Obamacare set up to benefit insurers

By Jonathan Walker, M.D.
The Journal Gazette (Fort Wayne, Ind.), Dec. 8, 2013

The rollout of the Affordable Care Act, aka Obamacare, has been anything but auspicious. And, depending on one’s politics, reactions have ranged from despair to vindictive glee. But if you are stuck on the superficial level – watching the president backpedal while wondering about the problems with the online exchanges – you are being misdirected from the real drama.

It all started about 10 years ago. The big for-profit insurance companies – WellPoint, Cigna, United and the others – realized they were heading for trouble. Their business model is simple; they have to put profits over patients in order to survive. But people were starting to get frustrated with how those companies behaved.

There were movies, articles and books calling out the way those companies were denying coverage, throwing people off plans, and hiding behind walls of impenetrable bureaucracy. There were lawsuits accusing them of large-scale fraud, and high-profile news stories implicating them in poor medical outcomes.

Those companies knew they had to improve their reputation before popular opinion came down on them. Their biggest fear was that people might start looking at Medicare – the real public option – as a solution.

As a result, they agreed in principle to ignore pre-existing conditions. But they knew that would cost them a lot of money, so they advocated for what became the basic structure of Obamacare: a mandate to gather in healthy customers, the subsidies to help those customers buy their products, and the exchanges to funnel paying customers to their door.

They were so successful in their attempts to co-opt reform that in 2009, Business Week famously announced that they had “won” – that whatever shape reform would take, those companies had been able to get what they wanted from the bargaining table.

Think about that in the context of what you are learning from the news. The new law guaranteed that taxpayers would help those companies by administering the mandate that forces people to buy their product. We also pay for the subsidies that allow people to be able to afford what they are selling. We then have to pay to set up the exchanges so people can easily transfer that money to those companies.

There is even a part of the law that few people are aware of: if those companies have to pay for too many sick people, they can apply to the government to be reimbursed for their losses! One begins to wonder exactly whom the ACA was designed to help.

Given all this, the furor over the exchanges becomes especially grating. Taxpayers are being asked to pay for a shopping site – like, but far more complex. The site is supposed to work with each company’s myriad plans, and it is supposed to make sure those companies get the maximum amount of taxpayer dollars through the subsidies. Yet there is no sign that any of those companies are doing anything to actually help pay for or manage the site – we are stuck with it.

It is mind-boggling that Obamacare has been portrayed as a government takeover; it actually represents a corporate takeover of a good-faith attempt to improve access to health care. There are some really great parts to the ACA, but the fundamental structure perpetuates companies that, by their very nature, have to avoid paying for us when we are sick.

There is another way that avoids all the confusion and complexity. Congress could have simply raised the Medicare tax – far less than what we all pay those companies – and then put us all on a basic level of coverage through Medicare.

A lot of data suggest such a system could be more efficient and far cheaper, and we could always add all the bells and whistles we want on top of that. But that idea has been kept so far off the table that most Americans don’t even realize that it is a possibility.

So whether you are laughing or crying about the Obamacare rollout, recognize that what we are seeing is one industry’s strategic brilliance at convincing us that we have no choice but to work with them. And as you start to see thousands of your own dollars flow into premiums, copays and deductibles, recognize that we are all doing our part to keep those companies alive. Hopefully they will return the favor.

Dr. Jonathan D. Walker is an assistant clinical professor at Indiana University School of Medicine in Fort Wayne and a member of Hoosiers for a Commonsense Health Plan. He wrote this for The Journal Gazette.