You may have been wondering what Charlie has been up to. Well, he was called back to D.C. again at the end of March. Charlie thinks it is a shame that he has been needed in a developed country so much this year while there are so many wars going on around the world where he is also needed. But he also feels that he should help to keep the stabilized countries functioning smoothly for the balance of the world. This time he was called to Washington because of the vote to revoke Obamacare. Charlie, skilled at negotiations, spent long hours advising both Democrat and Republican leaders to postpone the voting to repeal and replace the Affordable Care Act. Charlie wants us all to know that the measure would have been defeated not only because of members of the opposition party, the Democrats, but also because of conservative Republicans who opposed revoking the law. Charlie is happy that while this voting is suspended, at least there is no danger that there will be Americans living without health benefits while a new health care plan is being introduced and refined.
Almost no one argued that the United States needed to reform its health care system. Former President Barack Obama signed the Patient Protection and Affordable Care Act into law in March 2010. Its name was soon shortened to the Affordable Care Act, and then referred to as an acronym, ACA, and finally nicknamed Obamacare. Even President Obama sometimes calls it Obamacare.
No one ever claimed that Obamacare was perfect, but it was the first overhaul in US healthcare since 1965, which was the year Medicare was implanted. Medicare is a federal insurance program that provides health insurance for Americans who are 65 or older and have paid into the tax system through payroll taxes. It also provides health insurance for younger people with disabilities. Medicare doesn’t cover all the health costs for the average citizen; it usually covers only about half the costs. Americans generally cover the other half with their savings or with a separate health insurance policy.
Medicaid was created in the same year that Medicare was. Medicaid is essentially health insurance for poor and disabled people. It is also the only federally funded program for long term care such as nursing homes and other kinds of services for the aged. Many people think Medicare covers these things, but it doesn’t, except for some limited home healthcare and hospice services. Medicaid is a state-federal partnership program. States receive a portion of funding for the program (dependent on the percent of people in the state who are poor) so long as they agree to go along with the basic federal rules for the program. In 1981, federal laws were passed to give states flexibility to develop their own approach to providing Medicaid services, or to provide some additional services, through a vehicle known as a “waiver). All states participate in Medicaid, although not all agreed to the expanded level of Medicaid coverage required by the ACA.
There were other significant health reform laws passed after the passage of Medicare and Medicaid:
HIPAA (Health Insurance Portability and Accountability Act) which created huge privacy requirements for medical information
COBRA, (Consolidated Omnibus Budget Reconciliation Act) which protects people who lose their employer-based health insurance due to a loss of a job, allowing them to keep their coverage for a period of time until they get employed again
CHIP (Children’s Health Insurance Plan) which provided coverage for children who were not poor enough to qualify for Medicaid, but who were not otherwise covered by health insurance
SCHIP (State Children’s Health Insurance Program) which was the same as CHIP
President Obama’s 2010 Affordable Care Act tried to lower healthcare costs by making private insurance more affordable and in that way more evenly distributing health care. It expanded health care for the working poor through government subsidies. In order to pay for these subsidies, employees earning $200,000 a year ($250,000 total for married couples) had to pay higher income and investment taxes. That angered a lot of high-salaried citizens.
An important, but rarely acknowledged feature of the ACA is that insurance reforms were really only a small part of the overall law. The health insurance reforms were in Chapter One of a law that contains ten chapters! Other parts of the law covered expansion of pubic health programs, quality and efficiency of care, prevention, especially of chronic diseases, expansion of the professional health care workforce (doctors, nurse practitioners and others), reimbursement reform for providers, information technology, such as patient electronic records, and reauthorization of the Indian Healthcare Improvement Act. It also provided grant funds for a wide variety of pilot programs to test the effectiveness of various other methods of reform.
But getting back to the part of Obamacare that was to lower health insurance premiums for everyone so that everyone would have health insurance, Charlie was able to break it down for us. The way it is set up, younger and healthier employees or individuals must pay into it but they do not use it much. Many young professionals don’t think that is fair. The lowering of premiums and the expansion of coverage were to be accomplished through three basic approaches:
* Health insurance exchanges (organizations set up to facilitate the purchase of health insurance in each state in accordance with ACA) were created for people working in small businesses (fewer than 50 employees) and for individuals, such as the self-employed. People who purchased health insurance through an exchange were eligible for subsidies based on their income level; exchanges were supposed to make it easier to compare costs and coverage of insurance plans;
* Huge expansion of Medicaid to cover poor people up to 138% of the federal poverty level;
* Large employers would be required to offer health insurance coverage to their employees.
The mandate is important because if the ACA achieved coverage for everyone, eventually premium costs would go down, and because healthy people as well as sick people would all be included in insurance coverage, so the risk of covering people would be evenly spread out. A very popular aspect of the law is that insurance companies could no longer deny coverage to anyone based on how sick they were, or due to pre-existing conditions. Insurance companies insisted on this mandate, prior to passage of the law, in order to mitigate the effect of this provision. Without the mandate, people might have simply waited until they were sick to obtain coverage, which would have resulted in astronomical premium costs.
The ACA demanded that businesses that employed 50 or more full-time employees provide health insurance for at least 95% of those employees and their dependents up to the age of 26, or to pay a penalty. That did not please a lot of employers. Many businesses have found that it is more cost-effective to pay the penalty.
Large employers complained about the provision to provide coverage to all employees, and some started cutting hours of employees so that they would not have to pay their insurance coverage. Other employers decided to no longer provide health insurance for employee’s spouses or began to implement charges for adult dependents that had access to coverage through another job. Still other employers began to shift the cost of insurance to employees by requiring them to pay a higher percentage of the premium, not covering family members, and offering policies with very high deductibles (which are cheaper in the short run, but which may not provide comprehensive enough coverage in the long run). And there were also those employers that discovered loopholes in the ACA that allowed them to offer minimum coverage for services such as surgery and x-rays, or annual limits on care. Health insurance was no longer seen as a perk given to attract and keep employees in a company. People who purchased coverage on exchanges found themselves making similar choices, because they purchased the policies when they were healthy, and then were not adequately covered when they faced serious illnesses.
However, before Obamacare, there was a large percent of the employed population that were in what is called a “job lock” – that means people who were afraid to leave their jobs and as a consequence lose their affordable insurance policies. That was especially true in the case of people with pre-existing conditions. Under Obamacare, almost all workers now have health insurance because it is illegal for insurance companies to exclude anyone because of pre-existing conditions or drop anyone because they get sick.
The ACA requires a minimum level of healthcare coverage. Insurance companies cannot decide, for example, that mental health services are “extra” because of the way the law is framed, requiring basic coverage. Before Obamacare, women who bought health insurance in private companies were generally “gender rated”, which means they had to pay more, because insurance companies were convinced that it was more costly to cover women. Under Obamacare, this became illegal. The ACA also provides mental health counseling, substance abuse counseling, pre-natal and newborn care, pediatric care, and women’s health screenings for cancer or other ailments, plus prescription drugs. It allows parents to keep their children, up to age 26, on their health plans. It provides services or devices that help people with injuries, disabilities or chronic conditions.
Charlie did not tell me everything. The above is only an outline of the complex Affordable Care Act. The ACA, though not a stated goal of the law, certainly did provide a solid foundation for a national health insurance plan or government provided health care coverage for all. Charlie does not think that Obamacare is a failure as the present administration claims. He thinks it is an improvement, a big improvement, although it is also a work in progress. But he did point out that as a result of the failure of the Republican repeal and replace effort, it has become more widely understood that Americans now believe that health care is a “right” and not a “privilege”. Charlie predicted that this will make a full repeal and replace extraordinarily difficult. He understands that it is controversial, and reminded me that the human species, much like the feline species, does not like change. And also that human beings in general are especially resistant to forced changes that require them to leave their comfort zones, just like cats.
The word cliffhanger comes from cliffs. Duh. Cliffs are vertical, or nearly vertical, rocks that have been formed by erosion and weathering. There are lots of famous cliffs, but the first ones that come to my mind are the White Cliffs of Dover, probably because there was a popular World War II song about them that was part of my childhood, and also because they are on the historical English coastline.
When one thinks of cliffhangers, England and its gothic novels always come to mind. Cliffhangers are the kind of story, book or movie that uses suspense either at the end of an episode or a scene. A good example was the way the final episode of Game of Thrones, season 5, was done. Jon Snow was dead. Or was he? Those of us who sweated it out until season 6 was aired were never really sure. The writers used old-fashioned melodrama, suspense and uncertainty, and the audience was left as if hanging from a cliff in a state of tension and apprehension. And that’s a true cliffhanger.
This part of the blog will not be able to offer any nail-biting cliffhangers, but it will have classes in series, and I hope they will be interesting enough that you will want to come back and read what happens next, even if you don’t lose sleep anticipating the next chapter. Enjoy.