Tag Archives: Obamacare

The Inequal State of Healthcare in America

When the Affordable Care Act (ACA) was passed, it’s major objective was to get every American insured. “Obamacare” was aimed at creating health care equality for all by offering a variety of insurance policies – one that could be affordable for each and every American. In her speech this morning on the Martin Luther King Jr. holiday, Secretary of Health and Health Services Kathleen Sebelius stated , “Of all the forms of inequality, injustice in health care is the most shocking and inhumane.” (Neff, 2014) Sebelius again was adamant on her support on the ACA; yet, even ignoring the ACA’s turbulent introductory phase, it still appears as if the policy may bring more harm than good.

A Wall Street Journal article today indicated that early reports show that the people signing up for new policies were the ones already covered before the ACA. A recent survey by McKinsey & Co. estimated that only 11% of new policies were being purchased by someone previously uninsured. (Weaver & Mathews, 2014) It is still very early in the sign-up process, but the low number is a serious red flag when considering the chances at achieving healthcare equality in the U.S. First, are Americans in poverty (Medicaid eligibility is set at 138% of the poverty line) getting information and the opportunity to sign-up for health insurance plans? Most signs point towards no. One comedic example is a recent Jimmy Kimmel segment. He went to the streets to expose many Americans who were in favor of the Affordable Care Act yet were opposed to “Obamacare.” (Obamacare is a common nickname for the ACA). But Americans aren’t all to blame for their confusion over the policy. Much can be pointed at the lack of transparency for the ACA, as the “condensed” version of the law is over 1,000 pages long and incomprehensible for the average American. As the details of law do become uncovered, it is becoming clear that providing health care equality to all Americans is not going to come without serious costs.

America’s middle class, initially expecting to benefit from “Obamacare,” have been hit the hardest. They are having to fund insurance subsidies for the poor through higher premiums and larger deductibles; paying for the “free lunch” of others while often struggling to pay their themselves.

“What is a surprise to some people are the higher insurance premiums that ordinary, middle class Americans suddenly face so that other ordinary Americans can enjoy lower prices.” (Dorfman, 2013)

Today, America is still facing the problem of health care inequality. For now, the uninsured for whom the ACA policy was meant for have yet to sign up, while the average American is seeing his health care premium increase while deductibles go up and coverage gets worse. I certainly hope the best is yet to come.

Featured articles:

Dorfman, Jeffrey, “The High Costs of Obamacare Hit Home for the Middle Class,” Forbes. October 31, 2013. Link

Neff, Blake, “Sebelius makes MLK-themed ACA pitch,” The Hill. January 20, 2014. Link

Weaver, Christopher, and Anna Wilde Mathews, “Exchanges see Little Progress on Uninsured,” The Wall Street Journal. January 20, 2014. Link

Latest Issues with Healthcare Laws

I know this is a controversial topic; I am not writing to step on any toes, just some observations as of late.

When the Affordable care act was introduced it was heralded by many as their own saving grace and was portrayed by our the presidential party as something that could define Mr. Obama’s entire presidency and political career as a whole. Obviously these ideas and the law itself are heavily refuted or favored depending on who one talks with, but one thing is for certain: there have been numerous issues with the implementation of both the website that houses the “exchange” as well as with the program itself.

One of the most economically interesting claims from president about the health care law, has been that the price of healthcare would actually go down due to the competition between insurance providers as well as their newfound inability to discriminate based on certain preexisting conditions. A recent Forbes article compiles some of the quotes from President Obama from the last couple of years talking about the program including two quotes that talk about the benefits that preventative care will have on overall healthcare costs as well as talking about needing people of all different ages to participate in the health care exchange in order to balance out the costs for everyone. (Link) The problem with this initial claim having to do with preventative care is that recent data from the same article from a study in Oregon seem to prove differently. The study, looked at expanding Medicaid coverage given to low income families, did not actually reduce their visits to the emergency room as the president promised, but instead increased them upwards of 40%. What about the talk of everyone participating in order to keep costs down? Well, a WSJ article looking at the demographics of the recent enrollees does little for the hope of cheaper insurance. According to the article, more than half of those people signing up for the healthcare plan are at least 45 years old. (WSJ Link) These demographics differ from state to state and admittedly will change at least a little as the signup times come to a close in March, but this is a disturbing sign. With so many different promises from our leader about what to expect from this law being put into place, including not having to give up one’s old plan, the public has a concrete picture of what to expect– thus far it is not up to par.

It is slightly ironic I think, that now we have fostered a situation in which the healthcare companies–who’s prices we were supposed to be reigning in– have seen their insurable pools expand due to the nature of the law and now will get to raise rates due to the ages etc of the people enrolling due to the law. I do think that everyone should have access to healthcare, but we the American people have accepted so many “promises” that at this point, do not seem to be coming through in the end product and there truly is no such thing as a free lunch.

Health care spending and Econ 401

I believe it is safe for me to say that most of people in our class have heard about the terms like ObamaCare or Affordable Care Act without me presenting tangible evidences. This is because those terms are written in everywhere. You can hear about them in the news, radio, and classes. Why is this so prevailing? I wonder. Can this be because I pay $110 per month for my health insurance and I never go to hospital?

As an international student in the University of Michigan, I am obligated to buy a health insurance which I think it is forced upon me. In addition, it is also very difficult for me to change my current health insurance and substitute with a cheaper insurance, which by the way, I really tried and wanted. This is because the university has set very high standards relates to the health policies for the international students.  Perhaps little bit too much.

Like what the university thinks about the importance of having a good health insurance, everyone living in the United States of America is bounded by health care policies. This can mean that health-care policy can play influential roles in our life and it has been since the first health insurance came out. You can find an interesting story by clicking the link, and it is very accidental.

Briefly I have pointed out that health care policies and insurances are very important in our lives, yet how many of us understand the effects of change in health care policies in the economy? According to the recent Wall Street Journal article, Health-Care Spending Grew at Modest Pace in 2012, it states that

“Health spending is rising at a slower pace than a decade ago and making up a slightly smaller portion of the U.S. economy”

It is very vague, even with carefully reading the fact that U.S health-care spending in 2012 was $2.8 trillion dollar and this is 3.7% increase than the previous year. What is this mean in terms of microeconomic scales? We learned in ECON 401? I do not know. Can spending less and seeing a slower pace of increasing in health-care spending it be a huge problem for the U.S economy? I do not know. As I mentioned in my previous blog inside ECON411 class blog, What is behind Mr.Draghi’s mind? How do I know?, I wish news is easier and self-explanatory so laypeople can understand better.This time, however, I decide to give a response to the one of economists’ comment presented in the article and ask the readers about my responses.

A Harvard University health economist and former adviser to the Obama administration said,

“This and more recent data are pretty profound. What is says is that even as the economy is rebounding, health spending is not. It looks less and less like a hangover from a recession and more like a change in the nature of the health-care system.”

I believe his words means is perhaps that the decreasing trend in the national health expenditures as a share of U.S GDP since the 2008, economy recession, is not due to the recessions but the changing nature of our health care system, right? So I did a quick reading about the new changes in health care policies and law. According to the White House’s webpage on Medicare, President Obama has signed the Affordable Care Act into law in March, 2010. One of the new benefits from the Affordable Care Act is aimed to have an affordable coverage for more people.

For example, new policy favors small business by providing them tax credits because they have been paid more premiums than larger employers which I think is the main reason that has reduced the share of health care spending in the U.S. GDP. Do you think this can be applied to one of the reasons that a Harvard professor had in his mind?

Obamacare and Part-time Employment

Many people opposing Obamacare claimed that forcing employers to offer health benefits to full time employees would force some employers to decrease the amount of full time workers and increase part-time employees, to whom they would not be required to pay the health benefits.

This claim seems reasonable at the surface – cutting back on the amount of health care benefits paid out would keep over all costs down and add to employers bottom line. However this is a very one dimensional view and leaves out some other factors that weren’t taken into account. For example, increasing amount of part-time employees would also likely increase then cost to train  the extra employees.

I did some further research of the affects of Obamacare to try and see its immediate effects on part-time employees. A poll that the Wallstreet Journal released in October of 2013 showed no broad shift of employers switching from full time to part time employers (http://blogs.wsj.com/economics/2013/10/31/still-no-evidence-obamacare-is-forcing-large-numbers-into-part-time-work/). In fact the pole showed about a 2% drop in part time employees from January of 2012. The article also noted two set backs in the data: 1. numbers were rounded to nearest whole numbers and employers could have been cutting back shifts to just under 30 hours and then rounding up and 2. The mandate doesn’t go into effect until 2015 and employers could be holding off on shifting, or gradually phasing in more part time employees.

Another article I found was focused on minimum wage and the low amount of hours worked per week (http://money.cnn.com/2014/01/13/news/economy/minimum-wage-hours/index.html?iid=SF_E_Lead). The article cites an employee of KFC who claims that she is never scheduled to work more than  15-25 hours a week and it is an effort to keep her as a part time employee. Although it was denied by KFC, it is speculated that they do this to avoid benefit payments and pay employees lower wages.

This first article doesn’t show any definitive relationship between Obamacare and part-time employees, however the second article seems to support the thought that it is limiting the amount of employees being hired full time.  At the very least it can spark the discussion of government regulation on industry and its effects on the labor market. Benefits initially were offered high wage high skill sectors, however are now been legislated into all full-time positions. The idea is good in its roots, expanding healthcare to all people regardless of skill or wage level. But it now seems possible that government expanding benefits could lower the annual income of employees who are downgraded to part-time employees.

Another effect of Obamacare on employment could be effects on the minimum wage. There has already been a large discussion on raising the minimum wage because it is hard for single parents making minimum wage to live above the poverty line. Limiting the amount of time low skilled workers spend on the job will negatively effect their annual income. This could create even more poverty or lead to reform and calls for an even higher minimum wage. Regardless of the possibilities, it will be interesting to see the effects of the mandated Obamacare and its impact on minimum wage and amount of hours worked to per week.