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Wednesday, April 16th, 2014

The Challenge Ahead For US Healthcare Reforms

By Stephanie Pedersen

SUNDAY JULY 08, 2012

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Barack Obama at a healthcare rally at the University of Maryland. The rally took place on September 17th, 2009 as Obama tried to get the youth involved in the fight for healthcare reform.

The United States Supreme Court reached a landmark decision on June 28, upholding Obama’s Affordable Healthcare for America Act despite significant opposition to its implementation.

The Act was brought before the Supreme Court to decide on its constitutionality, with the main point of contention being whether or not the individual mandate constituted an unwarranted extension of federal power. The Act was upheld in a 5-4 ruling in favor, with the decision being read by Chief Justice John Roberts. The Court found that the Act is constitutional based on Congress’ ability to tax and thus by extension, the Act is indeed a warranted use of federal power.

The Affordable Healthcare for America Act seeks to ensure that all Americans will have medical insurance. Under the law, citizens are required to purchase medical insurance or be subject to a fine, effective 2014, that will be collected as a tax by the Internal Revenue Service. The law also prohibits insurance companies from refusing coverage to people on the basis of their medical history, gender or age. In order to implement these changes, the federal government will be responsible for providing funding to states to ensure that the Medicaid and Medicare programs will be sufficiently able to cover all new applicants.

However, despite its judicial success, the law still faces challenges prior to its full implementation and even further trials before its ultimate fulfilment can be actualized.

The November election and low public support

The most pressing threat to the law is the upcoming November election. Republican candidate Mitt Romney has promised that in the event of his election to the presidency, he will repeal the law and strip funding to it. His resistance to the Act and his desire to repeal it stem from Republican opposition to the Act, though Romney and the Republican Party have differed slightly in their reasons for opposing Obama’s healthcare reform.

The Republican Party has long claimed that the healthcare reform is a large tax grab on the middle class because it forces them to purchase healthcare insurance or pay a fine if they do not. This position has been reiterated by a number of Republican Party members and most recently by Senate Minority Leader Mitch McConnell. After the Supreme Court decision was read McConnell said, “The Chief Justice said this is a tax, and we take him at his word.” McConnell went on to say in a separate statement that, “Just because the Supreme Court has decided it is constitutional doesn’t mean it is the right thing to do.”

Prior to the Supreme Court ruling, Romney claimed that the fine was not a tax, but rather a penalty, the same kind of language that President Obama has used to describe it. However, once the ruling was made, Romney changed his language to describe the fine as a tax, contradicting what his senior advisor said earlier in the week when he stated that Romney regarded the fine as a penalty.

Romney’s use of semantics was striking, especially as his party has taken such a strong stance against the healthcare reform. However, as the Governor of Massachusetts, Romney levied a similar kind of healthcare fine on citizens who did not have insurance, resulting in Massachusetts having the lowest uninsured rate in the country. Obama has cited Romney’s program as being a model for his own version of healthcare reform.

Mitt Romney’s campaign website states that, “states should be able to construct a plan that fits their specific situation.” Indeed this is the current healthcare model that is currently in place, and it is one that is largely failing to facilitate a national standard for care. States have the responsibility of assigning eligibility to receive government funded medical insurance (Medicaid and Medicare) and this is precisely why there is such a large state-to-state discrepancy in terms of the number of people who have medical insurance.

An Obama victory in the November election would, at the very least, ensure four more years of protection for the Affordable Care Act and allow some time for a consistent implementation process to take root, as Obama has promised that he will veto any proposed legislation to cut funding to the healthcare reform endeavor.

A further challenge to the implementation of the Affordable Healthcare for America Act is the relatively low public support for the law. Polls consistently show that the majority view on the Act is less than favorable. In the months leading up to the Supreme Court decision, The New York Times/CBS News conducted polls that showed only 34% in favor of the legislation. A further fifth of the same respondents did not support the law because they claimed the reforms did not go far enough in providing adequate coverage. Individual aspects of the law have been comparatively well-received, however, with 85% of respondents to the same poll supporting the specification that insurance companies cannot turn down applicants on the basis of pre-existing conditions.

In March of 2010 when the law was passed, The New York Times/CBS News reported that only 32% of citizens were in favor of it. Obama had promised an extensive educational campaign aiming to inform citizens on the issue. However, this has not come to fruition. A month after the law was passed, in April 2010, The White House hired Stephanie Cutter, a well known Democrat strategist to serve as head of the outreach campaign. Only four months later Cutter was reassigned to the President’s senior advisor’s staff. This has left a void in the campaign’s leadership and many Americans still unaware of what the exact provisions of the law entail. This may have contributed to a sense of wariness toward the law, which bred some of its unpopularity. Indeed the aforementioned poll found in March 2012 that 48% of respondents considered the law “confusing.”

Furthermore, according to Kantar Media’s Campaign Media Analysis Group, opposition groups to the law have spent significantly more money on campaigns attacking the Act (approximately $235 million) than groups supporting the Act have spent (approximately $69 million).

State opposition to implementation and future challenges

In the event that Obama is able to win the November election and begin the implementation process of the Act, he will still face considerable opposition from Republican governors, who are refusing to cooperate in the application of the law in their states. Some of the states refusing to cooperate are Alabama, Mississippi, Florida, Louisiana, South Carolina, Texas and Tennessee. The states refusing to cooperate with the healthcare reform are also those most in need of it. Texas has one of the country’s lowest uninsured rates and according to the U.S. Census for 2011 Texas, South Carolina, Tennessee and Mississippi are all states with some of the highest poverty rates in the country. All rank within the top ten with Mississippi ranking first.

Ezra Klein, columnist for The Washington Post recently wrote a column on Republican refusal to participate in the healthcare reforms. He makes an argument that Republican states will find the healthcare deal “too good to refuse” participation. Klein states, “The deal the federal government is offering states on Medicaid is too good to refuse. And that’s particularly true for red states. If Mitt Romney loses the election and the Republicans lose their chance to repeal the Affordable Care Act, they’re going to end up participating in the law. They can’t afford not to."

The federal and state governments share the cost of the Medicaid program, though states are responsible for eligibility parameters. In a state like Texas, where eligibility for working adults is up to 26% of the poverty line (the poverty line being $11 170), a large portion of the impoverished population is left uncovered by medical insurance. Generally speaking, most people without health insurance will not seek medical assistance when they become ill. In the event that they do urgently need care, they are often forced to pay with cash. However, this can put a large strain on those with limited incomes, especially when it forces a choice between healthcare or such necessities as groceries. Free clinics are available to people without medical insurance, though often operate with limited resources.

The Affordable Care Act will have Medicaid eligibility cover working adults up to 133% above the poverty line. The federal government will pay the difference between where states are now and where they should be. Interestingly, in his column, Klein quotes a study by The Kaiser Family Foundation which found that of the top ten beneficiaries of the new law (states that have the lowest levels of uninsured), nine of them went to John McCain in the 2008 election, whereas of the ten states that will receive the least amount of funding under the law, eight of them went to President Obama. To convince the states to participate in the reforms would fundamentally go against the ideology of the Republican Party, presenting another hurdle for the law.

However, political science Professor Renan Levine from the University of Toronto explains that while the federal government has a number of tricks to compel cooperation, they might not need to use them.

“The federal government has a large arsenal of carrots and sticks they can use to compel states to implement aspects of the Affordable Care Act. However, I doubt that a re-elected President Obama would choose to use any of them, even if the Democrats win control again of both houses (a not very likely scenario). Instead, Obama and the Democrats will hope that when residents of those states [get] a chance to see the impact the ACA will have elsewhere, what they are missing and what impact these changes will have on the budget, they will not need to use any carrots or sticks,” explains Levine.

A further problem that the Affordable Care Act will not be able to address is that beyond the millions of Americans who will be both eligible and able to purchase medical insurance, millions more will still be without coverage. This includes illegal immigrants who are ineligible for coverage, and those who, despite subsidies, are too impoverished to purchase it. By 2019, there will still be an estimated 17 million who remain uninsured. However, this is comparably positive in contrast to the estimated 54 million who would be uninsured without the Affordable Care Act.

The estimated total cost for Obama’s healthcare reform is roughly $1 trillion. In order to be able to afford this cost, the federal government will be forced to cut federal spending in other areas, especially in light of the growing deficit. Officials are already looking into where the federal budgets can be trimmed in the coming years, especially considering the warnings of experts that in twelve years the main fund for federal spending on Medicare will be close to empty.

Furthermore, the American healthcare system will have to grow and change to support the future medical needs of its nearly 77 million aging baby boomers. With the current state of the healthcare system, these numbers will certainly put a strain on accommodation practices.

The future of Obamacare

Despite June’s judicial victory, Obama’s healthcare reforms still face a number of major challenges before the process can finally be deemed a success, the most serious of which is the upcoming November election. If Obama loses the election, Americans can all but say goodbye to their new healthcare deal. This will inevitably result in thousands more citizens accumulating increasing debt due to the high costs of healthcare in the US. Compounded by an already suffering economy, this may produce more complex and distressing social and economic challenges.

But the healthcare reforms are clearly heading in an encouraging direction, especially because Obama’s reforms recognize a basic right to affordable healthcare. Though Republican critics raise an important consideration when they criticize the huge cost of the endeavour, it is also integral to contemplate the future reality of having no reform process at all.

Liberal critics suggest that Obama’s reforms are not going far enough because they are not sufficiently dismantling the current healthcare system. Rather, the reforms are building on what is already in place in an attempt to accommodate as many people as possible. These critics are calling for universally subsidized healthcare.

It is difficult to conclude whether or not Obama’s reforms will be successful. Their prosperity, however, is highly dependent upon the outcome of the November election. In a speech made immediately after the Supreme Court Ruling, Mitt Romney said, “If we want to get rid of Obamacare, we’re going to have to replace President Obama.” Congress will hold a “symbolic” repeal vote on July 11, led by Republican House Leader Eric Cantor. Based on this, healthcare will surely be a contentious issue in the upcoming debates, and a catalyst for discussions of an emerging American right to healthcare.