My View: The incredible shrinking Obamacare issue
October 18, 2013
The Obamacare (Affordable Care Act, ACA) controversy has been rolled into reforming entitlements as part of the dealing with the White House on raising the debt ceiling.and deficit reduction. However, the GOP’s rationale for defunding, repealing, delaying or sabotaging the ACA because it would increase the deficit is bogus. In fact, the GOP proposals would add to the deficit.
The GOP House of Representatives has reduced its conditions to ending the shutdown or raising the debt ceiling from defunding the ACA to delaying it a year to just removing the tax on medical devices, or removing the penalty on individuals who fail to sign up for insurance by March 31. Rep. Paul Ryan did not even mention the ACA in an op-ed in the New York Times as he tried to move the GOP goal to reforming all entitlements as a debt ceiling and deficit reducing bargaining chip.
Tea Party diehards still want to include the ACA in the entitlement discussion. To tie the ACA to deficit negotiations is nonsensical. The Congressional Budget Office said the ACA would decrease the deficit by $109 billion over 10 years and that the ACA added 12 years to the life of Medicare. The ACA has a “pay for” built in through a variety of mechanisms: reducing the overpayment to insurers for coverage and holding them to no more than 20 percent of premiums for overhead; reducing payments to hospitals because they no longer have to absorb the costs of treating uninsured patients who could not pay their bills. The previously uninsured now have affordable access to insurance. Competition within the marketplace exchanges are resulting in premiums which are even 16 percent lower than original predictions. Unnecessary but expensive subsidies to Medicare Advantage private insurer administrators have ended. Some taxes and penalties will also produce revenue.
Some fear that increasing the debt limit is a go-ahead to go into debt more in the future. Lifting the debt limit does not approve more expenditures than Congress has already approved. There are those that contend that if the debt limit increase is not approved, nothing will happen. There is no one in the business community or at Wall Street or the prime funders of the Tea Party movement, the Koch Brothers, who agree with that.
The GOP advocates could make the deficit worse. For example, removing the tax on medical devices could add to the deficit by at least $29 billion in lost revenue over 10 years. Another “pay for” should be included in any deal to maintain the ACA’s contribution to deficit reduction. Some deal is likely since the President says it is not a “core” part of the ACA.
Another GOP proposal, to delay the penalties associated with the mandate for young people to sign up is a “core” attack on the ACA. Not bringing the younger and healthy into the insurance pool would sabotage the affordability of covering pre-existing conditions because that is what makes that part of the ACA affordable. The GOP argues the President let large businesses off the hook for a year from being fined for not having health insurance for their employees. The difference is the impact on the cost of the ACA. Only a very small percent of large businesses do not already provide employee insurance.
Using computer glitches in the federal website as a reason to delay is a weak argument since computer software can be fixed and administrators have until March 31, 2014 . Fourteen states like Colorado that opted to run their own systems have better results than the states who relied on the federal system. Sign-up by computer Is not the only method to enroll. Marketplace exchanges provide telephone and in-person enrollment as alternatives to online sign-ups.
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