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Tags: obama | obamacare | aca | health insurance

Fortune: 5 Reasons Why Obama Is Wrong About Obamacare

Fortune: 5 Reasons Why Obama Is Wrong About Obamacare

(Getty Images/Joe Raedle)

By    |   Thursday, 25 August 2016 05:00 PM EDT

Despite President Barack Obama's recent defense of his signature accomplishment in an editorial in Journal of the American Medical Association, Fortune.com has compiled a handful of reasons why the president is wrong about his health-care overhaul.

In “United States Health Care Reform, Progress and Next Steps,” Obama defends the Affordable Care Act (ACA), claiming it has has “succeeded by sharply increasing insurance coverage” and created “a sustained period of slow growth in health care spending.”

Obama also admits “the work is not over,” and that the U.S. needs to raise subsidies to make costly policies for middle class families far more affordable. He also advocates a “public option” in areas where consumers have few choices in purchasing insurance.

But in the same issue, the medical journal published a critical analysis of Obamacare by Stuart Butler, a senior fellow in economic studies at the Brookings Institution.

While Butler praised the law for bringing coverage to millions of uninsured Americans, he concludes that the “most fundamental aspects need to be rethought.”

Butler’s point: The law’s main legacy is raising enrollment in Medicaid, not drawing Americans to the health care exchanges that were supposed to emerge dominant. Has Obamacare really tamed previously fast-rising costs for years to come? "Butler concludes that the president’s grandiose claim is probably wrong," Fortune reports. 

"Let’s forget ideology and examine what we really know about Obamacare’s successes, failures, and what it promises for the future. Drawing from Butler’s critique and an exhaustive study of the federal spending on health insurance published by the Congressional Budget Office (CBO) in March," Fortune's Shawn Tully compiled a list detailing why he thinks the president is just wrong about his health-care revamp.

1. It's too expensive for the middle class.

"The healthcare exchanges were supposed to be offer private plans that middle-income families could both afford them and get the kind of broad coverage usually offered by employers. The policies are a good deal for families just over the ACA’s Medicaid poverty level. For them, the premiums are paid by federal subsidies," Fortune said. "But middle income families are being forced to pay a lot, if not most, of the premiums themselves. They are not just expensive, they are overpriced for what you get, says Butler. “As a result, middle-class families are choosing the lowest-cost ‘bronze’ policies that mainly cover catastrophic care, and most other expenses are paid by the patients through high deductibles,” Butler told Fortune.

2. Without improvement, it won’t cover the uninsured.

To be sure, Obamacare has sharply increased the ranks of Americans with health care coverage. From its enactment in 2010 through 2015, the ACA lowered the number of uninsured to 26 million from 49 million. But according to the CBO, the number of uninsured will actually increase to around 28 million by 2026, and remain steady at approximately 10% of the U.S. population under 65. "The reason: The high cost of those exchange plans means that folks will keep shunning them––unless future presidents substantially raise subsidies, a big challenge for future federal budgets," Fortune said,

3. Don't look now, but what is that mountain of future costs ahead of us?

The CBO projects a rapid escalation in government-paid and subsidized health care costs in the coming decade. The agency projects that from this year through 2026, the amount the federal government spends on coverage for Americans under age 65 will grow from $660 billion annually to $1.1 trillion, or 5.4% a year. "Of that cumulative $8.9 trillion in spending, subsidies through the exchanges and costs of ACA Medicaid plan will account for $1.9 trillion, or 21%. That’s $1.9 trillion in new programs that didn’t exist a few years ago," Fortune reported.

4. Even more insurers may quit.

In his article, Obama asks Congress to allow states to provide a Medicare-like “public option” in areas where two or fewer insurers offer coverage, and hence competition isn’t sufficiently robust. That plank was a pillar of several of the early Obamacare proposals, but didn’t make the final law. “It would be a mistake,” Butler told Fortune. “It’s the government, which runs the exchanges, competing against private companies.” Aetna, UnitedHealth Group and other insurers are already exiting state exchanges. The idea that a public option exists and may spread would make it a lot more likely others would leave, and discourage new insurers from entering the market, Fortune predicted.

5. '1332': Let the states decide.

Surprisingly, the ACA contains a radical proposal that, though it’s mostly overlooked, could reshape the future of U.S. health care. It’s a provision called “1332” that starting in 2017 allows states to request waivers allowing them to exit Obamacare if they can meet its requirements for coverage and out-of-pocket costs to consumers.

In addition to all of this, the National Bureau of Economic Research recently published a study that found Obamacare had not made switching jobs any easier for workers, as some had promised. 

Meanwhile, when push comes to shove, moderate Republicans battling for their political survival are not showing an appetite to rave about repealing Obamacare on the campaign trail, Politico reports.

Campaigning on a strategy of removing healthcare benefits from millions of Americans is not a winning strategy when you're in danger of losing your seat to a Democrat.

"When I ran, I said I'm not going to vote for repeal of Obamacare unless there is a replacement or repeal and replace," Rep. John Katko, R-NY, told Politico. "There wasn't (a replacement) and I'm not going to beat my head."

Katko was one of three Republicans, joining Bob Dold of Illinois and Bruce Poliquin of Maine, who broke with the party and voted against repeal in January of 2015, Politico reports.

Further kicking the issue of repeal to the curb are the burning issues of terrorism, free trade and immigration, topics that are core to GOP nominee Donald Trump's campaign.

"I've seen (candidates) talk about it here or there but it's not dominating what they're talking about in the districts," a GOP strategist told Politico. "This is definitely an unpopular law, but when you have the violence going on in the Middle East, it is going to take precedence over a flawed law that people are frustrated with."

(Newsmax wire services contributed to this report).

© 2023 Newsmax Finance. All rights reserved.

Despite President Barack Obama's defense of his signature accomplishment in an editorial in Journal of the American Medical Association, Fortune.com has compiled a handful of reasons why the president is wrong about his health-care overhaul.
obama, obamacare, aca, health insurance
Thursday, 25 August 2016 05:00 PM
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