Health Care Reform is Working

2011 figures from the US Census Bureau (shown above) show that the new health care reform law is accomplishing what it set out to do: the percentage of uninsured Americans is going down, folling very steep jumps in the previous two years:

  • Over 4 million more people had health care coverage in 2011 than in 2010.
  • For the first time in a decade, the rate of private health insurance coverage didn’t go down.
  • Biggest beneficiaries are  people between 19 and 25, whose uninsured rate dropped 2.2%.

These figures should only get better as more provisions of the law is fully implemented.

Facts vs. Rhetoric

In an election year, a great deal of rhetoric is to be expected, but the anti ACA rhetoric has been particularly egregious. For instance, claims by candidate Romney that Obamacare is unaffordable and fuels the deficit makes as little mathematical sense as his “impossible tax plan.”(Factcheck.org)

Since the ACA actually reduces the deficit, the nonpartisan Congressional Budget Office’s estimates  that repealing the law would increase the federal budget deficit by an estimated $109 billion between 2013 and 2022.  According to the CBO and Joint Committee on Taxation:

Specifically, we estimate that H.R. 6079 [the “Repeal of Obamacare Act,” which was passed by the GOP-led House on July 11] would reduce direct spending by $890 billion and reduce revenues by $1 trillion between 2013 and 2022, thus adding $109 billion to federal budget deficits over that period.

And that’s over and above the Romney tax proposals that would balloon the deficit by up to $3.7 billion. According to The Atlantic:

It’s a massive tax cut for the rich, a small tax cut for the middle class, and a tax hike for the poor. That adds up to mega-deficits. How mega? Well, the Tax Policy Center calculates Romney’s $25,000 cap would raise about $1.3 trillion over a decade — against almost $5 trillion in tax cuts over that period. And remember, that’s a $3.7 trillion hole relative to a world with the Bush tax cuts. It’s an almost $8 trillion dollar hole compared to a world with Bill Clinton-level taxes.

Needed More Than Ever

Reducing the cost of U.S. healthcare on a macro level is the next inevitable development regardless of who occupies the White House and Congress. The ACA doesn’t focus on significantly reducing health care costs. Attempts to do so have so far been misrepresented as “death panels.” While the ACA looks for cost savings to the the upstream providers, where the cost increases originate, Republican proposals would pass costs to Medicare recipients and patients. Since spiraling healthcare costs do not respond to market forces, with large hospital groups and pharmaceuticals having been very influential in resisting reform efforts, the best bet is to keep Obamacare in place and build on that foundation, as is now occurring in the state of Massachusetts.

Employers Do Not Plan to Drop Coverage

More evidence that the ACA is working is shown by Bruce Japsen of Forbes, who has highlighted a newly released study from the Midwest Business Group on Health of more than 110 small, medium and large employers based in 16 states with with workers across the country ranging from fewer than 1,000 workers to more than 5,000 employees. Represented are numerous national employers like Boeing, Ford Motor Company and Caterpillar.

The study shows that, despite the political debate over whether the Affordable Care Act will be an burden on business, “there is little indication that employers plan to drop health care coverage.”

Findings: Status Quo

The findings are summarized here. Key findings are that employers will maintain the status quo until the broader coverage and new benefits provided by the Affordable Care Act take full effect in 2014:

  • Most employers, especially those with more than 200 employees, will not drop employee benefit coverage in the foreseeable future.
  • Costs will likely go up on workers as employers continue the current trend of moving to consumer-directed health plans, which tend to have high deductibles.
  • 57% already offer consumer-directed health plans that work with health savings accounts or health reimbursement accounts.
  • That percentage will rise to 62% in 2013 and continue to rise steadily to 71% through 2018.

The Move to Consumer-Directed Plans Continues

This is one of several studies that confirms the increasing use of consumer-directed health plans. A recent study by Aon Hewitt (AON) showed that consumer-directed health plans have overtaken HMOs as an option offered by major employers. Still, Preferred Provider Organizations, or PPOs (which allow enrollees to go outside of the health plan’s network but at a higher cost) remain the most popular health plans offered by employers.

Consumer-directed-health plans allow employees to allocate a percentage of their salaries into an account (often with an employer-provided a match) to use toward their deductibles and co-payments. These plans save money on premiums as subscribers may use health services more judiciously and make better health choices in lieu of potentially unnecessary procedures or costly medicines. The ACA mandates that these plans offer preventative services for health maintenance that should also reduce healthcare costs over time.

Larry Boress, president and chief executive of Midwest Business Group summarizes the study’s findings:

After 2013, the majority of employers responded that they will be adjusting to the ‘new normal,’ making changes to their benefit design strategy in response to the post-ACA environment. The majority plan to continue to offer benefits.

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