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Universal Healthcare in the United States: What every American citizen (Republican/Democrat) should know about repealing Affordable Care Act

Universal healthcare is not a new concept for many counties. Norway started their universal healthcare in 1912. There are many countries who established universal healthcare for their citizens and residents using different systems.

There are three major healthcare systems adopted by different countries– Single Payer, Two-Tier and Insurance Mandate systems¹. With the Single Payer System the government provides insurance for all residents and pays all health care expenses with some exceptions. Most European countries have Single Payer system where individuals pay higher income taxes. In Canada, they had their single payer system from 1966, and all Americans know the difference in medical costs. Two-Tier System is where the Government provides minimum insurance coverage for all and allows other insurance as needed. . In Insurance Mandate system, the government mandates that all citizens purchase insurance, from different entities. In the USA, the universal healthcare system was introduced in 2010, with Patient Protection and Affordable Care Act with the Insurance Mandate System.

This chart shows the list of countries with universal health care system², and their personal tax rate.³

Country	Year Started	System	Personal Income Tax rate
Norway	1912	Single Payer	38.70
Japan	1938	Single Payer	55.95
United Kingdom	1948	Single Payer	45.00
Kuwait	1950	Single Payer	0.00
Sweden	1955	Single Payer	57.10
Bahrain	1957	Single Payer	0.00
Brunei	1958	Single Payer	0.00
Canada	1966	Single Payer	33.00
UAE	1971	Single Payer	0.00
Finland	1972	Single Payer	51.60
Slovenia	1972	Single Payer	50.00
Italy	1978	Single Payer	48.80
Portugal	1979	Single Payer	56.50
Cyprus	1980	Single Payer	35.00
Spain	1986	Single Payer	45.00
Iceland	1990	Single Payer	46.30
New Zealand	1938	Two Tier	33.00
Australia	1975	Two Tier	47.00
Netherlands	1966	Two-Tier	52.00
Denmark	1973	Two-Tier	55.80
France	1974	Two-Tier	50.20
Ireland	1977	Two-Tier	48.00
Hong Kong	1993	Two-Tier	15.00
Singapore	1993	Two-Tier	22.00
Israel	1995	Two-Tier	50.00
Germany	1941	Insurance Mandate	47.50
Belgium	1945	Insurance Mandate	53.70
Austria	1967	Insurance Mandate	55.00
Luxembourg	1973	Insurance Mandate	43.60
Greece	1983	Insurance Mandate	48.00
South Korea	1988	Insurance Mandate	38.00
Switzerland	1994	Insurance Mandate	40.00
USA	2010	Insurance Mandate	39.60

 

The two major parties in the United States have a major role forming the progress of the country. The economic stance of the Republican Party is that taxes shouldn’t be increased for anyone ⁴; including the wealthy and that wages should be set by the free market. They do not believe in too much government regulation or the government acting for everyone. They believe in individual responsibility and so restriction in social benefits. The Democratic Party believes in the regulations and progressive taxation– higher tax rates for higher income brackets. They believe government should act for citizens. Social values are based on community and social responsibility. This polarity in the parties made it almost impossible to adopt a Single Payer system which can be done only by Federal Government acting as the provider, which is against Republican philosophy of limited influence of government and less tax.

The healthcare reform efforts started as early as 1920 in the US, continued by almost all presidents.  The Medicare bill was implemented by President Lyndon B. Johnson (D) in 1965 for senior citizens with some support from Republicans. But universal healthcare was considered virtually impossible by experts since it involved major reworking of the nation’s $2.4 trillion per year health care system. In 2010, President Obama (D) made universal health care possible with the Patient Protection and Affordable Care Act of 2010⁵, which is also known as Obama Care.   The House passed the Senate bill with a 219–212 vote on March 21, 2010, with 34 Democrats and all 178 Republicans voting against it. Obama signed the ACA into law on March 23, 2010.

Understanding the Patient Protection and Affordable Care Act of 2010:

It was hard to implement a universal healthcare system in the USA because of the political polarities and complexities around the healthcare system. An innovative solution only could make it possible without much burden on government spending. The ACA is well crafted to address the issues.

The philosophy behind ACA is, in the absence of a government run single payer insurance program, the only way to achieve a universal healthcare system is to require people to obtain their own insurance with government assistance for those who can’t afford it. Universal healthcare with the ACA was designed to be achieved by three major components: the Individual Mandate, State Mandate, and Employer Mandate. These three mandates were intended to work together to create affordable and universal healthcare for everyone. The individual mandate made it a requirement for individuals to have insurance or pay a fine since it was a tendency among young and healthy people to opt out of having insurance since they have less health problems. The state mandate was to provide healthcare to people under federal poverty level 138, which will take over health insurance to poor people. The employer mandate is to make employers provide insurance or pay a fine since employers are exempt from taxes and most are protected from controversial insurance practices such as denying coverage with pre-existing conditions.

A popular part of ACA is that it requires insurance providers to take all comers (guaranteed issue), prohibit rescinding coverage when people get sick (guaranteed renewability), limit premium variation between the healthy and sick (modified community rating) and ban lifetime limits on coverage.

1.Individual mandate: The simplest rule of ACA requires almost all Americans to carry health insurance or pay a fine which is known as the individual mandate. Sometimes there is a tendency for young people not to have insurance. Older people need it and so it is a long term investment and social responsibility to be a part of the ACA. There are statutory exemptions from the individual mandate. Religious reasons are applicable for exemptions. People who belong to Indian tribes and with income below the income tax return filing requirement are exempt. Short coverage gap, hardship, affordability, incarceration, not lawfully present US citizen are other reasons to be exempt from the individual mandate.

The individual mandate was proposed in a 1989 Heritage Foundation brief titled “Assuring Affordable Health Care for All Americans,” as a counterpoint to the single-payer system and the employer mandate. John Chafee, of Rhode Island, and co-sponsored by eighteen Republicans introduced Health Equity and Access Reform Today Act in 1993, the Republicans’ alternative to President Clinton’s health-reform bill which called for an employer mandate. Clinton bill failed, but democrats came to recognize the opportunity that the Chafee bill had presented. Ten years later, Senator Ron Wyden, an Oregon Democrat, introduced the Healthy Americans Act with an individual mandate, which received more bipartisan support than any universal health-care proposal in the history of the Senate. This trend led to the Patient Protection and Affordable Care Act—which included an individual mandate.

2. State Mandate

At first, the ACA required states to expand coverage to everyone making less than 138% of the Federal Poverty Level (i.e., an individual with less than $16,000/year) or lose federal funding to Medicaid. Here’s a chart showing the federal poverty level.

Household	100%	133%	150%	200%	250%	300%	400%
1	$11,880	$15,800	$17,820	$23,760	$29,700	$35,640	$47,520
2	16,020	21,307	24,030	32,040	40,050	48,060	64,080
3	20,160	26,813	30,240	40,320	50,400	60,480	80,640
4	24,300	32,319	36,450	48,600	60,750	72,900	97,200
5	28,440	37,825	42,660	56,880	71,100	85,320	113,760
6	32,580	43,331	48,870	65,160	81,450	97,740	130,320
7	36,730	48,851	55,095	73,460	91,825	110,190	146,920
8	40,890	54,384	61,335	81,780	102,225	122,670	163,560

The ACA Medicaid expansion was designed to address the high uninsured rates among low-income adults and families. It provides a coverage option for people who had limited access to employer coverage and limited income to purchase coverage on their own.  Medicaid expansion was one of the extraordinarily help states got from federal government. For every one dollar the state spent, the federal government would spend nine dollars. The feds will pick up the vast majority of the newly eligible people, 100% in 2014-16; 95% in 2017; 94% in 2018; 93% in 2019; 90% in 2020 and subsequent years.

But unfortunately, the ACA received such an opposition from states where they believe federal government should not exert any control over them. This state mandate was changed during the Supreme Court ruling in NFIB⁶ on Obamacare. No Supreme Court decision since 1937 had struck down a federal spending power program, and so the NFIB decision was a surprise to many people⁷. The Court agreed with the ACA’s Medicaid expansion, but made it an option, not a requirement for the states. It would be unconstitutionally coercive, seven justices held, to threaten noncompliant states with revocation of their existing levels of federal Medicaid funding. With this decision, States opted-out of the Medicaid Expansion, leaving millions of poor working families in the “Medicaid coverage gap” between those who qualify for Medicaid and those who qualify for marketplace subsidies. Some states already had some other plans in place. The number one reason cited for rejecting expansion was cost. But most of the states which adopted Medicaid expansion are doing well without much spending, and they are providing healthcare to most of their residents.

3. Employer Mandate: The ACA is intended to provide universal coverage for everyone and so it will reduce the inflation rate for insurance premiums. Employers are a major part of the economy and so it is important that they take part of the responsibility, and thus employer mandate. Employers with more than 50 employees must pay a fine of $2000 if they don’t provide coverage. This is not established yet.

Other aspects of ACA:

Taxes:

The Cadillac tax is for individuals who have health care premiums of more than $10,200, which is not in effect until 2018. Individuals with income more than 200,000 and family with income of $250,000 have to pay a higher Medicare payroll tax and pay a new Medicare tax on investment income. I think that is a good way to generate more income since it affects only 2% of the population, and those people do not need government help for Medicare like the other lower income people. It is all about fairness in healthcare for every citizen.

Subsidies:

About 2.7 million taxpayers claimed approximately $9 billion in subsidies, reporting an average subsidy of $3,400 in 2015. About 40 percent claimed less than $2,000, 40 percent claimed $2,000 to $5,000, and 20 percent claimed $5,000 or more. In all, the IRS said it has collected $1.5 billion from the individual mandate penalty included in the health law. About 40 percent of taxpayers who paid a penalty paid less than $100.

State Innovation:

Recognizing the critical role that states play in providing, purchasing, and regulating health care services, the CMS (Center for Medicaid & Medicare Services) Innovation Center established the State Innovation Models Initiative (SIM) to help states achieve better health outcomes at lower cost. SIM grants provide federal dollars and technical assistance for a wide range of health system transformation efforts. Thirty-nine states have received SIM grants for design, pretesting, or testing activities. The ACA has provided a platform and a commitment to testing new approaches to how health care is delivered and paid for, as well as recognition that there is no single solution.

Other Provisions:

ACA’s many other provisions are intended to resolve underlying problems in how health care is delivered and paid for in the United States. They centered on testing new models of health care delivery, shifting from a reimbursement system based on the volume of services provided to one based on the value of care, and investing in resources for system wide improvement.

More about ACA:

The ACA is well crafted and the law itself is more than 1000 pages. There are different parts.

• Title I Quality, affordable health care for all Americans
• Title II The role of public programs
• Title III Improving the quality and efficiency of health care
• Title IV Preventing chronic disease and improving public health
• Title V Health care workforce
• Title VI Transparency and program integrity
• Title VII Improving access to innovative medical therapies
• Title VIII Community living assistance services and supports
• Title IX Revenue Provisions
• Title X Reauthorization of the Indian Health Care Improvement Act

This nonpartisan site, Obamacarefacts provides the information in a simple and detailed way.

Is the ACA working?

The ACA is still in its experimental stage with many achievements and missteps. Since several of the Affordable Care Act’s coverage provisions took effect, about 16.4 million uninsured people have gained health insurance coverage as of 2015⁸. The uninsured rate is now at the lowest level recorded across five decades of data. Up to 129 million Americans with pre-existing conditions, including up to 17 million children, are no longer at risk of being denied coverage because of their health. Consumers have saved $9 billion since 2011 because the law requires insurance companies to spend at least 80 cents of every premium dollar on consumers’ health care and empowers States to review and negotiate premium increases. 424 Accountable Care Organizations (ACOs) are providing coordinated, quality care to more than 7.8 million beneficiaries and an estimated 20 percent of Medicare reimbursements have shifted to payment models directly linking provider reimbursement to the health and well-being of their patients.

Many uninsured people are from States who didn’t adopt the Medicaid expansion, and many people who pay penalties are also from those states because premiums are high for them compared to other states. Still today, 19 states didn’t expand Medicaid, and those are the states seeing higher percentages of people without healthcare. That made the goal of the ACA harder, and the premium costs also increased because of that.

Here’s a chart showing the uninsured rate before and after ACA in every state.

State	Uninsured-2010 (Before ACA)	Uninsured- 2016 (After ACA)	State Medicaid Expansion Participation-Y/N	Uninsured Change 2010 to 2016	Governor
US	15.50%	9%
Alabama	14.60%	11%	N	3.60%	R
Alaska	19.90%	13%	N	6.90%	R
Arizona	16.90%	13%	Y	3.90%	R
Arkansas	17.50%	9%	Y	8.50%	D
California	18.50%	8%	Y	10.50%	D
Colorado	15.90%	9%	Y	6.90%	D
Connecticut	9.10%	6%	Y	3.10%	D
Delaware	9.70%	7%	Y	2.70%	D
District of Columbia	7.60%	4%	Y	3.60%	D
Florida	21.30%	13%	N	8.30%	R
Georgia	19.70%	14%	N	5.70%	R
Hawaii	7.90%	5%	Y	2.90%	D
Idaho	17.70%	11%	N	6.70%	R
Illinois	13.80%	6%	Y	7.80%	D
Indiana	14.80%	9%	X	5.80%	R
Iowa	9.30%	5%	Y	4.30%	R
Kansas	13.90%	10%	N	3.90%	R
Kentucky	15.30%	6%	Y	9.30%	D
Louisiana	17.80%	11%	N	6.80%	R
Maine	10.10%	5%	N	5.10%	R
Maryland	11.30%	7%	Y	4.30%	D
Massachusetts	4.40%	4%	Y	0.40%	D
Michigan	12.40%	6%	Y	6.40%	R
Minnesota	9.10%	6%	Y	3.10%	D
Mississippi	18.20%	13%	N	5.20%	R
Missouri	13.20%	9%	Y	4.20%	D
Montana	17.30%	10%	N	7.30%	R
Nebraska	11.50%	8%	N	3.50%	R
Nevada	22.60%	11%	Y	11.60%	R
New Hampshire	11.10%	5%	Y	6.10%	D
New Jersey	13.20%	8%	Y	5.20%	R
New Mexico	19.60%	12%	Y	7.60%	R
New York	11.90%	6%	Y	5.90%	D
North Carolina	16.80%	11%	N	5.80%	R
North Dakota	9.80%	8%	Y	1.80%	R
Ohio	12.30%	6%	Y	6.30%	R
Oklahoma	18.90%	13%	N	5.90%	R
Oregon	17.10%	7%	Y	10.10%	D
Pennsylvania	10.20%	6%	N	4.20%	R
Rhode Island	12.20%	5%	Y	7.20%	D
South Carolina	17.50%	11%	N	6.50%	R
South Dakota	12.40%	9%	N	3.40%	R
Tennessee	14.40%	11%	N	3.40%	R
Texas	23.70%	16%	N	7.70%	R
Utah	15.30%	10%	N	5.30%	R
Vermont	8.00%	5%	N	3.00%	D
Virginia	13.10%	9%	N	4.10%	R
Washington	14.20%	7%	Y	7.20%	D
West Virginia	14.60%	6%	Y	8.60%	D
Wisconsin	9.40%	7%	N	2.40%	R
Wyoming	14.90%	9%	N	5.90%	R

 

Future of the ACA

The opponents of ACA have never accepted the great benefits ACA brings to citizens. Many red states hold on to the political fight instead of accepting the benefits they can give to the citizens with bipartisan effort. In 2015, the senate voted down a Republican effort to repeal ACA the GOP’s first attempt to get rid of the president’s health law since the party took control of the chamber. The Senate has voted three other times on legislation to fully repeal ACA, in March 2010, February 2011 and March 2013. The Senate has voted about three dozen times on bills to repeal all or part of the health care law since it was passed in 2010. The election of Donald Trump as president in 2016 and a Republican majority in Congress make it a possibility that future of ACA can be in peril. They already started the process without a solution, which is not good for the country.

Though there are many benefits and some mistakes, for the very first time in the United States, the concept of universal healthcare became an achievable reality with the introduction of ACA. It will be good for politicians to think what is good for their people and embrace ACA and rebuild on it instead of destructing it. American citizens should understand no matter what political  party you may belong to, you have to construct the country and act for all citizens. Parties must behave with civilian responsibility and stop acting upon impulse and pride. Republican Party must rethink about their plans to repeal or replace ACA. People who voted for the Republican Party must tell their party leaders that you didn’t select them to destroy whatever is built, but build upon it and empower it with more options and innovation so that everyone has health insurance, which is a basic right for every citizen and resident in the United States of America. Any of the decisions on the ACA should be analyzed with experts; otherwise all the efforts and advancement that came with ACA will be history.

 

References:

1. PraveenGangha, https://truecostblog.com/2009/08/09/countries-with-universal-healthcare-by-date/ (Aug9 , 2009)
2. Id.
3. Trading Economics, http://www.tradingeconomics.com/country-list/personal-income-tax-rate
4. Diffen, http://www.diffen.com/difference/Democrat_vs_Republican

5. R.3590 – Patient Protection and Affordable Care Act, https://www.congress.gov/bill/111th-congress/house-bill/3590
6. Elizabeth Weeks Leonard, Crafting A Narrative For The Red State Option, 102 KY. L.J. 381 (2014).
7. Nat. Fedn. of Indep. Business v. Sebelius, 132 S. Ct. 2566 (2012)
8. The Domestic Policy Council, Accomplishments of the Affordable Care Act- A 5th Year Anniversary Report, Whitehouse, (March 23, 2015)
9. Matt Broaddus,Edwin Park, Uninsured Rate Fell or Held Steady in Almost Every State Last Year, New Census Data Show, http://www.cbpp.org/research/uninsured-rate-fell-or-held-steady-in-almost-every-state-last-year-new-census-data-show (September 21, 2012)Kaiser Family Foundation, http://kff.org/state-category/health-coverage-uninsured/

Books referred:

Staff of the Washington Post, Landmark: The Inside Story of America’s New Health-Care Law and What It Means for All of Us, PublicAffairs (April 2010).

David Cutler, The Quality Cure, University of California Press (2014).