Affordable Care Act: a taxpayer subsidy for the health insurance industry

Although many of my friends have praised the Affordable Care Act and Obama for working to get it passed, I have a different view.  When, to appease the health insurance industry, Obama bargained away the “public option,” I knew the ACA was not going to get us to single payer. My friends tell me to be happy that more people will get health insurance coverage, and to “not let the perfect be the enemy of the possible.” I tell them it’s important to not let the possible cloud our vision. The Affordable Care Act is not a healthcare bill, like Medicare, it is a taxpayer funded, for-profit health insurance subsidy that makes health insurance more “affordable.”  The good part is that it expands Medicaid coverage. The bad part is that it expands coverage at the discretion of the states. Another good part is that it has some new cost controls in place. The bad part, not nearly enough.

What the ACA is not: universal coverage, a step to single payer, or a solution for the working poor who don’t qualify for Medicaid and don’t make enough to buy insurance on the exchanges. What the ACA is: a fake “market” solution to a health care crisis— “fake” because it is built on a government giveaway to private business. It expands private health insurance coverage through government subsidies and includes a government mandate that everyone buy insurance. This “public-private partnership” serves to further entrench and enrich the private health insurance industry at taxpayer expense, and probably closes the door on single payer for a decade, if not decades.

A single payer system, like Medicare, would not only guarantee universal health care for all, but it would drastically reduce the cost for health care and prescription drugs, stopping corporate price gouging in its tracks. A George Mason University study confirms that U.S. healthcare spending is more than twice the average for developed countries. And what does our expensive, profit-driven system buy us? The National Research Council and Institute of Medicine reports that the U.S. is near the bottom in a study of 17 affluent countries in nine key areas of health: infant mortality and low birth weight; injuries and homicides; teenage pregnancies and sexually transmitted infections; prevalence of HIV and AIDS; drug related deaths; obesity and diabetes; heart disease; chronic lung diseases; and disability.

The ACA, written by Liz Fowler, a former VP for WellPoint, made sure insurance industry profits were prioritized. In service of that goal, the ACA uses public taxpayer funds to market the private insurance industry’s products to “consumers.” That would be the government run and funded ACA websites. In exchange for removing some of the most egregious and vicious industry practices, such as denying coverage for preexisting conditions and dropping coverage when people get sick, the industry gets to expand its customer base—for free, and with the added bonus of a government mandate to buy their products. On top of us footing the bill for marketing private, for profit health insurance to ourselves, we also provide a subsidy to those of us who are lower-income consumers (in reality a subsidy to the for-profit health insurance industry) to make the unaffordable, profit driven insurance “affordable.”

The Obama administration’s push to sign up young people for dubious high deductible ”bronze” plans is not so they can have access to health care. It’s to make sure the insurance companies are made whole, that the revenues promised them are met. The government and industry need healthy young people to sign up to offset those who are older and sicker so that industry profits are protected. Because this is a government subsidized for-profit program, the ACA will only be a “success,” if the profits are there for the industry.  If the profits fail to materialize, the ACA falls apart. The media, ever a servant to power, accepts without question the priority of the insurance industry’s profits.

Yves Smith, at Naked Capitalism, quotes Ezra Klein and Sarah Kiff at the Washington Post:

First Ezra Klein:

The next challenge for the law, as the White House knows, will be the outreach challenge of signing up enough young-and-healthy people to balance out its risk pools.

And Sarah Kliff amplifies:

“One of the things I’ve been curious about is any demographic information about who is and isn’t signing up, so we can get a sense of how to best adjust and tailor our public efforts,” Chris Abele [a country official from Milwaukee] asked.

No dice. “Chris, at this point we hope to add that to our statistics very soon but we don’t have the breakdown by age and zip code and area,” Sebelius responded. As to how to focus outreach efforts, Sebelius directed Abele to “focus on the general population in terms of likely uninsured but also young and healthy individuals.”

So here we have yet another insane, sociopathic statement from the political class, and everybody who hears it nods and smiles away as if everything is perfectly normal. And it is! It is!

Did you hear what the Secretary of Health and Human Services really, actually said? She said her first priority was not health. Rather, her first priority is the actuarial soundness of the ObamaCare pool. For example, if every sick person in the United States who doesn’t have insurance signed up, and nobody else did, that would be a disaster. (Not to the sick people, of course.) And why? Because the insurance companies would lose money.

The ACA offers some improvements in health insurance coverage in exchange for an expanded consumer base. In addition to removing the most cruel aspects of health insurance mentioned previously, the industry is providing preventive care, there are caps on administrative costs, and kids can stay on parents plans until age 26. But—and here’s the progressive view—we are nowhere near where we really need to be.  If we are to have a humane healthcare delivery system, one that is truly available to everyone, our sociopathic, parasitic, for-profit insurance system has to go.

Eric Naumburg, MD, writes at Physicians for a National Health Program,

We need a humane healthcare system, not a profit-driven one. In a rich country like America, healthcare should be a public good, not a privilege. If we expanded traditional Medicare to everyone, there would be no need to figure out if you can afford a bronze, silver, gold or platinum plan; instead there’d be one standard of care for everyone.

Thanks to the ACA strengthening the for-profit healthcare system through taxpayer-paid, corporate welfare, “Medicare for all” is going to be a harder fight and take longer to achieve. The health insurance industry, further entrenched, is already doing well. An October 26, 2013 Forbes headline reads: “Despite Glitches, Obamacare Profit Windfall to Insurers Well Underway.”