Jan 6, 2014
The following comes from the text of a public presentation given in Los Angeles in November.
The health care reform, known as the Affordable Care Act, was the politicians’ promise to millions of Americans that they could now have adequate health insurance.
Nearly 50 million people in the U.S. are today without health insurance. Eight million more are uninsured some period of time every year. And many are underinsured, people who have insurance but still spend a significant percentage of their income on health care –another 30 million. Together, the uninsured and underinsured made up nearly half the U.S. adult population in 2012.
For those who can’t afford available insurance plans, the ACA promised subsidies for people and families whose income fell between 138% and 400% of the Federal Poverty Level. For those below 138%, Medicaid, the federal aid program for the poor, would be expanded.
That was the promise.
On October 1, health exchanges in 16 states and D.C., and the federal exchange that serves the remaining 34 states, opened. Millions of people logged into the exchanges’ websites to choose from among the insurance plans offered by private insurance companies.
The result was … total chaos.
The websites, especially the federal website, kept crashing, and even when the websites worked, people who tried to pick up a plan and enroll didn’t fully know their options.
The glitches and technical problems of the websites are symptoms of the real problem, not the cause. There are 150 private insurance companies competing for each cent of premium from each applicant. They are all trying to figure out how much to charge each applicant, checking age, residence, health care history, previous insurance, etc., etc. Plus the computer systems of nine different government agencies are checking whether an applicant qualifies for a subsidy and how much.
So they ended up with a monstrosity of a website.
But the insurance companies made the chaos even worse – by cancelling existing policies right and left, to be able to sell these customers more expensive policies, using the new law as an excuse. The number of cancelled policies reached millions – estimated at five million total.
By the end of 2013, four million of the eight million people eligible to do so had enrolled in Medicaid, while only two million enrolled through the federal and state sites for private insurance.
The enrollment is so low, precisely because the available private plans are so expensive!
Just to give some numbers, a family of two 41-year-old adults and an under-18 dependent, living in Glendale, California and making $51,900 a year, qualifies for a federal subsidy. But the cheapest bronze plan will cost this family about $200 a month AFTER the federal subsidy (the plan costs $476 a month without subsidy – and remember it’s a bronze 60/40!). So this family will have to pay $2,400 a year, for a plan that dumps 40% of medical costs on the insured, has a $5,000 annual deductible for medical expenses and drugs, and a $60 co-pay for a primary care visit!
Glendale is not alone.
Now by law, everybody has to buy health insurance from a private company. The ACA puts the responsibility of buying health insurance on the individual. The subsidies work to provide the medical industry with customers who can’t afford medicine’s outrageous prices.
But if you don’t buy insurance? (Which many people probably will opt for because, even after the subsidy, the less expensive plans are worth practically nothing.) You’ll pay a fine, to be added to your taxes at the end of the year. In 2014, the fine is $95 or 2.5% of the person’s income, whichever is higher. And it will go up every year after that.
Note that this “individual mandate” takes the “responsibility” of providing health coverage from the shoulders of employers – a “responsibility” which they have been shedding more and more anyway.
So the medical industry has been losing customers in recent years, and in a big way.
In the three years between 2007 and 2010 alone, insurance companies lost 10 million customers in employer-sponsored plans, that is, one out of every six they had in 2007. That trend has been continuing – companies have been eliminating jobs, hours (full-time to part-time and on-call) and benefits to cut their own costs.
No surprise that the ACA was written by the medical industry – those same big corporations that profit from the existing health care system in the U.S. The only thing this reform extends is what we already have – a health care system run by private interests, for their own profit.
The subsidy is nothing but another government handout to big corporations that are already enormously profitable – a huge handout, as a matter of fact. According to the New York Times, just the subsidies, paid directly to insurers from the U.S. Treasury, are expected to total more than one TRILLION dollars over 10 years!
Expanding Medicaid amounts to another big subsidy for companies that have a low-wage work force, such as Walmart and McDonald’s, who will now be able to push even more of their workers into Medicaid, shifting costs onto taxpayers and increasing their profits.
Yes, the available insurance plans are all expensive, ACA supporters say, but at least insurance companies now have to provide essential health benefits, such as maternity, mental health, prescription drugs.
In fact, even with these minimum coverage requirements, the Obama administration admits that the least expensive plans are not worth buying. To people who qualify for the federal subsidy, the administration recommends to spend some money out of their pockets and buy a “silver” plan instead of a “bronze” that doesn’t really cover anything else but those “essentials,” saddled with high deductibles and co-pays.
OK, ACA supporters say, but now insurance companies don’t have a right to reject people with pre-existing conditions, as they have been doing.
Yes, but these people will still depend on the insurance companies. And those insurance companies are already undermining the care their new customers will get, even before the customers buy the policies. They severely restrict provider networks. People will not get the care they need, whether insurance companies call the way their body functions a “pre-existing condition” or not.
As a whole, the ACA makes us all pay a very steep price for health care.
People who qualify for the federal subsidy will find their subsidy status will change as they move in and out of jobs. Many will actually have to pay the credit back, and pay more in premiums too. A study published in Health Affairs magazine in September estimated that 38%, or more than one in three, of families that qualify for federal premium subsidies will have to repay some portion of the subsidy, with a median repayment of $857.
People who supposedly qualify for the expanded Medicaid, if they live in the 25 states that did NOT expand Medicaid, won’t have any coverage.
Even where Medicaid is available to people, there is the problem of eligibility. Eligibility will change by the month. Another study in Health Affairs found that in over a year 50% of people will be tossed in and out of Medicaid because their eligibility will change.
The people who newly qualify for Medicaid will be entering a system hit by big budget cuts in recent years. Medicaid recipients have already been paying higher co-pays and premiums. Medi-Cal, California’s program, underwent some severe cuts in recent years. In 2011, Governor Jerry Brown cut Medi-Cal reimbursements across the board to providers – a move that needed, and got, the approval of the Obama administration. As a result, only 57% of California physicians accept new Medi-Cal patients. And this cut, made and approved by Democrats, followed the cuts made about five years ago by the then-governor, the Republican Schwarzenegger, which restricted different types of care for Medi-Cal patients, such as vision and dental, and imposed higher co-pays and premiums too.
Finally, if you have employer-sponsored health insurance – things will change for you also, in the same direction they have been changing already. Companies, and also the public sector, have been eliminating benefits aggressively in recent years.
This “reform” gives employers incentives to dump more workers from health benefits. IBM and Time Warner are already pushing retirees to private exchanges. Trader Joe’s and Home Depot are shifting part-time workers to ACA exchanges, while Walgreens is moving all of its employees – all 160,000 of them – to a private exchange next year.
The ACA is providing the companies with a justification for reducing benefits: the so-called “Cadillac tax.” This ACA, which has nothing to say about controlling the cost of insurance plans on the exchanges, claims to deal with the cost issue with a 40% tax on “Cadillac” (sometimes also called “gold-plated”) insurance plans.
Now, what exactly constitutes a Cadillac plan? Is this the kind of plan that millionaires and corporate executives have, as the name suggests? Well no, a Cadillac plan can easily be the plan that a retired worker has, because the ACA defines Cadillac status by the amount of premiums – and insurance companies charge high premiums if you are older.
This tax doesn’t go into effect until 2018; but 2018 is already here, because insurance companies are already using the Cadillac tax as an excuse to increase deductibles and other out-of-pocket costs (as a way to reduce premiums, they say).
Of course, companies have been doing all these things already, for years.
This so-called health care “reform” is a continuation of what we had before – people, and all of us as a society – are paying more and more for health care, and getting less and less care.
Workers who have coverage have been paying more and more for it. Last year alone, workers’ share of the cost of a family policy jumped an average of 14%, an increase of about $500 a year – while the cost of a policy increased just 3%.
From 2000 to 2011, U.S. health care spending increased from $1.6 trillion to $2.7 trillion, amounting to 17.9% of the U.S. GDP in 2011. And for all this spending, the amount of health care the U.S. population gets is declining. A 2012 survey found that a total of 80 million Americans did not get care that year because of the cost; 75 million had difficulty paying medical bills; and, over two years, 4 million went bankrupt as a result.
So if all this money we are paying is not going to health care – where is it going?
To profits, of course – and for the entire capitalist class. Insurance companies – that’s finance, that is, Wall Street. And as in every sector of the industry, big medical corporations are intertwined – the big shareholders in the big companies are the same big capitalists.
The capital class seeks to profit off of sickness, like it does off of everything else. But access to medical care is literally a question of life or death. Like food, air, or water, people need health care to live, and human beings deserve the right to these things without going through capitalist middle-men. When the working class starts to move and deal with the problems this sick capitalist system has created, making sure everyone has the right to medical care will be high on the list.