The ACA shouldn’t be difficult to understand if you understand how insurance is supposed to work.
Take 300 people in a room. That’s your risk pool. We know by actuarial studies that 25 percent of them will develop cancer in their lifetime. Another 35 percent will suffer from heart disease and say, 15 percent will suffer accidents or other maladies. The problem is we don’t know who those people are.
So we band together and contribute into a fund. The more people in our risk pool the lower the cost to each of us because we are spreading the risk. That’s insurance in its purest form.
Some will need more coverage than others, and sooner. But that’s the luck of the draw. Eventually, as we grow old we will all need to tap into our fund to cover our medical expenses no matter how healthy we are early in our lives.
In order to work the pool needs to continuously add young, healthy members. The payoff to them is that money will be there if, and when, they get sick.
But that’s not how insurance works in the real world.
Insurance companies are profit-making enterprises. Their first duty is to maximize income for shareholders. They do that like any other profit-making company: Maximize revenues (premiums paid by you) and minimize expenses (payment for medical costs).
All of the things that Americans hate most about health insurance —denial of coverage for pre-existing conditions, caps on expenditures, high deductibles, high premium costs, limited coverage, cherry-picking customers —are aimed at minimizing expenses and maximizing profits.
The alternative to that system is government funded health care like you find in every other modern industrial country in the world except the United States. Why? Solely for political reasons. You’ve heard the arguments: That’s socialism! America is all about free enterprise!
So the ACA tried to create a public-private partnership. Profit-making companies could remain the providers of our health insurance with government controls to eliminate the worst abuses and foster competition.
The ACA then created pools through its health exchanges and invited health insurance companies to compete for customers.
Medicaid was expanded in states that would accept additional funds to cover more people higher up the income ladder.
For others, subsidies were put in place to help with the high premium costs. These subsidies were based on a sliding scale determined by family income. The higher the income, the lower the subsidy.
In exchange, people were offered policies that covered most services without caps and could not be denied coverage because of pre-existing conditions among other ObamaCare features.
In order for the ACA to work, everyone without company-supplied health insurance, needed to sign up for coverage. Remember? The idea is to spread the risk in order to lower the cost.
Many people, especially the young, figured out that they didn’t need to buy insurance because they were generally healthy. If they got sick, they knew they could simply go out and buy a policy because they couldn’t be denied for a pre-existing condition.
So the ACA imposed a tax penalty on those individuals instead. The money is used to help fund the ACA. Only seems fair.
Ideally, that’s how the ACA was supposed to work.
But the ACA is a creature of Congress. A key provision setting up a public option was killed at the behest of insurance lobbyists. The public option was designed to keep insurance companies honest and level the playing field for competition. Without it, insurance companies have gamed the system with ever rising premiums and high-deductible polices.
The tax penalties were watered down, making them ineffective.
Many red states controlled by Republicans refused the money to expand Medicaid, or refused to create local exchanges, crippling the program while throwing their constituents under the bus. Scratch an ObamaCare critic and they probably live in a state like Texas or Alabama.
In blue states like New York and Maryland, which fully support the ACA, it has worked much better.
Finally, Republican lawmakers and President Trump have waged an unrelenting propaganda campaign against the ACA, deriding it at every turn. Yet they have been unable in six years to come up with a better system.
You have to ask yourself at this point how important is your health to you? How devastating would it be to your family if you suffered a major illness?
The ACA can work if it’s fully supported and improved by our politicians and the current administration.
If not, wouldn’t it be better for everyone if we simply dedicated a portion of our taxes to pay for a public health system like Canada, Great Britain, France, Denmark, Sweden, Holland and every other modern country?
It’s time to end the politics and greed driving this debate.