April 5, 2012
Yes, it expands coverage and reduces costs
By Jeremy Adelman ’13
With the fate of American health care in the hands of Justice Anthony Kennedy, America has once again revisited the debate concerning the direction of American health care as charted by President Obama and congressional Democrats under the Patient Protection and Affordable Care Act (PPACA), better known as “ObamaCare”. Though it is by no means a perfect law, PPACA’s vociferous critics do the law an injustice by failing to herald the commonsense, necessary reforms to health insurance enacted by this statute as a valid framework for future health reforms.
Constitutional questions aside, the individual mandate (much-maligned by the political right) is essential for both solving a current free rider problem facing hospitals and facilitating the implementation of a number of common-sense reforms of health insurance. Prior to PPACA, the federal requirement that hospitals treat all patients regardless of ability to pay spawned an abuse of emergency rooms by the uninsured, a cost reflected in exorbitant prices for hospital care and in turn higher insurance premiums.
Furthermore, the individual mandate allows the government to prevent insurance companies from denying coverage or charging astronomical premiums on the basis of preexisting medical conditions, a reform necessary to ensure all Americans have access to affordable health coverage. Without the individual mandate, such “community rating” and “guaranteed issue” requirements would allow citizens to purchase health insurance only when they are sick, leading to skyrocketing premiums and the eventual collapse of the insurance industry.
Meanwhile, PPACA’s left wing critics bemoan the demise of the “public option” whilst praising the benefits of a politically untenable single-payer universal health care system. However, the bill’s combination public-private paradigm has numerous advantages over a purely public system. By having consumers purchase health insurance from private providers rather than simply receive care from the government, PPACA encourages cost reduction through competition between insurance companies for business. It also maintains the freedom of individuals to choose between a number of policy options with ranges of coverage, premiums and deductibles.
PPACA , moreoveer, succeeds in making health insurance affordable to low income Americans, thus trimming the ranks of the uninsured. Under the new law, families earning up to 400% of the poverty line receive refundable tax credits towards the purchase of health insurance, facilitating affordable coverage for those who earn too much to qualify for Medicaid. This provision, combined with an expansion of Medicaid, is projected to extend coverage to about 94 percent of Americans.
Finally, critics of the law from both the left and right tend to ignore or misrepresent Title III, which includes a number of reforms designed to ameliorate the projected long term cost explosion of Medicare. By changing Medicare’s current “fee for service” compensation scheme to bundled payments based on positive outcomes, PPACA eliminates the incentive for doctors to order unnecessary procedures. The act also takes aggressive steps towards curbing Medicare fraud, a malady the US Department of Health and Human Services estimates to cost American taxpayers $60 billion dollars a year.
The most important Medicare cost savings, however, come from the creation of the Medicare Advisory Board. Though derided as a “death panel” during the hyperbolic months leading up to PPACA’s passage, this group of health experts is expressly forbidden from rationing care or revoking eligibility for benefits. Instead, the board ensures the long-term fiscal viability of the program by identifying inefficiencies and superfluous benefits. Given the gridlock in Congress and the political ramifications of touching the coveted benefits of current seniors, there seems little hope of a legislative solution to Medicare’s $37 trillion unfunded liability. The Medicare Advisory Board could slowly scale back the unsustainably generous benefits offered by today’s Medicare without fear of voter backlash.
As with every piece of legislation, the Patient Protection and Affordable Care Act has its share of imperfections. However, the act nonetheless takes great strides towards eliminating flagrant abuses by insurances companies (such as capping lifetime benefits), cutting the swelling costs of Medicare, and providing coverage for the nearly 50 million Americans who currently have no health insurance. Of course, additional reforms, such as a cap on the amounts awarded in malpractice suits, would be beneficial, but there is no question that PPACA represents a step towards better, cheaper and fairer health care in America.
No, freer markets are a better alternative
By Danny Pierro ’15
On Capitol Hill, protestors are swarming, ideologies are clashing and the Supreme Court of the United States is debating, according to legal scholar Timothy Sandefur, “the most important case on the reach of federal power in 50 years.”
As of Monday afternoon, the Supreme Court has been hearing oral arguments in favor and against the Patient Protection and Affordable Care Act (PPACA), also know as Obamacare by its harshest critics—the American “right.” The PPACA establishes provisions which reform certain areas of the health insurance market, such as ending discrimination against people with pre-existing conditions. More controversially, the provision of the statute know as the “individual mandate” requires that all Americans who are not covered by governmental programs or their employers, to purchase and maintain minimal coverage. The argument behind this statute is that in the aggregate, those who are uninsured use public resources and tax dollars in order to pay for healthcare costs.
While I admire the intentions of the Obama administration, I find it troubling that Americans have an easier time purchasing car insurance than finding adequate, affordable health insurance. Do not get me wrong, the quality of healthcare in America is very high; but its accessibility and affordability must be reformed. I, with many scholars, politicians and economists that the best way to go about reforming the insurance market is not by adding more mandates, more restrictions and more government, but instead by increasing market competition. However, the PPACA uses the government as the remedy, rather than an instrument, for promoting the market. Throw in lobbyists and interests groups, and Americans will be more insulated from the political process and become severely limited in making healthcare decisions that truly benefit them and their families.
The health insurance market is hardly national and is actually very restricted. Currently, Americans cannot purchase insurance across state lines, severely limiting their options as to what types of programs they can subscribe to and at what costs. The bill claims to enhance the national market, but currently the only national market for health insurance is that of federal programs. Other than that, we are not allowed to purchase across state lines, pick and choose what we want in our health insurance programs and make personalized decisions that best fit our healthcare needs. Think about this: The iPhone did not come into creation because the government told Apple to do so. The iPhone is the modern-day emblem of innovation and technological thought, as well as an excellent response to consumer demand.
By eliminating artificial barriers that severely limit our autonomy, we allow for health insurance companies to compete against one another for survival, much like Motorola, Apple and Google. This will cause premiums to fall, create more options for Americans and better satisfy the needs of America’s most vulnerable citizens. In addition, other remedies consist of reforming the tort model that has caused high legal costs for doctors across the nation.
But where do we, students at Hamilton College, fall into this equation? Due to the last few administrations—Republican and Democrat—this generation has a deficit on its back larger than ever before. The PPACA attempts to be a federal remedy for a national problem, but in reality, it just adds more straw to the camel’s back. This is not an argument against “creeping” socialism or lionizing “evil” capitalism; it’s an argument of protecting our contractual rights, our ability to separate our private choices from an overbearing government, and to promote budget-deficit reform. The same bipartisan politicians, who have bankrupted social programs that truly add to the value of being American, now want to hold our hands in the doctor’s office, too. I say, “Thanks, but no thanks.”
Social Security, Medicare, Medicaid and other fixtures of the American government are, simply put, on the road to bankruptcy. As this generation accumulates more debt than ever because of high education costs and economic downturn, must we foot the bill of yet another act of Congress?