The Affordable Care Act: overview and impact

ACA

There have been many problems with the Affordable Care Act since its inception. When it was a bill, it was contested, and the final form of the law reflected a lot of compromises that weakened it. Then there was the rollout fiasco in the autumn of 2013, with site crashes preventing people from signing up (Cohen, 2013). While people are now able to sign up, a lot of people who are supposed to be enrolling are not, yet another twist in the saga (Le Masurier, 2014). Beyond all of this, there is still the question of the impact that the bill will have on the medical system -- adding millions of new patients without increasing capacity is a recipe for disaster by any standard of operations management. Some people are paying more money for less coverage, and the tighter coverage for seniors under Medicare, under the guise of cost-cutting, displeases many who cannot afford to supplement Medicare at their age. So when we are talking about the Affordable Care Act, we are not talking about just one problem, but a litany of problems, all of which threaten to undermine the original intent of the act, which was a twin objective of providing more health care to Americans and lowering the cost of health care provision.

It is almost a challenge to distill this down to a single problem. The Affordable Care Act had flaws built into it from the outset, partly because of the core concept and partly because of the compromises that were built into the law. The question now is whether or not the benefits of the Affordable Care Act outweigh the costs. It's a tricky question to answer because the law was always flawed, and because we do not yet know all of the costs associated with the law. There are benefits, but since they come at a high cost, the question has to be asked if we should overhaul the law or not, given that we now have a much better sense of what it is, and what it isn't. We know that the negative aspects affect many seniors and those within the health care industry, some businesses and some young people. We also know that the benefits are accrued by the previously uninsured and the government.

I believe that the time has come to overhaul some of the failures of Obamacare, repairing the damage done and building a better health care coverage system going forward. While there are many problems I will focus on one, the individual mandate. For the next few minutes, I will explain how this can be achieved.

Individual Mandate

One of the most contentious parts of the Affordable Care Act is the so-called individual mandate. Narrowly surviving a Supreme Court challenge, this element of the law requires people to purchase some form of health insurance, if they do need receive this from their employer. The individual mandate, however, comes with minimum coverage standards that for many people are a) more than what they need and b) more expensive than they can afford and would have otherwise purchased (Kasperkevic, 2014). As many young people are avoiding enrollment because they cannot truly afford it, nor justify the economics of it, there is the risk that the program will be unsustainable going forward -- or premiums for those who have coverage will increase sharply. There are several solutions available to remedy this problem.

The first solution is to work within the existing framework of the law, by extending the tax relief and other credits that help the underprivileged to pay for Obamacare. This solution solves the problem of poor registration, but it causes two other problems instead - subsidizing people who aren't actually underprivileged, and costing the taxpayers more money.

A second potential solution is to beef up enforcement. This will cost more money, and essentially uses public funds to bump up the revenues of private enterprise (insurance companies). This is not a great use of public money and effort, unless a simple enforcement mechanism (through the IRS, for example) can be devised. In lieu of a proven, effective mechanism, however, this option holds little appeal. Besides, the problem isn't that not enough people are signing up, it is that we should not be forced to sign up, and the apathy among young people is particularly telling, since they were the ones who voted for this President.

A third option for this is to scrap the individual mandate altogether. This changes the economics of Obamacare for insurance companies, but this part of the law was always contentious because it forces people to spend money on something, and then sets minimums for how much they have to spend, both of which are detrimental to the concept of personal freedom in this country. Scrapping the law is certainly an enticing option, but in the short-run it will not happen, because the President has a veto and would strike down any attempt to make such a dramatic change to his signature law. That said, getting rid of the mandate would only result in a 2.4% increase in premiums, not exactly a big deal or something politically unpalatable (Ebner, 2012).

A fourth option might be the most viable. People should place pressure on their lawmakers to rework the individual mandate. If we are going to be stuck with this -- and realistically we are -- then we at least need to make it so it is not damaging to people. Allowing people to have weaker plans if they want to spend their money elsewhere is part of that. States can limit their participation in enforcement of mandatory enrollment as well, where possible. There should also be a massive campaign to bring about change, because with enough public pressure officials will realize that they are not electable unless they support the removal on this contentious component of the law. Insurance companies suffer the consequences, but government never should have been in the business of mandating them profits in the first place -- let the free market decide who offers what plan to whom, not the government. Where there is enough pressure, it has been proven to work, as was the case with the recent major exemption to the individual mandate, the latest of 13 different exemptions (Angle, 2014).