ObamaCare’s Sticking Points

ObamaCare’s “Sticking Points” Problems With the ACA as it Stands

Out-of-pocket costs, the GOP’s rejection of Medicaid, the family glitch, and premium increases. These are ObamaCare’s sticking points.

I use the term “Sticking Points” for problem areas that present obstacles to progress toward an agreement or goal.

ObamaCare’s Sticking Points

The following list are what we consider to be ObamaCare’s sticking points (AKA a list of problem areas of the Affordable Care Act).

• There is no public option. People are required to buy a private product. Conservatives may like the free-market, but others would rather be paying into a group fund. Americans should have options.
• Covered Preventive services are confusing. Sure, some preventive services are free, but coordinating which are free and which aren’t is very far from simple. People are constantly confused by this. The intention behind this provision is good, but it seems to need clarification.
• There is way too much paperwork. The tax forms are confusing, and even worse some folks have been stuck waiting for ECNs and 1095-a forms well passed tax filing. The 1095-a stuff should really happen online, not in the mail, it is just asking for trouble!
• Having to pay a fee for opting out of an employer plan or being forced to take the plan. This is unworkable when a person has two full-time jobs.
• Insurers only offer monthly contracts, but the law requires 12 months of coverage. Thus, many plan drops are cheating people out of money and benefiting insurers.
• The subsidy cliff for those making over 400% of the poverty level takes away the incentive to earn. This should phase out slowly.
• Employee and employer cost spiked with essential health benefits, yet they got no assistance aside from increased employer subsidization. Subsidies for employers are substantial in terms of government spending, but hard to appreciate as an employee.
• Even the ACA leaves 26 million uninsured. It is much better than TrumpCare’s 52 million but far from universal coverage.
• The American people should have the right to “opt-out.” Our values demand it. Even though it makes things difficult, we should ideally have opt-outs and no mandate unless the people get something for it. If there is a mandate, it should come with basic coverage and an opt-out. TIP: An opt-out can still include a fee for future hospital use, or basic catastrophic care, but as long as we “force” people, some voters will always stand against it. This is about American values, not bottom lines.
• People have to project their incomes for tax credits; this almost ensures that about half of them will have to pay back excess credits. Repaying advanced tax credits has too much negative psychology. When people get an advance, and then have to pay back money and get a smaller refund a full year and half later, it is both confusing and aggravating. This is human nature. Throw out your technocratic balance book and your economic theory; this is physiological, not economic.
• Assistance is based on annual income, but many people live month-to-month. Workers who earn in the first part of the year, but then lose coverage, can end up being barred from assistance because assistance is based on annual income. Likewise, those who take assistance at the start of the year and then earn more could (to the point above) very well end up having to pay assistance back. This can disincentive going back to work mid-year, and can be a shock for those who lose employment and are assuming they will have assistance options.
• When you opt out of Obamacare (by not getting coverage) you don’t get anything for it. Maybe you should get basic catastrophic coverage when you pay the fee. Americans are not well suited for being “forced.” It seems like a mistake to charge a tax for nothing. I understand why it was done and that it was the only way the politicians of that era could see, but it had a polarizing negative effect.
• People traveling out of the country can still end up having to comply with the mandate, which is strange.
• The requirements for very small businesses regarding HRAs makes things unnecessarily hard for small businesses.
• It seems odd that Workers’ comp does not count as MEC. I’m sure some people collecting workers’ comp feel as though they have coverage. They have already been hurt on the job; now they are getting punished.

TIP: Feel free to ask questions or comment below.

Other Sticking Points

Aside from the list above, I would also point to the following sticking points.

Political sticking points and problems: Americans, who don’t like being “forced” to do anything, are “forced” to get coverage or pay a fee. The fee doesn’t give them anything, not even coverage against catastrophic events. Those with employer coverage feel as though they are seeing a rate hike and paying more for working. This has turned Conservatives against the Democratic Party. Republicans have attempted to “break ObamaCare” and show their constituents how bad it is by making it bad for them. Playing politics with health care has caused trouble in our democracy. The virtues of healthcare reform have been overshadowed by party politics and half truths. Both the left and the right are guilty here, and the people deserve a workable solution.

The Republican-specific sticking points are related to efforts to break ObamaCare by de-funding it and rejecting its provisions. There are a few other sticking points as well. I already covered many Democratic Party problems above like using economic force and not considering all economic aspects of some of the law.

Republicans aren’t trying to achieve better healthcare at the provider level and aren’t seeking universal health care. They are so focused on economics and rewarding workers and employers (and not rewarding those who they feel don’t contribute enough) that they have gone as far to deny millions Medicaid. It hurts providers when they can’t deliver care to the community and are uncertain of demand. The current system that includes tens of millions based on cost is not very economical or moral.

Many arguments in the past have been about morals vs. economics. Liberals fought for morals and conservatives for economics, but this conversation has become so skewed it isn’t about “economics” or “values” any longer. It is about giving very specific industries (like large employers and insurers) what they want while ignoring the needs of the 320 million AND doing almost literally nothing for providers. The Republican values in healthcare seem to be related to factors like premium cost and profit margins.

Trump promised more. I know many conservatives want more. We cannot ignore healthcare and healthcare providers and cannot succeed in the long-term unless we provide health care that people want.

TIP: The ACA has problems even though the legislation which was passed by both parties. TrumpCare cut taxes for the rich, offered a little extra assistance to those above the subsidy cliff, and got rid of the mandate. It would have also created many new problems. Perhaps we can make progress moving forward by fixing the problems that we know to exist rather than trying to repeal the ACA, have no healthcare system in place, and build a new system which will have new problems.

Out-of-Pocket Costs

The facts:  In 2016, your out-of-pocket maximum could be no more than $6,850 for an individual plan and $13,700 for a family plan before marketplace subsidies.

The problem: Even with cost sharing reduction subsidies this is not affordable. Do you know a family who can afford another $13,700 a year? I don’t know a family that can either.

The solution: The government can subsidize, regulate, and tax. I think we have all had just about enough taxes. Subsidies mean taxes or debt. That leaves finding super profitable industries that are willing to be regulated.

We likely need to regulate to avoid personal and national debt. Health care creates jobs and wealth, so it will be hard to regulate in any meaningful way. People like profit.

Rejecting Medicaid

The facts: A lawsuit backed by the right had the NFIB take the ACA to court. During this 2012 case, they gutted Medicaid expansion letting states opt-out. States opted-out and left the poorest to believe the ACA was the problem. They cited cost as an issue. The cost of insurance is an issue, but so is the cost of leaving people without medical care.

The problem: Medicaid is expensive; there isn’t a simple solution. Still, five million plus working poor Americans are going without healthcare as politicians stuff bills full of pork and the inequality gap in America widens. These 5 million are being used as pawns in a political game, and we are all a little worse off for it.

The solution: Expand Medicaid. Or maybe even expand Medicaid to all and let the private market take care of supplemental coverage. Medicaid for all is not Medicare for all, so you didn’t already say no.

Consider offering catastrophic coverage to all citizens who can’t afford to pay into the health insurance system instead of taxing them. With great power comes great responsibility. It always has.

The Family Glitch

The facts: There are no rules for how much employer offered spousal or family coverage can cost. There are rules that say you can’t get cost assistance unless an employer offers coverage that costs more than 9.5% of MAGI per person.

The problem: Asking each household member to pay 10% of their income in health insurance premiums (never mind out-of-pocket costs) IS INSANE. How did this legislation pass? Isn’t someone supposed to care about working families and small businesses?

The solution: The same rules should apply inside and outside the workplace for insurance costs. Coordinating that isn’t simple, but there are a few ways this could work. It’s very important and feels like it’s been all but ignored.

Consider, working American families are overpaying, and that means employers are overpaying. Remind me who benefits from this again?

Premium Increases

The facts: Premiums were rising faster than inflation. The ACA curbed that a bit in the long-term, but the short-term is brutal. Insurers are losing money; Americans are losing money. Wait, again, who is making money?

The problem: Few people can afford premiums without assistance. We can offer assistance to people, but we can’t offer assistance to America (because we are America). We can’t go into un-payable debt over healthcare.

The solution: We have to look at why costs are high, not how we can subsidize and tax away the costs. Look at the budget. Health care isn’t and shouldn’t be free, but it can’t be unaffordable.

Consider: A single payer system that offers catastrophic coverage has many benefits. Catastrophic drugs and treatments are price controlled; litigation and billing are dealt with; the system is simplified. We let the private market handle supplemental coverage. This lets the strong healthcare players survive and takes the burden of propping up the system on the average American.

Conclusion

We don’t need to repeal the 1,000 pages of provisions in the ACA. We know what the problems are. Let’s ask our representatives to fix them.

Solutions can be simple. We can replace tax credits, Medicaid, and Medicare with a single payer catastrophic and essential coverage. We can keep HSAs and fund them with tax credits. We can give the new CMS/HHS more power to advocate on behalf of the people, and cut out the middle-men we can no longer afford. Nobody wants death by taxes or death by over-regulation.

Healthcare is one of the big three spending sectors. Sooner or later, someone needs to rip the bandaids off and heal the wounds. In the long run, we cannot choose corporations over people.

TIP: See our page on “a fix for the ACA” for more ideas on how to fix what isn’t working.