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Author: Ciaran Bruen

Obamacare: Looking to the Future

Obamacare: Looking to the Future

As we enter the final hours of the Obama presidency, let’s take a look at the defining legislation of the President’s tenure: The Affordable Care Act, nicknamed “Obamacare.” Strife with critics and shrouded in controversy, the looming transition of power in American politics threatens to undue the cornerstone of Obama’s administration. However, faced with the reality of the situation, the new Republican government cannot simply eliminate the Affordable Care Act. Doing so without replacement would leave behind a vacuum in which nearly 22 million people would become uninsured, having become dependent on this subsidy. Rather, it will be the task of our new President and Congress to not only repeal Obamacare, but replace it with something better.

The first step towards a better healthcare system for the United States is to analyze the strengths and weaknesses of the Affordable Care Act. Of these, its practical and strongest provisions are: allowing dependents to stay on their parents’ insurance until they are 26, guaranteeing coverage to those with pre-existing health issues, and protection from being denied coverage due to the discovery of new health issues. These points are amongst the most popular of Obamacare and are provision in which both House Speaker Paul Ryan and President Trump have expressed strong interest in continuing under a new plan.

One quick note about pre-existing conditions. Insurance companies are private businesses with the same goal as all others: make money. They make their money gambling that you won’t get sick. This is why older people pay more. There is a bigger risk of illness in a 80-year-old who smokes than in a healthy 22-year-old. How can an insurance company make money if they’re forced to take people who are already sick? Should you be able to buy Fire Insurance for your home after it has already burned down? While this is one of Obamacare’s most popular, and most fought for, provision, some things are not as simple as Bernie Sanders would have you believe.

Obamacare has enough shortcomings to raise serious concern over its effectiveness in the long term.  From the raised premiums across the board, to lacking the ability keep your doctor under this plan, many of President Obama’s original promises of the effectiveness of this plan have been broken.  This is a by-product of legislation that increases government beaucracy while decreasing private sector partnerships.

Currently, because President Trump has not fully disclosed his plan for replacing Obamacare, the most reliable option we have in assuming what may take the Affordable Care Act’s place would be the Paul Ryan plan.  Under this new legislation, the stronger points previously mentioned of the Affordable Care Act would be retained and incorporated into this new plan. It will still provide health coverage to those who cannot afford their own, promote more private sector partnerships which create more competitive healthcare markets, and grant greater autonomy to the states in how they will distribute these benefits.

The key component for the new Republican government in restructuring universal health care will be greater private sector partnerships. If, instead of the Federal government contracting their healthcare coverage to a small handful of giant healthcare providers, we were to grant Federal tax credits to individual people who could redeem them in their state health insurance market place, it would allow for a more fluid distribution of capital across health insurance companies. In doing so, health insurance companies would become more competitive and lower their premiums to attract new patients.  This is the most crucial component of reforming Obamacare. It will lower premiums, reduce government beaucracy, and create a more economically competitive market without having to take away health care coverage to those who need it.

In addition to lower premiums, the top priority of reforming Obamacare is to take the government out of medicine. This is not an attempt at selling my political or ideological rhetoric, but rather a fact grounded in data.  Fewer and fewer healthcare providers are accepting government programs, like Medicaid. At face value, this can be hard to understand. It becomes more transparent when you examine why this trend is happening. The average service billed to a patient’s Medicaid takes upwards of a full month before the doctor’s office receives reimbursement from the government. Once it finally arrives, they often only receive two-thirds of the billed amount, and are left at a lost for the remaining third. This is the sort of beaucracy that needs to be eliminated for any kind of national health care system to thrive while still promoting free markets. This can be accomplished by analyzing the few states that have the most effective Medicaid programs, and then implementing their strategies in those states with less effective systems.

Although Republicans have many plausible ideas for reforming national health care to make it more efficient and private sector friendly, there is a point of some worry. One major provision that Paul Ryan advocates for is the grouping together of “high risk” individuals (chronic or terminal illnesses ect.) into a separate market of their own with a premium cap. This in turn would dramatically lower premiums for healthy policyholders, however, it is a fair and ethical question to ask: At what cost? Reducing premiums for the healthy while allowing for an environment where the premiums for the sick and terminally ill will sky rocket is amoral, unethical, and something that in the long term will have catastrophic results. In a healthy insurance market, the only way you can assure lower premiums for EVERYONE in your market is to integrate the high-risk patients with the low risk. This is one of the many problems that arises when the government is involved.

Lastly, there is a major problem that neither Republicans nor Democrats seem to be discussing. In reforming our healthcare system, we could reduce operating costs for doctors and health care professionals, then premiums would go down, as services would cost less. The big problem? Malpractice insurance. Roughly 70% of general surgeons, obstetricians, and gynecologists are sued once in their career, and 50% more than once. However, of the overall malpractice suits, only 1 in 7 actually results in a payout to the plaintiffs. With these stats in mind, it is fair to say that if a more thorough vetting process were instituted for frivolous medical lawsuits, medical malpractice insurance would cost significantly less, provider’s opportunity costs for procedures would be greatly reduced, and ultimately insurer premiums would be greatly reduced as well.

The issue of national healthcare has long been a source of contention in American politics. Arguing whether we should have it or not is ultimately irrelevant, as under the Affordable Care Act millions of Americans have become dependent on a system that if vanished overnight, would have disastrous consequences for society. This was in large part done by design from the Democrats and is ultimately characteristic of its bureaucratic flaws. Ultimately, it will be the duty for our new Republican government to make a new form of national healthcare that is more cost efficient, private sector friendly, and doesn’t enable our eternally expanding Federal government.

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Ciaran Bruen is a graduate of Binghamton University and is now pursuing his MBA. He has interned on Capitol Hill, worked for the New York State Government, and has worked on various political campaigns.

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