As everyone as probably heard by now, yesterday the Supreme Court ruled that the Federal Government can continue to provide subsidies to the 6.4 million Americans enrolled in Federal insurance exchanges under the Affordable Care Act. This ruling allows the program to continue to be viable in the 34 states which decided not to set up their own state insurance exchanges. An unfavorable ruling would have gutted the program. Had the Supreme Court ruled otherwise, the Republican run Congress would have had to amend the law to clarify the wording or the states without exchanges, many of which are run by Republican Governors and Republican controlled legislatures, would have had to set up state insurance exchanges. Since both of those possible remedies are highly unlikely, millions of Americans who cannot afford insurance coverage without the subsidies would again be uninsured.
However, I don’t use the Obamacare Federal insurance exchanges; my wife and I are insured though her employer. So is this victory for my wife and I? Now all of us who care about our fellow human beings should be thankful for the ruling, but is it really in our own selfish self interest? At first glance it would seem that the Supreme Court ruling would not be good for us financially. After, wouldn’t I theoretically have to pay less in taxes if the Federal government were not offering subsidies to millions of people so they can afford health insurance? Doesn’t this ruling mean that those who pay full price for their insurance on the open market will also be expected to help pay for the subsidies with higher taxes or won’t the national debt will surely increase?
The first answer to those questions is that this ruling is going to save the government money and at the same time result in better healthcare many millions of Americans. Sounds counter intuitive on the surface, but the validity of that statement is backed up by careful studies by the Congressional Budget Office. In fact, a brand new study by the CBO came out Friday a week ago. It was ordered by Republicans in Congress who were concerned that earlier studies by the non partisan group did not take into account all economic consequences of the law. The new study never the less shows that repealing the Affordable Healthcare Act would add $137 billion to the federal budget over the next decade while the number of uninsured Americans would rise by 20 million.
That’s right, it will actually cost our government money to do away with Obamacare while many millions of Americans would be thrown back into healthcare purgatory. To make up for this deficient Congress would either have to raise taxes or agree to allow the national debt to expand more than currently predicted. That is the very definition of counter productivity, but how are you and I going be affected financially?
Aside from being saved from the possibility of having to pay higher taxes so that millions can receive poorer health care, you and I benefit financially in yet another manner. Healthcare costs and our insurance premiums have and will continue to rise more slowly because of Obamacare. After decades in which the cost of healthcare grew at rates much faster than the growth of our economy, the growth of health care spending has recently slowed dramatically. In 2013, which is the last year for which we currently have complete data, healthcare costs grew at a rate of only 3.6%. Now granted, some of that slower growth was probably caused by the recession, but poorer economic conditions cannot account for a sizable portion of that slowdown. It has also been projected that Obamacare lowered health care cost by nearly $36 billion in 2014.
There are many reasons why Obamacare is causing the increasing costs of health care to slow to manageable proportions. Some costs are being decreased by provisions of the law which help to curb waste, fraud and abuse. Other Obamacare policies encourage healthcare providers to be more efficient and effective which also cuts costs. For instance one provision of the act which has been very successful encourages hospitals to cut their rate of patient re-admissions by providing more effective healthcare the first time a patient is admitted for a particular condition. Yet another provides incentives to hospitals to prevent the spread of hospital borne diseases. Many other Obamacare provisions also encourage healthcare effectiveness and reduce costs.
In addition, people without insurance tend to wait to obtain health care only when condition become severe and thus much more expensive to treat. With affordable health insurance these people are more willing and able to get medical treatment earlier providing significant cost savings. In addition, the preventive health care provisions of the law are designed to provide similar savings.
When uninsured people who cannot afford to visit a to a doctor’s office need care for non emergency situations, they never the less head for the nearest hospital emergency room. They know that laws in every state prevent emergency rooms from turning them away while doctors offices can and will refuse to treat them. The problem is that it costs several time more to treat a patient in an emergency room than it does in a doctor’s office. Now people covered by Obamacare can get care for non emergency situations in a doctor’s office saving the healthcare system millions of dollars.
When the seriously ill or injured uninsured or under insured patients are treated in a hospital and ultimately cannot pay their bills, the hospitals must absorb those costs as well. Nationwide, the total amount of uncompensated care provided to the uninsured reached as high a $56 billion a year before the Affordable Healthcare act started enrolling additional Americans for insurance.
Hospitals could not afford to absorb all of those additional expenses and continue to be financially viable so they passed those costs on by raising the rates of everyone who could pay, those of us who have insurance, causing continual large increases in our insurance rates. Even those who obtained their health insurance through their employers were affected because employers were increasingly passing on those rate increases on to their employers. Since approximately 20 million additional Americans are now insured via Obamacare, the cost of uncompensated care in American hospitals has dropped significantly meaning the hospitals have to increase their rates less than usual.
Therefore, in any number of ways Obamacare is working to reduce the cost of health care and our health insurance premiums keeping more money in our pockets. It is also saving our government money. Since ultimately we are collectively responsible for the money the government spends, we save money there as well.
The bottom line is that the Affordable Health Care may not be perfect, but it is working reasonably well. It is curbing the rising cost of healthcare, making our healthcare system more efficient, and saving you and I and our government money. And that’s not counting other benefits like the elimination of preexisting condition exceptions, allowing young adults stay on their parent’s policies until they are 26, etc. More importantly it is presently providing affordable health care insurance coverage to over 20 million Americans who were previously uninsured.
It makes you wonder why Republicans have made over 50 attempts to repeal Obamacare and launched dozens of court cases to try to shoot it down. You would think that they could find more productive uses for their time and energy.