‘Proof that government of the people and by the people still works for the people’

Posted in Blog by saraburke on March 25, 2010

So said President Obama on Tuesday as he signed into law his new health insurance reforms. He said it was “vindication of the American dream“. The video of the White House signing of the law is a good watch but does Obama really deliver his promise of health care for all, or even health insurance cover for all? What will change in American healthcare as a result of this legislation? The Patient Protection and Affordable Care Act, as it is called does introduce significant change from the status quo. Obama says the law will ‘make healthcare more affordable and health insurers more accountable’. It is not possible to tell at this stage if this will actually happen, But what we do know from the 2500 pages of law that it is, is

  • Nothing is going to happen fast in fact most of it won’t come into effect til 2014;
  • It expands health insurance coverage to 32 million Americans who are currently uninsured because they cannot afford insurance premiums or they are deemed too sick by insurance companies to qualify for coverage;
  • Companies cannot deny you insurance because of an existing condition such as asthma, heart disease and diabetes. And importantly in the short term companies have to introduce coverage for children; within next six months. Up now they could deny it and in future they will be fined if they don’t;
  • By 2014 people will have to have insurance or be fined;
  • An additional 16 million people will become eligible for Medicaid – the government-funded healthcare for those on low incomes (similar but very different to our own medical card scheme).

But this does not mean universal health care for all Americans or even health coverage for ‘every man, woman and child’ as Obama promised in the run up to his election. Under these reforms, 15-17 million Americans will remain uninsured and there is no such things as universal healthcare in America. If you are not insured or covered by Medicaid (poor people) or Medicare (older people) you are entitled to nothing expect emergency care (although this does differ state by state with some states providing much more care than others).

But, he has delivered coverage for 32 million Americans and that is very significant for each of them. There was a young woman I heard on USA public service radio saying she was 20 and has a bi-polar condition, under old law when she turned 21 she could no longer afford her drugs and was no longer covered, under the new laws just introduced she will be covered til she is 26, and that will come into effect within six months – so that is very serious quality of life for that woman and many others like her. Not to be sniffed at.

And we cannot imagine the opposition that Obama is up against, despite his repeated claims and aspiration for a bi-partisan approach, not one Republican voted for the law (a version of the bill the Senate approved last December, by a vote of 219 to 212. All 178 Republicans and 34 Democrats voted against the measure) many Democrats are opposed to it either thinking its not radical enough or its too radical.

The reason Obama set about this reform (and many others before him) was because there are 45 million uninsured Americans but also and fundamentally because rising healthcare costs were which were and are bankrupting many Americans and indeed the American federal budgets through their funding of Medicaid and Medicare.

The original Obama plan proposed that every state would have a federal/public insurance plan that would be cheaper than the private plans which would make it more affordable to people and drive down costs but this has been abandoned in the compromises. So while more people are insured, there is no reason to believe that costs will be contained (in fact the opposite).

And crucially 30 million new people needing insurance will mean 30 million new customers for health insurers. The mantra from Obama’s critics from the right is that his reforms are about the nanny state and government regulation. However, his critics on the left are super critical that this watered down reform is ‘big pharma tested and insurance lobby approved’ ie it has been dictated or at least agreed with big business.

So the deal done was that the insurance companies agreed to take on those with pre existing conditions in return for 30 million more customers, which in turn means more profit  for insurance and drug companies and also private for-profit hospitals. And although, while insurers and employers and individuals can be fined for not covering people, it will be cheaper for them to pay the fines than to extend insurance coverage.

And central to American healthcare is profit. America has the most expensive health system in the world, the least coverage, the most unequal and the worst health outcomes of the developed world. For profit health care is expensive and divisive.

Of course, this is all about politics – Obama went to the people promising healthcare reform. He did not do it in the first 100 days, as he had hoped. Loosing Ted Kennedy’s seat in Massachusetts made it much more difficult to get it through the Senate. He did not get the cross party support he so badly sought. There are mid term Congress elections in November and there is much speculation that the health reforms will work against Obama, although poll results today indicate a swing in favour closer to 50% of the population in support of the new law.

And ultimately this is about ideology, Obama thinks that government is the solution and can regulate the insurance industry and solve the problem, whereas republicans believe big government is bad (or even evil), the market should solve it all.

However, it remains to be seen whether Obama’s government solution to healthcare is scuppered by the profits of big pharma and insurance… Just time will tell….

A few random facts about healthcare in the USA:

  • $1/2 billion of US dollars was spent by healthcare lobbyist lobbying against Obama’s reforms
  • The CEOs of the five largest insurers are paid on average $8 million a year EACH
  • USA spent some $2.2tn (£1.36tn) on healthcare in 2007. That amounts to 16.2% of GDP – nearly twice the average of other countries in the OECD
  • US Census Bureau estimates that 46.3 million people in America, out of a population of 300 million, were uninsured in 2008 – 70% of uninsured are black, Hispanics and Asians

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