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By Jenny Underwood
Obamacare is the biggest law to benefit middle and lower income citizens since Medicare and Medicaid were passed. Obamacare will enable 30 million people to purchase insurance coverage where it is unavailable by cost or by pre-existing conditions. The insurance companies who are the middle-men in every transaction between citizens and medical care providers will be reined in and have to offer fairer plans. Their incentive is not just this law, but the vast migration of the 70+ million baby boomers from private insurance to Medicare which will diminish their members.
Obamacare will be a huge creator of jobs, good jobs in the healthcare field. Adding 30,000,000 people to healthcare will create millions of jobs from aides to nurses to doctors and pharmacists.

Republicans want to kill Obamacare
So why are Republicans fighting so hard against Obamacare. Many want to kill Obamacare. Many people hate and want to defeat Obama as President and think that Obamacare is evil and will increase the national debt, kill Medicare, cause doctors to leave medicine, have death panels that kill old people, and on and on.
There are no alternatives offered by the Republicans, only blasting the bill that has been passed. Lots of people believe in some parts of Obamacare but listen to the rhetoric that the whole act needs to be defeated. Socialized medicine is thrown around as being a bad thing. Just look at Canada and the United Kingdom and all those other countries who, by the way, have higher rates of treating and curing diseases and do it at lower costs. Our system is skewed towards serving the rich, employed, elderly, and poor. The rest get their care via a trip to the Emergency Room.
Old timers remember the same fight with Roosevelt on Social Security, Johnson on Medicare, Medicaid and the minimum wage law. These are the fundamental programs that benefit the middle and lower class. Obamacare extends the right to purchase insurance to those that can’t buy it, and therefore get medical care.
Many were disappointed when there was not a public option in the bill which would have caused competition and allow citizens to buy into a system like Medicare. Studies have shown that a large majority of people would buy into Medicare if they could.

The Death Panels do not exist
The only death panels are those that are deaths due to lack of insurance. Harvard University estimates 45,000 people die each of treatable illnesses not treated due to lack of insurance. They found that people without insurance have a 40% great chance of dying.
The death panel rumor has been shown to be a complete lie.

Obamacare will reduce Medicare benefits by $500 billion – NOT!
In fact, Medicare recipients have already received more benefits such as free annual mammograms, colonoscopies, and physicals. Tens of millions of people now getting preventive care at no extra cost, including cancer screenings and vaccinations. Last year, 32.5 million Americans on Medicare and up to 54 million Americans with private insurance received one or more free preventive services.
The Medication plan has been improved to fill the donut hole of coverage on a phased in basis. 3.6 million Medicare beneficiaries saved on average of $600 each as part of the phasing out of the donut hole.
Obamacare made the Medicare Advantage (private plans enacted by President Bush to compete with Medicare) cost the same as Medicare by reducing the 25% premium paid to them to be private insurers or putting them in business with a guaranteed income. Fear was generated that the Medicare Advantage programs would stop, but they haven’t and won’t because they have a huge market of baby boomers coming online. The reduction of payments to Medicare Advantage programs is saving $500 billion which helps fund the Obamacare program.

A Captive Market
The insurance and medical provider marketplace is not open, it’s captive and run by insurance companies who have been free to decide who and what they cover.
Imagine you are buying a car. But you don’t know what it costs and you don’t know what you will need. You have to sign up for payments if the car dealer says you are fit to drive, but you still may be turned down even if you have the money. If you don’t have the money, forget about it.
Car companies know what it costs to build a car. Dealers know what they can charge to make a profit. You know what the car costs and what you can afford.
Now imagine you go to the hospital for a snake bite, wind up in intensive care for three days and in the hospital for a week. Your bill will be $250,000. Stay for a month and you are looking at $1,000,000. Then your insurance company can cancel you because they find that 20 years ago you had an ear infection or you have exceeded lifetime limits. You thought you would need a Toyota which costs about as much as an outpatient operation ($20,000), but you really needed a Lamborghini.
Nobody told you what you need, what you will get, nor how will you pay for it. That’s the state of our existing open market medical system. You get to make these decisions when you are sick and scared.
Hospitals and providers don’t know what the treatment costs. They make up some numbers based on whatever their accountants say. They send bills after bills to insurance companies until they get what they can and then come after you. They are encouraged to order more procedures. The cost of providing care is soaring and the revenue captured from insurance carriers is limited. Providers charge based on the number of items or procedures. There is no incentive to limit charges. There is no cost basis for what they do.
Obamacare changes the basis for reimbursement by paying for successful treatment, not by the number of procedures. This will be advantageous to patients getting acceptable care, to providers to achieve success within monetary boundaries, and to insurers for having a fair basis for reimbursement.
Medical care charges are difficult to generate and understand. Some believe they are the product of imaginary thinking and inexplicable pricing. See article “Getting Lost in the Labyrinth of Medical Bills” by Tara Bernard. “The charges have no rhyme or reason at all,” says Gerard Anderson, director of the Center for Hospital Finance and Management at Johns Hopkins Bloomberg School of Public Health.

New York Times reporters / Harvard Professors Robert S. Kaplan and Michael E. Porter say:
“RISING health care costs are busting the federal budget as well as those of states, counties and municipalities. Policy makers and health care leaders have spent decades trying to figure out what to do about this. Yet their solutions are failing because of a fundamental and largely unrecognized problem: We don’t know what it costs to deliver health care to individual patients, much less how those costs compare to the outcomes achieved.”
So that car you bought blindfolded may just cost you all your assets, home, 401K, savings, and your income from now until kingdom come. Meanwhile the politicians are playing the blame game and passing laws to exempt them from the vagaries of this market.
And for the 30-50 million uninsured, you have to walk or bum rides.
Hopefully, Obamacare is the first step in rationalizing the cost and revenue structure of health care before it consumes our entire economy, which may happen if we don’t start down the path of affordable health care.

Medicare, Medicaid and VA, NOT socialized medicine
Medicare covers all workers who have paid into it at 65 and disabled people at any age if they have also paid into it. Medicare was passed in 1965 because older people could not get insurance and could not afford medical care. The same is true today. If you can live until 65, then you will be covered for the rest of your life as long as you can afford the premiums which are deducted from your Social Security.
Medicare pays based on a preset formula called a DRG regardless of what the medical provider charges, which keeps the costs down. Medicare does not own medical centers, doctors, nurses, or other direct patient staff. Neither do they “come between you and your doctor.” A doctor or clinic may choose not to take Medicare patients, but they would lose too much revenue because from 72 to 79 million baby boomers will be coming on Medicare in the next 30 years. The boomers will go off private medical insurance and convert to Medicare, a co-pay insurer, and a Part D medication provider.
Medicaid covers a select population who get coverage due to falling below the poverty level, children who have no insurance, disabled people, and for people who have suffered enormous ongoing medical debts that have broken their ability to pay.
The VA system covers soldiers who have suffered injuries and who have fought in wars. The VA is the only system that owns hospitals and clinics, hires doctors and nurses and controls the care of their patients. People who are treated at the VA are glad to have the system. People are generally happy with Medicare and Medicaid.
People who have private insurance wish they had the benefits of Medicare, Medicaid or the VA, especially if they have been hit with a catastrophic illness. Unfortunately, Obamacare did not have a public option or the ability to buy into Medicare.

Reducing the overhead of providing care
The overhead (or administrative costs) for Medicare, Medicaid, and the VA is around 5% of every transaction as compared to 20-25% or more for private insurance companies. One big reason is that they don’t spend resources nor have incentives to turning people down for medical procedures.
Obamacare has already started regulating insurance companies by making them pay for treatments at 80-85% of revenue or only using 15-20% for overhead. If they don’t, they have to reimburse the policyholder. This year, Missourians will receive $65 from insurance companies who have failed to follow this rule. Nationwide, they will rebate $850 million to $1 billion, or $151 per insurer.

Covering the uncovered
Obamacare is designed to offer insurance alternatives to the 30 to 50 million people who can’t get insurance in the marketplace. Let’s be clear about this. they are denied to opportunity to purchase insurance due to pre-existing conditions, they are quoted premiums that are too large to afford, or they can’t even get quotes. 3 million children (including those with pre-existing conditions) up to 26 are now covered under their parent’s policies due to Obamacare.
By 2014, the 30 to 50 million people can get insurance through state or national exchanges provided by insurance companies who agree to cover people at reasonable costs and with pre-existing conditions. They will compete to sell to individuals and small businesses. The idea is that the competition on the exchanges will reduce prices.
Every state except Alaska  has already received grants to plan and automate exchanges which must be started by November 16, 2012. Some states led by Republican governors are saying they will not set up exchanges because they are opposed to Obamacare and their costs will go up for Medicaid. Click Here to see a table of which states are ready.
Obamacare will pick up the costs for the increase in Medicaid recipients for the first five years and at 90% thereafter. If all the states participate, almost half of the uninsured would qualify for Medicaid (15-20 million). If a state opts out of Obamacare, some residents will have an option of signing up for a national exchange. However, The Urban Institute says that if states opt out, 11 million will be unable to get insurance which will impact children whose parents can’t get insurance. The Kaiser Family Foundation says:
“There will be large increases in coverage and federal funding in exchange for a small increase in state spending. States with low coverage levels and high uninsured rates will see the largest increases in coverage and federal funding. Higher levels of coverage will allow states to reduce payments they make to support uncompensated care costs.”

Why make health insurance mandatory?
The short answer is that everybody  pays because ultimately everybody plays. Nobody gets through life without some expensive medical event. The U.S. Supreme Court just ruled that it’s legal and constitutional. The Massachusetts mandatory health care plan has resulted successfully in 99% coverage of the state. Seven other states have tried and failed without mandatory participation.
The question is, why wouldn’t you want health care coverage? Those under 138% of the povery line will get assistance with a sliding scale upwards. Health insurance coverage under employers will still exist. Government employees will still have health care. And if you get an emergency, you will avoid bankruptcy and losing everything.

What about Small Businesses?
The Salt Lake Tribune reports that 3.2 million small businesses — employing 19.3 million workers nationwide — were eligible last year for tax credits worth $15.4 billion or $800 per employee.
In Utah alone, the impact is 29,280 businesses, 163,100 workers and over $125.5 million in total credits — about $769 per employee.
“For the first time, small businesses are actually getting money back right now — and will continue to do so — for offering their employees health insurance,” said John Arensmeyer, founder and CEO of an advocacy organization called Small Business Majority.

What about women, children, and people with pre-existing conditions?
Children are already receiving benefits up to age 26 on their parents’ policies. In 2014, women will no longer be charged more for premiums than men. Nobody can be denied insurance due to pre-existing conditions.

Saving money for people on Medicare
Now a new report from the U.S. Department of Health and Human Services shows even more savings from the Affordable Care Act. According to the new report, the Affordable Care Act will save average American seniors $5,000 over the next decade and has already saved them nearly $5 billion on prescription drugs since the law was enacted.
“Because of the health care law – the Affordable Care Act — the average person with traditional Medicare will save $5,000 from 2010 to 2022, according to a report today from the U.S. Department of Health and Human Services. People with Medicare who have high prescription drug costs will save much more – more than $18,000 – over the same period.
HHS Secretary Kathleen Sebelius also announced that, because of the health care law, more than 5.5 million seniors and people with disabilities saved nearly $4.5 billion on prescription drugs since the law was enacted. Seniors in the Medicare prescription drug coverage gap known as the donut hole have saved an average of $641 in the first eight months of 2012 alone. This includes $195 million in savings on prescriptions for diabetes, over $140 million on drugs to lower cholesterol and blood pressure, and $75 million on cancer drugs so far this year. Also in the first eight months of 2012, more than 19 million people with original Medicare received at least one preventive service at no cost to them”

Will Obamacare increase the Deficit?
No; in fact it saves significant money. CBO estimated that the insurance coverage provisions of the health care law would, compared to last year’s estimates for the same time period, cost $50 billion less.  Assuming no change to the rest of the estimates, this means $50 billion more in deficit reduction.  The Congressional Budget Office says:
“CBO and JCT estimate that enacting both pieces of legislation—H.R. 3590 and the reconciliation proposal—would produce a net reduction in federal deficits of $143 billion over the 2010–2019 period as result of changes in direct spending and revenues.”
It’s paid for by a slight increase in taxes for people who make over $250,000, reductions in Medicare Advantage payments, Cadillac insurance plans, medical device makers, fines for companies and people who can afford to buy insurance but choose not to, and tanning service taxes. Increased emphasis to detect  and eliminate fraud will also help.
Harvard did a study looking at how the economics of paying a set amount for treatment versus fee for service. Blue Cross Blue Shield participated and found that in one year, the cost reduced by 3.3%.

Why cover the Uninsured?
Because it’s the humane and right thing to do. Many countries have plans that cover all their citizens, and it isn’t bankrupting their countries nor their citizens. Our healthcare system is already bankrupting our citizens and on a path to bankrupt our country to the tune of an additional $230 billion over the next several years.
Why would we stand by and let people hit by diseases like cancer die or people who need transplants die because they don’t have insurance. Why would we let a child go untreated?
Why would we not care for our sick as the rich nation we are? Why would we turn our heads when our citizens desperately need the care.
Why wouldn’t we get involved in revamping health care to our citizen’s advantage rather than just the rich and employed?  After a century of trying, President Obama was the first president to sign a law that would achieve near universal health insurance coverage.
Letting things go as they are is not an option, in my opinion.

©2012 Jenny Underwood / Hill ’n Holler Review

President Obama signs the Affordable Care Act into law. (White House photo)

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