Wayne O’Leary

The Obamacare Conundrum

Everyone is familiar with the horror stories surrounding last fall’s rocky rollout of the Affordable Care Act (ACA) - - the computer glitches and crashes, the premium increases, the policy cancellations, the general confusion and uncertainty. Less well known are the underlying reasons for the sputtering liftoff, which were hidden under an avalanche of alarmist news headlines.

The national media, operating with a negative herd instinct, appeared predisposed to seek out and publicize whatever shortcomings could be located, ignoring anything positive; they almost seemed to be rooting for an administration failure. Not that there wasn’t bad news to report; there was plenty, but those reporting it did so with unabashed glee, as if they had internalized the main talking point laid out in the Republican playbook — to wit: Obamacare can’t succeed because it’s “government-run healthcare.”

Time out! Obamacare is not a government-run program and was deliberately designed not to be. Its Republican origins (Romneycare in Massachusetts by way of the conservative Heritage Foundation) belie that specious charge. Unlike Medicare, for instance, which is a nonprofit, government-managed program funded by tax dollars, Obamacare is, in essence, profit-based, privately managed healthcare with a regulatory overlay; the federal role consists mostly of insurance-market reform by means of rules changes and coverage requirements.

Obamacare, with its individual mandate, is really an outgrowth of the GOP’s answer to the national single-payer and employer-mandate plans pushed by Sen. Ted Kennedy and other Democrats from the 1970s through the 1990s; it was the conservative, market-based alternative. But rather than accepting paternity, Republicans chose to drown their offspring, creating roadblocks to implementation in most of the states that went red in 2010 and refusing to set up state insurance exchanges. This, along with the confusion sown by one-sided, negative press coverage, was the biggest reason for the ACA’s halting debut.

The administration naively assumed that most governors and legislatures, particularly Republican ones committed in theory to “states rights” and local control, would want to run their own online exchanges. When two-thirds of the states declined, some for economic reasons but most out of ideological obstinacy, Health and Human Services Secretary Sebelius and her agency weren’t technically prepared (and lacked the funding needed from Congress) to implement the federal stopgap on a nationwide basis. They obviously underestimated the irrational willingness of GOP governors to spite themselves in order to gum up the works.

Republicans were proactive in one area, however; they threw every barrier conceivable in the path of the “navigators” hired to help steer those shopping for coverage on the HHS website through the computerized maze of plans and options. Restrictions imposed on navigators in 17 Republican-controlled states have included high monetary charges for mandatory state licenses, state competency exams, criminal background checks, and limits on access to the public. This approach has worked to limit voting rights, so why not?

The GOP also has an ally, a kind of secret friend, in its guerilla war against Obamacare: the American health-insurance industry itself. After having been courted assiduously by President Obama prior to passage of the ACA, their policy wishes (e.g. no public option) granted to obtain pledges not to publicly oppose the law, the insurers have subsequently turned on the president who not only kept them in the healthcare game, but guaranteed them millions of new captive customers.

The insurers dearly want these customers, but they’d also prefer to avoid the accompanying restrictions that prevent pre-ACA business as usual. Predictably, they’ve begun gaming the new system, using Obamacare’s troubled start as convenient cover to continue doing what they’ve done for years, namely, raise premiums, deductibles, and co-pays. One tactic has been to blame sudden premium hikes of 30 to 100 percent for coverage in the individual and small-business markets on the law’s attempt to eliminate high-deductible, limited-benefit “junk” policies.

Meanwhile, companies heavily involved in Medicare Advantage, such as UnitedHealthcare, have found another way to maintain excess profits, using Obamacare’s long-overdue reductions in their unjustifiably high federal administrative subsidies as an excuse to drop thousands of contracted doctors from their provider networks as a cost-saving measure. Not to be outdone, corporate America’s large employers have joined right in to neuter the ACA, passing their Obamacare costs (a minor fee to support implementation) on to insured company workers by jacking up the employee share of premiums for spousal and family coverage.

There is one ray of light in this gloomy picture of healthcare reform, the ACA-authorized expansion of Medicaid, the joint federal-state program for the needy. As of mid-December, twice the number of people had signed up for expanded Medicaid as had acquired private insurance through the federal and state exchanges.

Statistically, that’s the good news; the bad news is that participation in the federally funded expansion, made voluntary for the states by the 2012 Supreme Court decision upholding the ACA, has been summarily rejected by red-state America. At latest count, 25 Republican-controlled states have refused to extend Medicaid to the working poor, thereby denying healthcare coverage to several million low-income Americans ineligible to participate in the insurance exchanges.

All along, the assumption of the Obama administration was that everyone — Republican opponents, insurance companies, corporate America — would cooperate in implementing the ACA once it was law. That hasn’t happened. The GOP is still dedicated to destroying it, and the insurers and large employers are engaged in cynical games of deception and bluff with Government regulators to avoid full compliance and gain best advantage. The end result is a mishmash of complexity, confusion, and unnecessary expense.

In most advanced countries, healthcare is a socially provided right of citizenship, not a branch of the free market where profits are made and consumers “shop” for medical coverage. Regardless, progressives are being urged to back Obamacare as is to the hilt, because (1) delusional Republicans oppose it and because (2) it’s the best this generation of Americans can accomplish — better, at any rate, than what preceded it.

But the truth, as they say, is out there. Responding to a query in November, House Minority Leader Nancy Pelosi (D-Calif.) reportedly admitted, “Yes, we should have done single payer.” With that in mind, perhaps the proposed ACA amendment of Congressman Jim McDermott (D-Wash.) to permit immediate establishment of state single-payer systems represents the way forward.

Wayne O’Leary is a writer in Orono, Maine, specializing in political economy. He holds a doctorate in American history and is the author of two prizewinning books.

From The Progressive Populist, February 15, 2014