In November of next year, Americans will head to the polling stations to vote for a new president. What legacy will Barack Obama leave after nearly seven years in the White House?
One of his most important political projects, the so-called ‘Obamacare’ law, has divided the nation among partisan lines. For three years, the Republican Party has been fighting to overturn the bill. A current presidential candidate for the party has even compared the law to slavery. Why is this law so heatedly debated amongst Americans? And what exactly does it entail?
The biggest healthcare overhaul since Medicaid
When Barack Obama came into office in 2008, millions of Americans were falling through the gaps of social security. They had no health insurance coverage, neither from their employers nor through US government programmes for the poor and elderly. At some point, almost one in five Americans were affected. However, under Obamacare, officially named the Affordable Care Act, all Americans were required to obtain health insurance.
To make this possible, the government offers subsidies for those who cannot afford the insurance premiums. Under a provision that only took effect this year, businesses with more than fifty full-time employees are required to offer coverage for their workers. Online marketplaces were created to allow citizens to compare the pros and cons of different coverage packages. ACA now bans insurance companies from denying coverage to people with pre-existing medical issues. It also allows young people to stay on their parents’ plans up to the age of 26 and expands the rollout of the government health program “Medicaid” for the poor.
Obamacare has been the most radical reform in the past forty-five years.
The introduction of the Affordable Care Act was the biggest change in the US health system since 1965, when Medicaid and Medicare were signed into law. Medicare, a federal programme, covers hospital and care costs for elderly and disabled Americans and Medicaid, whose administration is mostly left to the states, provides healthcare benefits for low-income households. More than 44 million Americans were enrolled in Medicare (2008) and 40 million were eligible for Medicaid. In 2007, the two programmes cost over 750 billion dollars.
In summer 2009, Democrats laid out a 1,000 page plan for healthcare reform. While Congress begins digesting the details, many voters were taken by surprise by the radical changes the Obama administration was seeking after only eight months in office. In winter of that year, both Senate and the House of Representatives passed their version of a healthcare bill. On March 21, 2010, the House approved the Senate’s bill by 219 to 212 votes. Every Republican voted against it. Two days later, Obama signed the Affordable Care Act into law.
Obama’s false promise
With changes this drastic, understandably many looked critically at Obama’s plans. What about the provision ordering companies with fifty or more full-time workers to cover their workforce? Some argued this would lead to businesses simply cutting work hours below the full-time threshold. Most importantly, however, was the question that millions of Americans asked: could they keep their existing healthcare plans?
When this question had emerged as primary worry of Americans, the Obama administration tirelessly repeated that there was really nothing to worry about. In a weekly address in June 2009, President Obama said: “If you like your doctor, you can keep your doctor. If you like your health care plan, you can keep your health care plan“. A few weeks later, at a press conference, he repeated: “If you like your plan and your doctor, you won’t have to do a thing. You keep your plan. You keep your doctor.“. In July of that year, he made the same remark in the White House Rose Garden.
When insurers sent out hundreds of thousands cancellation letters in 2013, it had become clear that Obama had broken a key promise.
In 2013, as key parts of the ACA came into effect, insurance companies sent out hundreds of thousands of cancellation letters to customers nationwide. This happened contrary to what the people had been told by the Obama administration. Associated Press later claimed that some 4.7million Americans lost coverage due to Obamacare.
However, this figure is widely seen as exaggerated. Another organisation, the Urban Institute, detailed discrepancies in the AP tally and concluding the actual number to be around 2.6 million. One also needs to take into consideration that many will have, by now, found new plans and that, in any case, analysis shows that most customers change their plans after two years or less. None of this bothers the anti-Obamacare pundits, who continue to state the false figure of 4.7 million.
Nevertheless, people did lose coverage due to the ACA, which means that Obama broke his promise. His statement, ‘If you like your plan you can keep it’, was selected to be the 2013 Lie of the Year by PolitiFact (a research project by the Tampa Bay Times rating the truthfulness of politicians’ statements).
Busting the Obamacare myths
Even five years after the Affordable Care Act was passed, the jungle of confusing numbers remains. Was the law a success or failure? Let’s look at some key claims by supporters and opponents of the ACA.
- Obamacare critics: Because employers have to insure workers with more than 30 weekly hours, businesses cut down worker’s hours to below that threshold.
False. The number of workers with less than thirty working hours per week has been stable between 2013 and 2014, according to ADP Research Institute. The number of part-time workers has been constantly declining over the past years.
- Obamacare supporters: the Affordable Care Act has reduced the number of uninsured Americans.
True. In 2009, 48.6 million Americans were uninsured. By 2014, that number was down to 36 million, meaning more than twelve million citizens had gained insurance coverage in the meantime.
- Obamacare critics: Premiums have been skyrocketing under the ACA.
Debatable. The available data on premium costs varies extremely and is inconclusive. A paper by Yale scholar Amanda E. Kowalski claimed that in 2014, premium costs were 25 percent higher than they would have been if they had simply followed ‘state-level seasonally adjusted trends’ – in other words, Kowalski blames the price hike on the ACA. There is a major flaw in her work, however: she does not consider the subsidies the government gives to many low-income citizens. In 37 U.S. states, 8 out of 10 individuals were eligible for those subsidies, premium tax credits, which average 105 $ per month. Another study conducted by the McKinsey center for US Health System Reform found that 65 % of existing plans have seen a median premium rise of 4 percent. And a study by the Commonwealth Fund found that on average, premium price increase was one percent lower between 2010 and 2013 than between 2003 and 2010 (4.1% v. 5.1%), but also noted that in a number of states, including Colorado, Indiana and Ohio, premium costs grew at high rates. As premiums have a general trend of going up and rates vary from state to state, it is extremely difficult to find a valid answer to this claim. In any case, be wary of politicians with seemingly simple answers to the question of premium increases.
- Obamacare critics: “This fatally-flawed law imposes job-killing mandates, causes spending to skyrocket by 1.7 trillion $, raises taxes by $1 trillion and drives up healthcare costs” (Republican presidential hopeful Jeb Bush)
Misleading. While the the numbers are factually correct and cite a credible report by the Congressional Budget Office (CBO), the original CBO data also mentions that the law pays for itself due to taxes and savings in Medicaid. The law is projected to reduce the deficit by more than 350 billion dollars overall.
The three-year plot to reverse Obamacare
From its first day, the Affordable Care Act has been under heavy fire from the Republicans, the American conservative party. Since 2011, the GOP (Grand Old Party, i.e. Republicans) has voted 54 times in the House on bills that would have reversed or altered the ACA. Current GOP presidential hopeful Ben Carson calling it the ‘worst thing that happened in this country since slavery’.
In fall of 2013, the government was approaching a fiscal cliff: if Congress did not approve additional funding, the Obama administration would not have enough financial resources to keep operating. In September, the Republican-controlled House agreed to keep the government funded if Obama agreed to defund the Affordable Care Act. Four days later, Texas Republican Senator Ted Cruz held a twenty-one hour speech against Obamacare.
On September 27, the Democratic majority in the Senate rejected the House’s conditions. Understandably, they were not going to let Republicans crush health care reform, the signature legislation of Obama’s presidency. The House slightly changed its demands, now asking for postponing the law’s implementation by one year and scrapping a medical devices tax.The Senate turned it down again, the GOP House changed its demands a second time, and the Senate rejected again. On October 1, the government shut down for sixteen days. The economy suffered billions of dollars in losses, and hundreds of thousands of government employees worked unpaid.
A small group of hardline conservatives were willing to sacrifice the nation’s economic recovery for the sake of killing a law they opposed.
As the New York Times revealed at the time, the shutdown was the result of months of meticulous planning. A small fraction of radical right-wingers within the GOP, the so-called Tea Party movement (named after the 1770s symbolic protests of Bostonians against the British colonial system of ‘ taxation without representation’) and its crusading conservatism had essentially hijacked the US legislative institutions and brought the nation to the brink of economic disaster just to kill a law it did not like.
They were aided by an armada of right-wing interest groups. Heritage Action, a newly founded subsidiary of the hardline conservative Heritage Foundation, ran ads against Republican lawmakers who refused to join the defunding crusade. The Kansas-based Koch brothers, rich and influential industrialists, were very active: one of their political organisations, Americans for Prosperity, spent more than $5 million on anti-ACA TV ads, while another Koch group, Freedom Partners, doled out 200 million dollars to anti-Obamacare organisations.
One of the key parts of the ACA was the expansion of Medicaid for the poor. Before, there was a coverage gap between those who qualified for Medicaid (in some states, the threshold is as low as 50 % of the Federal Poverty Level) and the eligibility for marketplace insurance subsidies (100 to 400% of Federal Poverty Level). The Obama administration ensured that the expansion was implemented by a simple provision: states not willing to close the coverage gap would lose all federal Medicaid funding. But in a 2012 decision, the US Supreme Court struck down the provision, allowing states to opt out of the Medicaid expansion.
Some states’ refusal to expand Medicaid coverage will cost thousands of lives.
A number of states governed by the Republicans did so. The impact of refusing the expansion on public health is terrible. In Texas and Florida, more than a million citizens of each state will not gain access to Medicaid because their legislature has not expanded Medicaid yet. In Georgia, 682,000 citizens are affected. 593,000 people in North Carolina are denied access to Medicaid (data as of July 2015).
A 2014 study estimated that between 7,000 and 17,000 individuals will die as a result of Republicans blocking Medicaid expansion. More and more Republican governors are conceding the importance of expanding Medicaid, yet have to fight radical conservatives in state legislatures who still seem to believe that the end justifies all means; weakening Obamacare is worth cutting off poor people’s access to crucial healthcare.
The American public and the media
Countless polls have evaluated the American public’s opinion on the reform in the past years, and in virtually all of them, a majority of those surveyed opposed the bill, sometimes by margins of fifteen or twenty percent. In an interesting side note, people tend to be more favourable towards the law when pollsters use the official title “Affordable Care Act”, while they are usually more critical when it is called “Obamacare”. This can only be interpreted as a result of the three-year right-wing media crusade against the apparent evil of Obamacare.
After four years of demonisation, Obamacare is still a loaded word. Obama’s signature law has been divisive and controversial. Analysing its impact is not easy. It is part of the reality that the rollout of the ACA was botched (e.g. the notorious technical flaws during the launch of the healthcare.gov marketplace) and some Americans were knocked off their plans.
However, for some 17.6 million Americans who gained health insurance coverage under the law, it’s a phenomenal success. Similarly, the Medicaid expansion – if implemented by the states – will grant millions of Americans better access to healthcare. And this summer, the Supreme Court upheld a key part of the ACA, strengthening the law’s legal standing.
Don’t listen to the haters. There was no good, old pre-Obamacare time: many more Americans were not enrolled in healthcare and the quality of medical treatment depended heavily on income. It’s not all perfect under ACA, but we’ve come a long way.