Diary

On Obamacare, Americans Are Whistling Past the Graveyard

Obamacare is imploding like a dying star, but Americans don’t seem to notice. According to a February 21, 2020 report from the Kaiser Family Foundation, the approval rating for the Affordable Care Act (Obamacare) is at an all-time high. Incredibly, 55 percent of Americans support the legislation, up from 46 percent when the law was first enacted. But why do the majority of people now embrace the law? One thing is for certain: it isn’t the program’s results.

Under Obamacare, the American healthcare marketplace has fallen apart. Rather than contain healthcare costs, the Affordable Care Act has made insurance much less affordable. A 2018 study from the Urban Institute and Robert Wood Johnson Foundation found that, between 2017-2018, Obamacare premiums rose substantially. The cost of a gold tier plan rose nearly 20 percent while the price of the silver tier alternatives jumped by 32 percent.

But a majority of Americans, it would seem, are all too happy to whistle past the graveyard, disregarding the bad news of Obamacare in favor of their own pleasant narrative. Still, the facts speak for themselves, and the American healthcare system is undoubtedly struggling. Despite what so many people seem to believe, healthcare costs are rising, and options are dwindling. All of which begs the question—who is to blame?

Most conservatives would argue that the government is the problem, and for the most part, they’d be right. But the answer is more complicated than that. Government-run programs like Obamacare have decimated the healthcare industry, to be sure. But to lay sole responsibility at the feet of federal bureaucrats would be short-sighted. Rather, those who pushed to implement the disastrous legislation bear substantial responsibility for Obamacare’s outcome. In this case, then, the blame falls squarely on America’s insurance companies.

Insurers lobbied hard for the initial passage of Obamacare, and in 2017, when the law was on the chopping block, the insurance lobby again fought against its repeal. But why would private entities advocate for more government regulation within their industry? The answer is cronyism.

Under the ACA, large insurance companies have profited greatly—and it’s no wonder why. Obamacare provided them the tremendous opportunity both to reduce competition and raise premiums in the process. Unsurprisingly, insurers leapt at the chance. Since Obamacare’s inception, the largest three health insurance companies—UnitedHealth, Anthem, and Aetna—increased their net income by 131 percent, 58 percent, and 62 percent, respectively.

If their support for the ACA is any indication, these insurance companies are less interested in fixing America’s healthcare system, and more concerned about lining their own pockets. And now, they’re doing it again. Most recently, Congress has introduced an insurance-backed piece of legislation called the Lower Health Care Costs Act (LHCC). But just like Obamacare, the LHCC would merely enrich crony insurance providers at the expense of everyone else.

The bill purports to address the crisis of surprise medical bills. The disastrous result that occurs when, in emergencies, insured patients inadvertently receive treatment outside of their insurer’s network of care provides. Surprise medical bills can inflict unlucky individuals with large and unexpected medical expenses. The phenomenon has become a nationwide epidemic as of late, costing Americans billions of dollars.

To solve the problem, the LHCC proposes to establish a benchmark rate for medical bills, based on the comparable Medicaid rate. Essentially, the bill seeks to create a government-mandated system of price controls. In theory, this change would decrease the cost for victims of surprise medical bills, but just like the false promises of Obamacare, the LHCC would do nothing of the sort.

Solutions roundly supported by conservatives, like establishing a process of arbitration, would go a long way toward making the necessary healthcare reforms. But the LHCC takes a different turn. Instead, the bill would empower insurance companies to further abuse the healthcare system. By establishing price controls on what insurers need to pay, the bill would decrease physician reimbursement rates substantially. To save money, the LHCC would essentially force doctors to work for less. Where would those “savings” go? Into the coffers of the insurance companies, of course.

But more than that, the bill’s price controls are dictated by the median in-network rate for healthcare services—a price point which insurers have complete control over. Since insurers decide what doctors to cover on their plans, they would be able to control how high of rates they pay. To pad their bottom lines, insurance companies could game the system by removing the most expensive (and potentially best) doctors from their insurance rolls. That way, the median in-network rate for services would decrease, and insurance companies would get away with paying even less money. It would be a tragedy again reminiscent of Obamacare—if you like your doctor, you won’t get to keep him.

Just like Obamacare, the LHCC would harm the healthcare industry to benefit large corporate entities. Clearly, this reality has been lost on the majority of Americans. They are more apt to whistle past the graveyard, pretending that America’s healthcare system is just fine. But that just isn’t the case. It’s time for people to wake up to the fact that the U.S. healthcare system is under threat. And whether it’s Obamacare raising premiums, or the LHCC instituting harmful price controls, America’s crony insurers are primarily to blame.