Obamacare: Myths and Facts, Part I

health-care-debateSome say that the Patient Protection and Affordable Health Care Act ( aka Obamacare) will provide the final nail in an already sluggish national economy, cost millions of jobs and further entrench every American into greater government dependence.

Others say the new law is a landmark piece of legislation that will literally save thousands of lives by making health care more affordable and accessible to all Americans.

Which argument is correct?

Given the hyper-inflated and strictly partisan rhetoric, it’s hard to know the answer and history will be left to judge the law’s merits and flaws.

In the meantime, I will attempt to examine the new law from both sides of the debate and offer some of the research I have conducted about the law. This week’s installment:

Comparison to Medicare: Myths and Facts

Supporters of the ACA enjoy pointing to the federal Medicare program as a primary defense of the new health care law.

This, in my opinion, is a dangerous proposition for several reasons.

1.) Medicare applies almost equally to all Americans, unlike the ACA, which primarily targets those Americans who do not have (by choice or income restraint) access to health insurance in the private marketplace. In fairness to the ACA, however, it’s important to note that the new law does offer universal protection to all Americans from rather abhorrent practices that were all too common in the health insurance industry, especially rescission clauses, coverage limitations and denial for pre-existing conditions.

The insurance industry argues those practices were necessary to stabilize costs, yet it remains difficult to assess how those savings were passed onto consumers. Thus, one of the more popular components of the new law requires insurance companies to direct a minimum 80 percent of premium revenue toward actual health care costs.

2.) Unlike the ACA, Medicare is not a mandate and you are not fined or otherwise penalized for choosing not to participate as a consumer in Medicare. Both programs, however, are supported by federal tax dollars. Supporters of the ACA argue that mandated participation is the only way to ensure an affordable marketplace. They also say that mandating purchase of health care coverage is no different from a state government mandating required liability insurance coverage on registered motor vehicles.

Comparing mandated auto liability insurance and requirements to purchase health insurance from the private sector is a seriously flawed rationalization that does not hold up under its own weight.

This is a matter of definition and it is outlined in law (both federal and state).

In the state of Maine, you are required by law to have liability auto insurance to drive a vehicle, as pointed out by Senator Angus King during his defense of the ACA on the senate floor earlier this week.

Senator King, formerly the governor of Maine, should know that both the Maine Department of Motor Vehicles and the Maine Legislature define driving as a privilege, not a right.

Maine’s law requiring auto liability insurance makes a lot of sense. It acknowledges and reinforces our shared responsibility to be accountable if we cause damage while driving, but it does not interfere with our rights to make choices, to exist as free people. We have the choice not to drive, whether we like to admit or not. Each of us has the option of walking, biking or using public or private transportation to get to and from wherever we want to go.

The ACA, however, requires, under penalty of law, every American to have basic health insurance. There is no choice. Either you have health insurance or the government is going to levy a fine upon you. Period.

Enter Chief Justice John Robert of the U.S. Supreme Court, a Bush-appointee who is considered a conservative. During a challenge to the ACA, Roberts tipped the scales of justice by opining that the ACA is a tax, and thus; the new law does not violate the Constitution because the power to levy taxes rests with the Congress and can be applied to all citizens.

ACA supporters, including President Obama cheered Roberts’ decision and validation of the new law. Strangely, those cheering previously argued that the new law is not a tax. But none of us should be surprised by the process of politics.

While participation in Medicare is voluntary, it should be noted that this federally subsidized form of health care is universally popular among both Republicans and Democrats.

3.) On a final note, Medicare was a bipartisan piece of legislation. The ACA was not. In fact, the ACA was passed via a straight party line vote only a few months before the Democrat Party was about to lose its majority in the U.S. House of Representatives. In the Senate, all eyes turned to the razor-thin party lines and the election of Republican Scott Brown of Massachusetts  who would stunt a filibuster-proof majority.

On Christmas Eve in 2009, the Senate voted 60-39 in favor of the ACA. (Not a single Republican voted in favor, including Sen. Olympia Snowe of Maine, who voted to approve a senate version in the Senate Finance Committee on the condition of subsequent changes she was promised in the final bill.)

The Senate version of the bill was approved in the U.S. House by a 219-212 vote on March 21, 2010 (Again, not one Republican voted in favor and they were joined by 34 Democrats in opposition. President Obama signed the bill on March 25, 2010.

Comparatively, there was a lot less drama regarding passage of Medicare in 1965. Of course, this happened before the internet.

In fact, Medicare was the result of much more compromise and its passage showed bi-partisan support.

In the Senate, 57 Democrats and 13 Republicans voted for passage of Medicare; seven Democrats and 17 Republicans voted against it.

In the House, 237 Democrats were joined by 70 Republicans in support of Medicare; 48 Democrats joined 68 Republicans in voting against it. The law was signed by President Lyndon Johnson on July 30, 1965.

Those who would say modern-day partisanship is to blame for the party line vote on the ACA, should be reminded that Democrats and Republicans have been able to hash out bipartisan compromises regarding updates and amendments to Medicare as recently as this year. Of course, this dynamic gives credence to Rep. Nancy Pelosi’s statement that the ACA can be “tweaked” as it moves forward.

Next: The financial implications and benefits.

Money for nothing

August 2009: Large crowds in Portsmouth, NH, protest outside a high school where President Obama speaks about the need for health care reform.

Anyone with a pulse and an IQ exceeding room temperature can likely agree that our nation’s health care system is seriously flawed.

But that’s generally where the agreement stops.

That’s why I was impressed when Biddeford Mayor Alan Casavant posed a series of observations about Maine’s own raging health care debate on his Facebook page.

Casavant is also a member of the Maine House of Representatives, and his comments were based on his observations during a legislative hearing about how best to address rising health care costs.

“Clearly, resentment [of] the Obama plan drives a lot of these bills,” Casavant noted, referring to the federal Patient Protection and Affordable Care Act of 2009.

“For some, the costs of treatment and medicine exceed their ability to pay,” he said. “So the moral question is: What should a society do in such situations? What should government do? Do we act, or do we allow the laws of Darwin to supersede our compassion, integrity and our humanity? The system is broken. . .”

I applaud Casavant for raising the topic, but submit that our health care system is NOT broken, it is fixed . . . meaning it is rigged.

Our current system is either outdated and ineffective, at best ; or it is favorably geared toward an ever shrinking pool of those who can afford to keep up with skyrocketing costs.

Are you with me, so far? Good; because this is where the debate gets tricky.

Before we proceed any further, we must agree to at least one basic fact, regardless of our individual political/cultural/socio-economic viewpoints.

Health “care” and health “insurance” are completely different topics that are too often linked at the hip.

Let’s start with health insurance.

If you drive a vehicle in Maine, you are required by law to have a minimum-liability insurance policy. This law exists to protect drivers who are harmed by another driver’s neglect or carelessness.

Driving, as the state of Maine tells all new drivers, is a privilege, not a right.

I will take that a step further and say that health “insurance” is also not a right.

Laura and I scored tickets to see President Obama speak about the need for health care reform in 2009. Then, just as it is now, we both had reservations about the president's plan. Laura tried to ask a question, but she and many others did not get picked.

The argument about whether health care is a right remains a bit more ambiguous, but let’s remember we’re now discussing health “insurance,” not health “care.”

The discussion about rights and expectations have only been muddied by the nation’s new health care law, which mandates individuals to purchase health insurance in the private marketplace.

The so-called “individual mandate” is one of the more controversial aspects of the health care reform law signed by President Obama. That issue is scheduled to be deliberated by the U.S. Supreme Court this year.

Interestingly, critics of the individual mandate can be found from both the left and right side of the political spectrum.

Conservatives argue that the individual mandate further erodes personal liberty and crosses the sacrosanct line between personal choice and government mandates.

On the other hand, more progressive Democrats — especially those who pined for a public option or a single-payer system of healthcare reform — describe the individual mandate as nothing more than a very big gift for evil insurance companies that stand to gain millions of new customers.

But all that debate and Constitutional introspection pales in comparison to the more fiery rhetoric associated with the subject of health insurance profits.

Left-leaning groups, such as ACORN and HCAN (Health Care for America Now) say that corporate, for-profit health insurance profits are skyrocketing and have quadrupled over the past few years.

It’s a favorite talking point of progressive Democrats and very handy when whipping up grassroots mobilization to support the president, but it’s not entirely accurate — although rated as “mostly true” by PolitiFact, a Pulitzer Prize-winning organization established by the Tampa Bay Times to fact check political rhetoric.

Meanwhile, the health insurance industry is crying poverty, saying their profit margins are among the lowest of any industry in the United States — ranging between two and four percent.

So, which one is right?

Unfortunately, the inconvenient truth is that both groups are a little bit right, and a lot wrong.

And that is bad news for those of us trying to navigate the turbulent waters of this complex debate.

But simply blaming “greedy” insurance companies conveniently ignores too many other factors that drive health care costs. Moreover, such rhetoric is debatable, at best; and intentionally misleading at worst,

Rick Newman, chief business correspondent for US News & World Report, makes a compelling  case about why health insurance companies make lousy villains, pointing out that profits are hardly the root of a much larger and complex problem.

“Overall, the profit margin for health insurance companies was a modest 3.4 percent over the past year, according to data provided by Morningstar. That ranks 87th out of 215 industries and slightly above the median of 2.2 percent,”  Newman reports.

Despite my right-leaning, free-market beliefs, I admit to being somewhat conflicted on this issue, and that’s probably because my household is knee-deep in our own health-insurance nightmare.

Laura does a good job of managing her illness, but there is no escaping that MS is a progressive illness that will never go away and only get worse over time.

My wife, Laura, was diagnosed with multiple sclerosis just three days after Christmas in 2008. Her disease is never going to go away. It is never going into remission. It takes a little piece of her each day, even when we don’t notice it.

I also have a chronic disease, one that gets a lot less sympathy than MS, cancer, epilepsy or diabetes. For more than 25 years, I bounced in and out of psychiatric hospitals all across the country, ringing up thousands of dollars in debt because I had no health insurance.

Neither of us asked for our respective illness. We both work full-time. We pay our taxes, but we are also a health insurance company’s worst nightmare…we take out a lot more than we put in to the system.

If you’re a conservative, Tea-Party Republican, you are advised now to reach for the duct tape because otherwise your head may explode when I offer up this next tidbit:

You are paying a portion of our health insurance.

Laura is a state employee and thus, we are more than lucky to have an outstanding health insurance plan that is offered to all state employees and their immediate family members.

But even if Laura lost her job, and we relied upon a more traditional (and much more expensive) private health insurance plan, you would still be paying for our health insurance.

Why? Because in our current system, healthy Americans subsidize the costs of treatment for the ill. That is the fundamental core of the individual mandate: we need more young, healthy people in the system to offset the cost of treating older and sicker Americans.

I am not a big fan of the individual mandate – beyond the Constitutional arguments, I think the system unfairly penalizes healthy people and will do little to drive down the costs of health care.

There is a lot more to cover, but I will end this installment here and borrow Casavant’s closing observation from his Facebook post: Stalemate [on this issue] is unacceptable.

Next installment: Health Care: Is it a right?