savings since it an arm of the government trying to force efficiency rather than letting the free market do this on its own. What about those with pre-existing conditions that cannot purchase health insurance? Conservatives and libertarians argue that the federal government should set up high-risk pools for these people to make coverage affordable for these groups, but The Economist on December 3rd points out that these high-risk pools have failed when they have been tried in the past because they end up far too expensive. However, the article notes that since the rollout of the ACA has been so badly botched, conservatives could gain political points by modifying the ACA to meet their vision of healthcare reform thereby turning the ACA into a “Trojan horse” for conservative healthcare.
The Republican Party is currently at war with itself on how to deal with the ACA. It is unlikely that any notable Republican candidates are going to run on a platform of supporting the ACA in the 2014 midterms, since doing so would invite a Tea Party challenge. Nevertheless, since people are now purchasing coverage on federal and state insurance exchanges it makes very little political sense that the ACA should be repealed, which would throw millions off of the insurance rolls. The Huffington Post on December 23rd reports that Clint Murphy, a former Republican staffer that now considers himself independent, is arguing that Republicans should avoid talking about repealing the ACA, but come up with realistic solutions to make the law better. This concurs with The Economist article cited above, which suggests that if the Republicans propose sizeable fixes to the ACA that they could be seen as the saviors of the law and could overcome the obstructionist label that has been tossed on the party since the 2010 midterms.
Republicans and libertarians argue that the premium increases customers are facing, sometimes called “sticker shock,” is due to the lack of gender and age ratings in insurance policies under the ACA. Without these, as has been indicated before, women, the elderly, and the sick would be paying a higher price for insurance, but those that believe in the free market believe that this is okay because it illustrates the proportion of how much these people consume medical services. After all, younger Americans face higher auto insurance premiums because it is shown that they have more accidents than other segments of the American population. The Guardian on December 20th points out that the ACA has high premiums for those that do not qualify for subsidies, which could be between $200-$350 a month, if not higher. Republicans point out that younger Americans, who consumer very few medical services, have no real reason to purchase health insurance. After all, why should a twenty-seven year old purchase a policy that will cost them $200+ a month, while having a $5,000 deductible? Liberals and progressives would argue that if that young person has a medical disaster then they will not be able to pay out-of-pocket for all of their healthcare costs and that when that younger person gets older they will be happy that they paid for the healthcare of the elderly and the sick. Politico on December 18th breaks down a recent political fight over some of the ads to promote the ACA by the leftist organization Organizing for America. The organization, along with many others, has tried to promote the ACA among young people, but the ads of these groups have sometimes demeaned the groups it is trying to reach out to. For example, one ad showed college students acting foolish around a keg stand and warned them that accidents happen and it is important to have healthcare coverage, while another stereotyped young women as promiscuous by emphasizing the “free” birth control in the ACA (again free is in quotation marks because technically everyone’s premiums are paying for this service). The ad that Politico recaps is one that shows a young man in his 20s in pajamas during the holiday with a caption that he should talk with his family about health insurance. The ad was blasted by conservatives, who argue that it shows the lack of masculinity among young American men and the fact that young people are living with their parents under President Obama’s economy. Never one to shy away from a good sound bite, Governor Chris Christie tweeted “Get out of your pajamas,” in response to the ad.
Conservatives and libertarians have also used the botched rollout of the ACA as a reason to be thankful for the lack of a single payer structure in the final legislation and they argue that government regulations may create the collapse of the private insurance industry. USA Today on December 18th discusses how many major insurance companies extended their deadlines for signing up for premium payments through the holidays until January 10th. These companies have also said that they will provide retroactive coverage for customers starting January 1st. This means that people will be insured without making their first premium payment, as long as that payment is provided on January 10th. Conservatives and libertarians argue that this change happened after the Department of Health and Human Services asked insurance companies for their cooperation, but that it is really not asking at all since it has said that the compliance of companies in doing this will factor into whether those insurance companies have their products listed on the healthcare exchanges next year. Not all insurance companies are on the federal or state-run exchanges, but their policies must comply with the ACA mandates. However, insurance companies largely want to be on the exchanges because it opens them to a wider pool of customers to receive premiums from. Conservatives and libertarians also worry that some people will stop paying their premiums over time, which could leave insurance companies on the hook for costs. Under the ACA, if a premium is not paid, an insurance company is still liable for an individual’s healthcare costs for thirty days after their premium was due.
A final worry among conservative forces comes from the ACA’s provisions regarding abortion. Politico recaps this debate when discussing a state-level debate over the ACA and abortion in Michigan on December 11th. According to the Hyde Amendment, federal dollars cannot be used for abortion and President Obama had to give in to pro-life Democrats, like by Michigan Representative Bart Stupak in 2010 to help the ACA pass the House. Under the compromise, the funding streams for abortion coverage must be kept separate from normal policies, meaning that if someone wants abortion coverage then they have to purchase that as an insurance add-on. The reason that this matters in the ACA is that policies for some groups are subsidized in state and federal exchanges. The ACA allows states to ban abortion coverage on the exchanges, though, and to date twenty-four states have done so. This is not necessarily unique to the ACA, as Politico’s article points out that thirty-two states and Washington D.C. ban abortion funding in their Medicaid programs. Women’s rights groups consider it to be a ban on women’s reproductive rights to limit access to abortion coverage on the exchanges, but these limits have survived judicial muster thus far. Public opinion also tends to support those who do not want tax dollars to pay for abortion coverage, so pro-choice forces are fighting an uphill battle on this issue. Nevertheless, extempers should watch this issue because eventually it could become of the most explosive tenets of the ACA among liberals and conservatives.
Tips for Talking About the ACA & The Debates Ahead
The first tip when talking about the ACA is to be very educated about the tenets of the law, which hopefully this brief and the linked sources will provide you with. You need to understand the terminology of insurance markets regarding premiums, deductibles, etc. in order to convince your audience that you have an adequate knowledge of the law and how it will impact coverage for the uninsured. Make sure if you use sources from think tanks or op-eds that you also take into consideration their political agendas. For example, the Cato Institute tends to be conservative, so you can imagine that its ideas are going to be very anti-ACA. When you cite your sources it is important to draw these distinctions (if they exist) and assess their strengths and weaknesses. Just like talking about abortion or affirmative action, you need to try to offer balanced coverage to both sides to create a sufficient argument. Going too far to the political left or too far to the political right when making your argument will only alienate your audience. I do not think it is fair to rank speakers based on their political views, but judges are less likely to accept your critique if you never give a fair hearing to the other side. Therefore, whether you believe the ACA is good or bad, you need to make sure that you present a critique that contrasts left-wing and right-wing ideas of healthcare reform.
The other tip is that I would default towards calling the healthcare reform “the Affordable Care Act” instead of “Obamacare.” I have used “Affordable Care Act” and its acronym ACA throughout this brief to reinforce this idea. Obamacare is a derisive term used by conservatives for the legislation and at first President Obama welcomed the term, since he thought it would reflect well on him. After the botched rollout of healthcare.gov, though, the President has moved away from accepting it. I have used both interchangeably in past topic briefs and it is not like the term “Obamacare” is offensive, but “the Affordable Care Act” is a more neutral term that is less likely to alienate any liberal judges you may encounter on your local circuit. The exception to this rule is if you get a question that has the term “Obamacare” in it.
One of the biggest issues facing the ACA’s implementation is how many young people will enroll in the exchanges. The Harvard Political Review on December 4th notes that these so-called millennials are an important element of the law because if they do not enroll then it could create a “death spiral” in the insurance market. This would be created if not enough young, healthy people enroll in the exchanges, leaving too many older and sick people in them. If this occurs, premiums would sizably increase for the next year, thereby leading to fewer people buying health insurance and paying the fine and leading to the collapse of the private insurance industry. Some experts have even said that this could lead to a federal bailout of the insurance industry, which could prove politically unpopular. The Harvard Political Review article explains that only 39% of young people approve of the ACA and 47% do not plan to enroll in the exchanges. Reuters on December 21st points out that the Obama administration is alarmed by this and in the past it used celebrities like Lady Gaga to pitch the ACA. Now they are trying to frame it as a social responsibility and trying to foster peer and parental pressure to get young people to sign up, but evidence is showing that the more young people learn about the ACA the less they like about it. Supporters of the ACA expect young people to sign up near the end of the open enrollment period of insurance, since they did the same thing in Massachusetts and since young people tend to procrastinate. However, there are several issues extempers should look at when it comes to young signups for the ACA. First, if less than 1/3rd of those who sign up on the exchanges are young people then it is expected that premium costs will increase for those who are on the exchanges. This could be the beginning of the “death spiral” not above. And second, the issue may open the door for Republican outreach to younger Americans, who tend to vote Democratic. Young people will need to be paying for Medicare and Social Security benefits for the baby boom generation retiring and may face tax increases to pay for these programs as they become insolvent. The ACA adds another component to this, so it could harm Democrats outreach to this segment of the population if young people view the ACA as an income transfer program that takes away their disposable income.
Another issue to pay attention to with the ACA is its first year of enforcement. The New York Times on December 18th explains that just 1/3rd of the uninsured in the country think that the ACA will improve the nation’s healthcare system, which means that it is important for the ACA to have a good first year. The Economist on December 14th noted that although the government has championed the large numbers of signups they have not provided information based on age groups or how many people have had their insurance information sent to insurance companies. Also, just 41% of Americans on the exchanges have qualified for subsidies, whereas the Congressional Budget Office (CBO) thought that the number would be 86%, which has provoked lots of criticisms of expensive policies. USA Today on December 12th notes that despite fixing elements of healthcare.gov, insurers are still receiving incomplete information from some customers, especially families as children are listed as spouses instead of as dependents. This led one insurance executive to comment that “the joke early on was that there was an epidemic of polygamy.” Without getting adequate information, people may think they have health insurance when they actually do not since insurance companies have no record of their enrollment and this could create problems with the law’s implementation. The New York Times on December 16th reports that there are problems with the pediatric dental plans in some policies on state and federal exchanges. Insurers were supposed to offer dental care for children under 18 as part of their packages, but on some exchanges it is being sold separately and is not subject to subsidies. As a result, the ACA may fail to provide dental care for three million children by 2018. Some states like Kentucky, Nevada, and Washington require people to buy these dental plans for their children if they are sold separately to spread the risk pool, but if people cannot afford them it is going to create a political nightmare for lawmakers in those states. The final enforcement issue to look into is whether the federal government actually penalizes people for not having health insurance. As pointed out above, the IRS can only go after an individual based on their tax refund, but they cannot confiscate money or property to collect and prosecutions are unlikely. However, the IRS could pester people to get its money and late penalties could make the fine bigger. If there are still sizable glitches in obtaining health coverage, though, it may not be politically popular to fine people for not having coverage, so extempers should look at how the White House approaches this issue. As of right now, President Obama has said that the individual mandate will “absolutely” be enforced, but some additional exemptions from the mandate have been granted to those who have lost their insurance due to the new ACA mandates.
Next, there are also legal questions that extempers should be aware of when it comes to the ACA’s enforcement that could become national news in 2014. Thus far, President Obama and the Department of Health and Human Services have unilaterally delayed several elements of the ACA and modified other parts. Supporters of the President argue that the executive can do this because they are charged with enforcing existing legislation, but opponents argue that the President is usurping legislative authority when making the changes. They contend that the ACA might be settled law, but how “settled” is it when the President can decide which elements will be enforced and when? Historically, this is akin to the line item veto power that some presidents have sought which allows them to veto select pieces of legislation, while signing into law the elements that they agreed with. President Bill Clinton was granted this authority by Congress to help balance the federal budget in 1996, but the Supreme Court in 1998 in the case of Clinton v. City of New York found this unconstitutional in a 6-3 decision because it allowed the President unilateral legislative power. There are a few minor cases working through the court system right now that challenge elements of President Obama’s ACA modifications. The Supreme Court is also taking up a challenge to the ACA’s employer mandate regarding contraception coverage next March. CNN reports on November 26th that nearly fifty lawsuits have been filed about the contraception requirement by businesses that say it violates their First Amendment religious beliefs. The issue in question is whether businesses enjoy the same First Amendment religious protections as individuals and the cases the Court will look at concerns Hobby Lobby, an art and craft store chain, and the Conestoga Wood Specialties Corporation. Extempers should follow these judicial challenges carefully because they could undermine the scope of the ACA, limit its coverage options, and potentially expand the realm of constitutional rights that businesses currently enjoy.
Finally, it will be interesting to see how the ACA impacts the 2014 midterm elections. Democrats are hoping that those who receive benefits under the ACA will be more willing to vote for its candidates and that Republicans who want to repeal the legislation will be punished at the polls for wanting to take away the new health insurance policies that some people receive. Republicans are hoping that the ACA will alienate Americans who have lost their previous insurance policies, might be paying more for health insurance under the ACA, and/or those who fear government designs on the healthcare system. Since Democrats hope to retain control of the Senate in 2014, which depends on retaining many seats in red states like Louisiana, Arkansas, and Alaska, the ACA could play a role in helping the Republicans obtain control of the Senate. Politico on December 20th explains that Democrats running for re-election in 2014 like Mark Warner of Virginia, Jeanne Shaheen in New Hampshire, and Mary Landrieu in Louisiana have supported the Obama administration’s latest ACA delay, which allows those who had their health insurance policies cancelled to claim a hardship exemption from the individual mandate this year. This illustrates that Senate Democrats are nervous about the impact of the legislation on their political fortunes and extempers should watch the 2014 Senate races to see if the ACA weighs down Democratic candidates and helps the Republicans seize control of the chamber.