While President Barack Obama’s Patient Protection and Affordable Care Act may have changed healthcare in the U.S., the Act itself needs doctoring. This so-called reform does not confront fundamental problems in the health insurance industry.
There are a few parts of the Act, commonly referred to as Obamacare, that are agreeable, like prohibiting insurers from turning people away for pre-existing conditions. In the grand scheme of things, however, this program may worsen the situation of healthcare via the individual mandate, which would force people to buy private plans from insurance companies and still leave a considerable portion of the population without insurance.
Proponents of the Act support the individual mandate because on paper more customers would mean lower rates. Young people are a big help. Because they are presumed to be healthier, they would less likely be in a position where they would have to go to the hospital and use their insurance for health complications.
Cost of coverage is increasing. Full-time employees at Southwestern College each receive $5,200 a year from the district for medical insurance, but that is not enough anymore according to Bruce MacNintch, president of SWC chapter of the California School Employees Association.
“Back in the old days it was far more than just medical insurance because medical insurance didn’t cost $5,200 a year for an (full-time) employee,” he said.
MacNintch said the cost of insurance has been increasing.
“Kaiser’s going to be $6,000 a year for an employee,” he said. “We still get $5,200. “There’s an additional fund that the district provides of $800,000 by contract, that we can draw on, and then the Governing Board has been approving additional funding on a year-to-year basis.”
The demographic of consumers has a lot to do with the price, he added.
“We don’t hire many 18 year olds to work at Southwestern College, so we tend to be an older group, and you pay more the older you get.”
Flooding the industry with more money to bring down costs is the purpose behind the individual mandate. People with low medical risk have to pay for their plans and that money ideally goes to lowering the price across the board, especially for older people and people who use their insurance often. There are just two problems with this.
First, this is a tax. Oddly enough, it is not a tax by the government. It is enforced by the government with a penalty fee, but the money goes directly to privately-owned corporations whose leaders are not elected by or directly accountable to the people. In a few years this program may be so fouled up, there is no way the public’s interests, namely affordability of insurance, could be guaranteed.
Rolling Stone investigative reporter Matt Taibbi, author of “Griftopia,” wrote that prior legislation not fully taken on in the Patient Protection and Affordable Care Act seriously flaws the program. In 1945 Congress signed into law the McCarran-Ferguson Act, which ended up severely limiting federal agencies’ jurisdiction over regulation and investigation of insurance. The Sherman Antitrust Act of 1890, the Clayton Antitrust Act of 1914 and the Federal Trade Commission (FTC) Act of 1914, were signed into law to prevent collusion between corporations to fix prices and control markets.
These laws do not apply to the business of insurance. This is because of the FTC Improvements Act of 1980. The book on “Federal Trade Commission: Law, Practice, and Procedure,” states that Section 6 of the FTC Act was amended to prevent the FTC’s “investigational jurisdiction applicable to the ‘business of insurance’.” Instead, regulation of the private sector and expansion of government-funded plans vary throughout the U.S. because state governments reserve the right to regulate within their own jurisdictions. So while price-fixing may be illegal on a federal level, there is no federal agency authorized to enforce the law. In some states it could go on unpunished, defeating the purpose of the individual mandate entirely.
Aside from that, the U.S. Supreme Court ruled in 2012 that expansion of government-funded care is left up to each state. The U.S. has a federal program that does not have a blanket effect. If the legislators in a state government, such as South Carolina, decide not to expand Medicaid in their state, then not as many people can be covered by it. Qualifications become stricter, with only the very poor having coverage provided by a government-run plan. People who don’t qualify as poor enough, but who are still poor are left in limbo. They make too much to qualify for Medicaid, but not enough to qualify for tax credits to buy a private plan. They cannot get insurance.
Fortunately for people who find themselves in this predicament, come 2014 they are exempt from the penalty fee. The fact remains, however, that these people are still not covered. There are two choices for them. They can stay where they are and stay uninsured, or they can uproot their lives and move to another state in which the government has chosen to expand Medicaid. Granted, malicious state politicians are responsible for the healthcare limbo, but unchallenged McCarran-Ferguson is the reason they have the ability to muck things up.
What it boils down to is a healthcare reform act which forces people to give business to private insurance companies based on the idea that the money will lower costs for everybody, but there is no way to guarantee that it will work. Add the fact that there will still be a significant portion of the population without coverage, and the Act hasn’t reformed much of anything.