How Obamacare Will Affect You: An Editorial.

GENERAL SCIENTIFIC SESSION 3 GENERAL SCIENTIFIC SESSION 3

How Obamacare Will Affect You: An Editorial Fernando G. Diaz, MD, PhD, JD Department of Neurological Surgery, Oakland University/William Beaumont School of Medicine, Royal Oak, Michigan Correspondence: Fernando G. Diaz, MD, PhD, JD, Professor and Chair, Neurological Surgery Department, Oakland University/William Beaumont School of Medicine, Royal Oak, MI. E-mail: [email protected] Copyright © 2015 by the Congress of Neurological Surgeons.

T

he Affordable Care Act (ACA) is the most sweeping legislation affecting every individual in the United States in the last century. The law was designed to provide improved, if not universal, access to health care among the American public. The law was established with the intent of having minimal insurance policy standards, to provide access to all individuals regardless of whether they had preexisting conditions affecting their health, to establish fair prices that could be uniformly paid by all US citizens, and to provide government subsidies for those individuals who had insufficient means to pay for themselves, up to 400% of the poverty level. This act requires the wealthiest Americans to pay for the support of these subsidies and was expected to cost a total of $1.4 trillion dollars. Many changes have occurred since the bill was first passed, and effects other than those forecasted by the administration have resulted in the majority of the US population now rejecting the full adoption of the legislation. This review presents the essential concepts of the ACA, otherwise commonly known as Obamacare, the conflicts created by the various sections of the law, the actual costs created by the ACA and the effect on the US population, the various taxes that were required to fund the ambitious plan laid out by President Obama, implementation of the enrollment process and the problems it created, the lack of transparency of the law and its effects on the overall US economy, the failure of President Obama to deliver on many of his promises regarding the effects of the law on the American public, and what possible avenues are available to deal with this significant legislation.

THE PATIENT PROTECTION AND AFFORDABLE CARE ACT

The 2014 CNS Annual Meeting presentation on which this article is based is available at http://bit.ly/1IIlOXv.

CLINICAL NEUROSURGERY

The ACA, otherwise widely known as Obamacare, is sweeping healthcare legislation established with the intent of reducing the cost of health care in the United States while at the same time making health care available to all US citizens and legal immigrants. The essential provisions of the law require the following1:

• Insurance companies may not deny access to the healthcare plans for pre-existing medical conditions, nor can they raise premiums for those individuals to levels greater than are otherwise paid in the same region. • Minimal standards of health care are uniformly available to everyone. • An Individual Mandate that requires that everyone not otherwise covered by an employer plan, Medicare, or Medicaid pays for health insurance with the provision of subsidies for those who cannot afford full payment. If anyone chooses not to participate, a penalty fee may be paid instead. • Healthcare Exchanges are established by individual states or the federal government to provide healthcare insurance for individuals with limited means or for small businesses. • Individual subsidies are provided to those qualified in the State or Federal Healthcare Exchanges, extending from 100% to 400% of the federal poverty level. • Medicaid is expanded to include up to 133% of the federal poverty level, although individual states are given the option not to participate in this expansion. This represents 15.9 million Americans and children below the 138% poverty level. • Medicare payments to hospitals and providers are transformed from individual payments to bundled payments. The Medicare Part D drug coverage gap is gradually eliminated. • The employer mandate requires businesses with $50 employees to provide healthcare insurance or pay a penalty of $2000 per employee. The essential benefits coverage included in the ACA are emergency services, ambulatory care, hospitalization, maternity coverage and newborn care, mental health and substance abuse services, prescription drugs, rehabilitative services and devices, laboratory and diagnostic services, wellness preservation, chronic disease management, and pediatric care, including dental and vision services.1 The ACA bill was introduced in the House under the name of Service Members Home

VOLUME 62 | NUMBER 1 | AUGUST 2015 | 81

Copyright © Congress of Neurological Surgeons. Unauthorized reproduction of this article is prohibited

DIAZ

Ownership Tax Act of 2009 and was uniformly voted in with no objections on October 8, 2009. The act then went to the Senate, where it was drastically changed, passing by 1 vote on December 24, 2009, under the new name Patient Protection and Affordable Care Act. When the Senate passed the bill, it consisted of .2500 pages of legislative writing. The vote was highly contested. The final vote was supported by all 58 Democrats and 2 Independent senators and opposed by 39 Republican senators with 1 Republican abstention. The new bill went back to the House for ratification and was, for the most part, not read by those voting on it. In March 2010, the 111th Congress passed this health reform legislation, the Patient Protection and Affordable Care Act (ACA; P.L. 111-148) (A). Passage of the ACA bill by the House was preceded by Nancy Pelosi’s famous quote: “We have to pass the bill so that you can find out what is in it. . ..”2 President Obama signed the ACA into law on March 23, 2010. “The Individual Mandate of the law was constitutionally challenged in front of the US Supreme Court. On June 28, 2012, the Supreme Court issued its decision in National Federation of Independent Business v. Sebelius, finding that the Individual Mandate is a constitutional exercise of the authority of Congress to levy taxes.”1 Justice Roberts cast the deciding vote for constitutionality, viewing the Individual Mandate as a “tax.” The law has since been modified 46 times, 28 by President Obama without the approval of Congress, 16 times by Congress, which the President has signed, and 2 by the Supreme Court. Multiple challenges to the law continue to date, and these challenges are currently making their way to the Supreme Court. The ACA requirement that the states expand Medicaid eligibility to include up to 133% of the federal poverty line under penalty of losing Federal Medicaid subsidies was found to be unconstitutional under National Federation of Independent Businesses v. Sebelius.1 Most important now is the challenge to the provision that was made by the Internal Revenue Service to allow the Federal Health Exchanges to provide subsidies to those individuals who lack the means to pay for the insurance. The law originally calls for the states to be the only provider of subsidies.1,3

CONFLICTING INTERESTS The main premise of Obamacare is to provide access to health care to as many Americans as possible. This requires that 45 million uninsured individuals, identified when the law was first introduced, would have to be incorporated into the US healthcare system. Most uninsured individuals generally sought care in ambulatory clinics that did not charge for their services, or these individuals went to hospital emergency rooms to obtain care. The large majority of these patients were treated without question and referred to the Medicaid office to obtain insurance. Adding 45 million uninsured individuals to the healthcare plans in the United States represents a significant cost to the American public because newly insured patients would likely increase visits to doctor’s offices, require additional medications and additional diagnostic and surgical procedures, demand additional social support

82 | VOLUME 62 | NUMBER 1 | AUGUST 2015

programs, and expect long-term care available to them at the same level as that available to any other insured individual.4 The increased demand for services and physician time creates a conflict with the initial plan expectations to reduce costs. Medicare and related services will have a significant reduction in funding; physicians, hospitals, and other providers will experience reductions in compensation for their services.5 The Obama administration believes that reductions in Medicare funding will be well tolerated and will not result in negative outcomes. They base their conclusions on a report from the Dartmouth Atlas of Health Care that identified no differences in outcome among patients who had less hospital care and services.6 The Dartmouth analysis found that, in retrospective chart reviews, patients die equally in hospitals with higher or lower levels of care; no longterm outcomes on survivors were considered. A similar study by Romley et al7 found that Medicare patients who were hospitalized and treated fully had greater survival rates and better longterm survival with greater functional recovery. Obamacare also empowers an Independent Payment Advisory Board, composed of nonphysician members appointed by the president, to legislate on further reductions on Medicare spending.1,4,8 Obamacare creates a conflict among ages and personal beliefs. Young patients are expected to pay for a significant portion of the care of older individuals. Because young adults are not expected to need healthcare services in actuarial bases, the payment for their insurance premiums is basically used to offset the costs incurred by older adults. “The law requires that everyone pay for all services whether you need them or not.” Young adults are required to pay for hospice services, cancer monitoring in the form of “free” mammograms, Pap smears or colonoscopies, and adult children #26 years of age. Older adults are required to pay for childcare and vaccinations, pregnancy prevention, abortions, and maternity care. Religious organizations must pay for health services for their employees, including abortions and pregnancy prevention.4,8 All these conflicts make the Individual Mandate unworkable. The young adult will choose not to pay for health insurance when he or she realizes that the cost of that health insurance is much greater than the penalty that must be paid for not being insured.1,4,8 The health insurance plans provided in the exchanges are identical and vary only in cost of premium and copays. A Bronze plan has the lowest premium cost and the highest copay cost. The Platinum plan has the highest premium cost and the lowest copay. It is likely that physician offices and healthcare providers will require upfront payment of deductibles before the service required is rendered. Because most of these patients require subsidies to purchase the insurance, it is unlikely that any of them will be able to pay the copays before receiving service. Furthermore, when the young adult is faced with a serious medical condition, a decision can be made to purchase insurance at that time because there is no restriction on insurance for preexisting conditions.4 The employer mandate was designed to act as a buffer to cover those full-time employees who could not get health insurance through

www.neurosurgery-online.com


THE AFFORDABLE CARE ACT

their employers. Employers with ,50 employees receive a subsidy to support the health insurance plan. Employers with .50 employees are expected to provide a qualified healthcare plan option or to pay a penalty of $2000 per employee. If an employee is awarded a health plan through the exchanges, the employer is fined $3000 per employee, not counting the first 30 full-time employees.1,4,8 The cost of health insurance has risen over the last 2 years as Obamacare has been implemented. The average change in cost for the United States from 2011 to 2013 has been 43%, ranging per state from 27% in Oregon to 106% in South Carolina.8 The plan will add $1.79 per hour per full-time employee in most states and $2 per hour per full-time employee in New York.4 The average cost per employee for a plan that complies with Obamacare requirements in Michigan is $8700 per full-time employee. The penalty for not providing health insurance through the employer is $2000 per full-time employee. These changes in insurance cost when translated by the employer into new expenses for the corporation will represent a choice between hiring fewer full-time employees or not paying for insurance premiums and paying the penalty instead.4,8 An alternative to reduce the cost of high insurance premiums for full-time employees is to reduce the number of full-time employees and hire people who will work ,30 hours per week. The employer is not required to purchase health insurance for part-time employees and yet will be able to get the work done by increasing the pool of part-time workers.4

COSTS OF THE ACA The February 2011 budget projections prepared by the Congressional Budget Office estimated that the ACA would reduce the federal deficit by $210 billion over the period of 2012 to 2021.1 However, it is now estimated that the cost of health insurance will increase as a result of Obamacare.4,8 Health insurance analysts estimated that the premiums for individual health insurance increased by approximately 59% in the United States in response to the new taxes, including mandates needed to implement the law.9-11 Medicaid costs added to cover the expansion of the program under the ACA law rose from $265 billion to $305 billion in just the first year of fully functional Obamacare. The Congressional Budget Office estimated that the cost for Medicaid under the ACA would continue to increase by about 800% over the next decade. The Centers for Medicare & Medicaid Services reported that those who selected a Market Place Plan (subsidized Obamacare) amounted to 85% of the total.9 That means that the vast majority of those choosing Obamacare and enrolling will not be making a meaningful contribution toward offsetting the cost of the plan. The total program cost growth by the end of 2014, including both the private insurance portion of subsidies and the Medicaid portion, is estimated by the Congressional Budget Office to be $716 billion.4,8,9 The Centers for Medicare & Medicaid Services report on national health expenditures revealed support for the increasing expenses projected from the addition of 40 million uninsured


people to the US healthcare plans.9 Healthcare spending is expected to be 19.9% of the Gross National Product by 2012, with an average projected growth of 6.5% annually from 2012 to 2022. The average annual increase utilization by payer from 2015 to 2022 is projected to be as follows: Medicare, 7.5% (including expense reductions); Medicaid, 6.9%; private health insurance, 6%; and out-of-pocket expenses, 9.1%. The expected average annual consumption growth of resources by healthcare provider from 2015 to 2024 is as follows: hospital, 6.4%; physician, 6.3%; and prescription drugs, 6.3%.9 One of the major changes in health insurance coverage is the provision to prevent insurance companies from overcharging, terminating, or rejecting individuals with pre-existing health conditions who would have a higher ticket price.1 Because the insurance companies were faced with the inability to collect the possible increased costs directly from affected persons, it became necessary for them to hike the cost of health insurance to all the individuals to whom they sell healthcare policies in the United States.10,11 The average annual payment for family health insurance by an employer-supported plan in 2009 was $13375. After the implementation of Obamacare, the average annual premium for healthcare coverage by an employersponsored plan for a family of 4 was $16351.10 The left-wing press excused and encouraged support for the additional costs created by the ACA with commentaries such as that by A. Ruthrauff12: Most of it will be paid out by insurance companies, who will have a whole bunch of new policyholders because of Obamacare. Much of it will be paid by the government in subsidies and increased Medicaid enrollment. And yes, some of it will be paid by healthy (for now), well-off (for now) young (for now!) people who would otherwise forgo insurance and roll the dice on not ever being carted to the hospital in an ambulance.

“Wealthy insurance companies” will not absorb the cost of the increased costs of the program. Insurance companies are in business to increase profits and payment to their shareholders. The increased costs of health care through Obamacare will be passed by the insurance companies to the public in the form of higher premiums. Americans will make payment for the government subsidies, in the form of increased taxes, and the healthy and young Americans will be paying out of pocket for either increased insurance premiums or penalties (Figure 1).

TAXES REQUIRED TO FUND OBAMACARE Senator Obama campaigned effectively in 2008, saying: “I can make a firm pledge. Under my plan, no family making less than $250 000 a year will see any form of tax increase. Not your income tax, not your payroll tax, not your capital gains taxes, not any of your taxes” (Barack Obama; http://www.youtube.com/ watch?v=Q8erePM8V5U). It would have been better for Americans to know the truth then. It is not financially possible



DIAZ

TABLE 1. Individual Mandate Excise Taxa Year 2014 2015 20161 a

FIGURE 1. Effect of Obamacare on the average health spending for a family of 4 between 2014 and 2022.

for the United States to add 40 million uninsured people to the health insurance system without making a significant contribution to offset the $1.6 trillion needed to make the promise a reality.10 The Congressional Budget Office estimated that the cost to cover for the additional 45 million uninsured would be $1.6 trillion: $1.02 trillion to be used for subsidies and $642 billion to expand Medicaid.1,4,8 To offset the increased cost incurred by the addition of these new uninsured individuals, the Obama administration decided on a structure that would allow the poor to be supported by the rich, a redistribution of wealth. The Brookins Institute reported that the only group to benefit from Obamacare is the bottom 20% of the US population: “Now, it appears that Obamacare may be mostly just another income redistribution scheme where the only winners are the poor.”4,8 New taxes were required to provide the funds to cover these new and necessary expenses. The most important tax was imposed on Medicare. The Congressional Budget Office estimates that over the next 10 years Medicare expenses will be reduced by $716 billion and the proceeds contributed to Obamacare. Twenty-two other taxes were added to cover the remaining $569 billion needed for the plan.4,10 The 22 new taxes created to fund Obamacare extend to nearly all Americans.10 The taxes that are most significant include the following: • A 3.8% surtax on investment income for households making .$250 000 annually. That includes annuities, royalties, net rents, and passive income in partnerships. • Medicare payroll tax increase of 0.9%. • Individual Mandate Excise Tax for those not purchasing qualifying insurance under Obamacare plans, the greater of either a percentage of adjusted gross income or a defined amount (Table 1).


1 Adult

2 Adults

$3 Adults

1% AGI/$95 2% AGI/$325 2.5% AGI/$695

1% AGI/$190 2% AGI/$650 2.5% AGI/$1390

1% AGI/$285 2% AGI/$975 2.5% AGI/$2085

AGI, adjusted gross income.

• Employer Mandate Excise Tax: For employers with $50 employees not offering qualified Obamacare plans, a surtax of $2000 per employee. If an employee is awarded subsidies through an exchange, the employer must pay a $3000 penalty per employee. • Cadillac Plan Excise Tax: 40% tax on plans with benefits . $11 500 single/$29 450 family. • Medical Device Manufacturer Excise Tax: 2.3% on gross manufacturer revenue. • Innovator Drug Company Tax: $2.3 billion annual tax on the industry relative to share of sales made that year. • Restriction on tax deduction for high medical expenses from 7.5% to 10% of adjusted gross income. Affects anyone with costly serious illnesses. • Insurance companies must pay 3.5% fee to participate in the Healthcare Exchanges. • Penalty imposed on Health Savings Accounts for early withdrawal of funds increased from 10% to 20%. • Reduction of Flexible Spending Account contributions from unlimited to $2500 annual contribution. Affects mostly families with children with special needs. • Health Savings Accounts and Flexible Spending Accounts no longer to be used to purchase nonprescription drugs. • The Internal Revenue Service will be able to arbitrarily eliminate a tax deduction that (in its opinion) “lacks substance” and seems to be solely intended to allow a tax deduction. President Obama promised that the taxes would be applied to the wealthy segment of the population who can afford it. In reality, the taxes outlined above, in addition to the other taxes, actually affect 92% of the population. A report presented by CNBC indicates that the most significant taxes are applied to individuals with an annual income .$200 000, but in reality, nearly every American citizen pays toward the support of Obamacare in one or another aspect4,8,10 (Table 2). The Individual Mandate for young individuals 27 to 40 years of age will likely result in young people preferring to go without insurance because the penalty at tax time is substantially less than the actual cost of insurance or the copay that they would have to make at the time of service, especially now that they can always get insurance when they need it without the risk of being denied.4,8,10,13 The growth in taxes applicable to the “affluent” portion of the US population will carry with it serious financial implications. The employer mandate will result in the reduction of full-time




TABLE 2. Projected Annual Average Tax Increase for Different US Annual Incomes Annual Income, $

Tax Increase, $

20 000-30 000 30 000-40 000 40 000-50 000 50 000-75 000 75 000-100 000 100 000-200 000 200 000-500 000 500 000-1 million .1 million

297 445 579 822 1206 1784 2711 14 812 170 341

employees hired and in the total number of employees in most medium-sized businesses not to exceed 50 to limit the tax exposure of the business. Businesses with .50 employees will probably choose to pay the $2000 per employee penalty over the payment of the health insurance plan and not offer to cover any of their full-time employees. Home Depot Inc and Trader Joe’s Corp have already withdrawn coverage for their part-time employees as a result of Obamacare. For Home Depot alone, that represents 20 000 individuals losing employer-provided health care.14 Reductions in the labor force have occurred as a result of the ACA. The tax on medical devices has resulted in a loss of 30 000 jobs because corporations are obligated to their shareholders to make a profit. Reducing employment and expenses is a quick avenue to maintain profitability with relatively little loss in productivity.13,14

IMPLEMENTATION OF THE ACA To fulfill the original Obamacare concern to provide health insurance to the 45 million uninsured US citizens and legal residents, the Obama administration, under the direction of Kathleen Sebellius, implemented the establishment of State Healthcare Exchanges.3,4,8 Approximately 36 states refused to implement State Healthcare Exchanges, and the federal government assumed the implementation of those exchanges under the supervision of the Secretary of Health for the United States.1 To make the process successful, the Department of Health contracted with CGI, a Canadian computer company directed by a personal friend and classmate of Michelle Obama.15 CGI received compensation for various areas of the implementation of the ACA totaling $510 million. In addition, CGI received a 5year contract for information technology security from the Department of Homeland Security for $11 billion in April 2013. The computer program designed and implemented by CGI for the Healthcare Exchanges was supposed to allow multiple individuals to log on and register simultaneously on the site, to review the various options available to them for programs under Obamacare, to determine whether they were


eligible for subsidies on the basis of their citizenship and income status, to sign up for the program of their choice, and to pay for the plan they selected. The system was never widely tested before its release and implementation, had serious access flaws, and was difficult to use as a result of frequent crashes, extended periods of delay while the pages loaded, repeated error messages, etc.4,11,15 The Daily Signal reported that of the 6.3 million people they could verify who had enrolled and paid for Obamacare in 2014, 3.8 million of them had previously had health insurance in 2013 but lost it as a result of the implementation of the ACA. That leaves a net gain of new enrollees who paid for insurance at 2.5 million paying customers.16 This is a far cry from the laudatory comments on the success of the ACA made by Pellosi at the end of 2014, when she reported to the House that the plan had fully enrolled 8.5 million new enrollees. No distinction was made in the number of previously insured Americans joining Obamacare, new enrollees previously uninsured, and new Medicaid enrollees.16 The McKinsey Corp conducted a survey of users in March 2013 (Figure 2) that identified that the majority of people who signed on to the site and chose not to enroll did so because they did not understand the cost of insurance would be subsidized, they had technical difficulties working through the site, they could not identify any plan that would cover their family needs because all the plans are identical, or they simply could not understand the Web site.12 The Obama administration estimated that for the ACA to be solvent, it would be necessary to enroll in the private insurance portion of Obamacare a minimum of 40% of the total population with individuals 18 to 34 years of age. Enrolling young individuals in the plan would provide a healthy pool of people who would most likely not need to use healthcare services, and the value of their contribution to the plan would subsidize the expenses incurred by older adults with greater medical needs.1,4,8,9 By December 2014, there were 8 538 237 individuals enrolled in Obamacare, but 71% of them were enrolled in Medicaid.16 The total number of the 18- to 34-year-olds enrolled in Obamacare by the end of 2014 was only 28%, not the required 40% projected by the Obama Administration.11,17,18 An essential premise of implementation of the ACA is the appropriate selection of those who qualify for assistance for the private insurance option or for Medicaid. Kathleen Sebellius was responsible for setting up the computer system to be used to enroll all Americans who wished or were required to participate in Obamacare. To qualify for assistance under either method, individuals had to prove that they were citizens or legal US residents, had the appropriate financial requirement under 400% of the poverty level, and had Social Security numbers that matched their requests. The failure of the system to operate appropriately and the lack of sufficient personnel to verify the accuracy of the entries required the Obama administration to allow the individual to “self-authenticate” the information required. In audits conducted by the Department of Health and Human Services (HHS) during the first 5 months of enrollment, it was noted that



DIAZ

FIGURE 2. Leading reasons for not enrolling in Obamacare through the Healthcare Exchanges.

there were 2.9 million inconsistencies in the data. There were 1.3 million problems involving verification of citizenship. HHS was unable to correct 2.6 million of those discrepancies because the “eligibility system was not fully operational.”19 The Government Accountability Office set up as part of its required duties an investigation to test the efficacy of the procedures established by HHS to ensure that the subsidies extended at the Healthcare Exchanges were given to individuals who were US citizens, were legal US residents, had an identifiable Social Security number, and fit in the financial categories required for Medicaid (up to 133% of the federal poverty line) or for the private insurance plan (up to 400% of the federal poverty line). The undercover investigators were able to secure subsidies using fake names and Social Security numbers or falsely claiming US citizenship or legal residence and were granted subsidies in 11 of 18 attempts.19 Kathleen Sebellius eventually resigned her post as the secretary of the HSS after the failed release of the Obamacare exchanges.20

TRANSPARENCY OF THE ACA Purchase of health insurance through the exchanges was intended to allow previously uninsured Americans to gain health insurance at a reasonable cost. The McKinsey Corp reported that, near the end of the enrollment period in March 2014, 3.3 million


Americans had signed up for the Healthcare Exchanges, only 500 000 (27%) had previously been uninsured, and only 50% of them paid their premium, in contrast to 86% payment by those who had been previously insured. Therefore, only 14% of the total number of individuals signing on to Obamacare were actually a net increase in the entire group of 3.3 million Americans, approximately 472 000 people as of February 1, 2014.21 The main purpose of Obamacare was to increase availability of health care to the uninsured in the United States. The data provided in Figure 3 came from a private survey conducted by the McKinsey Corp and do not represent official data. When Garry Cohen, the main implementer of Obamacare, was asked during a conference call with the HHS what the official number of uninsured who had gained health insurance through Obamacare was, he replied “That’s not a data point that we are really collecting in any sort of systematic way.”16 Transparency in a transaction requires full disclosure of the facts by both parties. Nobody told the American consumer that one of the ways to finance Obamacare would be to increase the premium cost and to increase the copays. The Obama administration may claim that the health insurance companies imposed the changes in the cost of the insurance premiums and the cost of the copays. However, the reality is that those planning on Obamacare should have anticipated the change. The cost of healthcare insurance increased when the insurance companies were required to cover all individuals, no matter what their pre-existing conditions were.




FIGURE 3. Break down of the population who selected a plan through the Healthcare Exchanges, were previously insured or not, and paid for the plan compared with those who did not pay.

The cost of that increase was uniformly spread to all individuals purchasing insurance. Before Obamacare, health insurance could be purchased in the public space with deductibles (copays) to the participant that were on average per individual coverage in employer-sponsored plans $1217 for 2014. In contrast, the average Bronze plan copay is $5081 for a single person or $10 386 for a family of 4. The most commonly selected plan was the Silver plan. Deductibles for that plan were $2907 for a single individual and $6078 for a family of 4.22 The Obama administration has made it simple to renew the health insurance plan purchased through the exchanges without any participation of those who already enrolled. Every year, the plan is to renew itself if the individual does not do anything to opt out. This obviously allows the numbers of those enrolled to gradually continue to increase and makes the process simpler for those who already entered the plan. Not apparent on the surface is the fact that the re-enrollment comes along with the added cost of the new plan for the year of renewal. The person who is re-enrolled will be unaware of the actual cost to him or her until tax time, when the cost will be part of the income tax form. Furthermore, because the cost of the plan will change, the copay will increase along with the change, and the sticker price will become apparent to those who use the plan when they seek medical care and the provider delivers the bad news. As back-door belated repair to prevent the


surprise change in the re-enrollment process, HHS proposed a mechanism to allow people to switch to a different plan at the time of re-enrollment. The decreased cost of the new plan may be linked to a higher copay or to a drastic change in the doctors and hospitals that participate in the plan.4,13,23 President Obama gained considerable support for the passage of Obamacare through his support from the unions. Congress passed the Cadillac Tax on high-value employer health plans “by mislabeling it, calling it a tax on insurance plans rather than a tax on people, when we know it is a tax on people who hold these insurance plans.”24 Americans would oppose a tax on individuals, so “We just tax the insurance companies; they pass on the higher prices. . .[I]t ends up being the same thing.” This was “a very clever. . .basic exploitation of the lack of economic understanding of the American voter.”24 The Cadillac Tax went unnoticed by the unions until they realized that they would be losing their privileged health insurance benefits or paying a 40% tax to keep them. At that point, President Obama postponed implementation of the Cadillac Tax until after he left office in 2018. Unite Here, a union of healthcare workers, is expecting a drop of $2 to $5 per hour in total compensation resulting from the implementation of Obamacare. That reduction in pay comes from the increase in healthcare premiums that union members will have to pay after full implementation of Obamacare.25



DIAZ

The ACA was set up to allow individual states to set their own Healthcare Exchanges, funded by the federal government. The law required that those states that were unable to successfully set up their exchanges would have to refund the federal government the money given to them for that purpose. Four states—Maryland, Massachusetts, Nevada, and Oregon—received and spent $474 million to accomplish the task. According to US Senator Barrosso,26 the Healthcare Exchange Programs they set up are “now in shambles,” and they want more money to fix them.

PRESIDENT OBAMA’S UNFULFILLED PROMISES OF THE ACA President Obama made repeated promises to the American public, including: “If you like your doctor, you can keep your doctor,” “If you like your hospital, you can keep your hospital,” and “If you like your health plan, you can keep your health plan.” Furthermore, he promised that the cost of health care in the United States will decrease, taxes to sustain Obamacare will be applicable only to the rich, Cadillac plans held by the unions will not be affected, Medicare will not suffer as a result of Obamacare, etc.22,27,28 The main premise of the ACA was to gain universal healthcare coverage for US citizens and legal immigrants. However, the Congressional Budget Office reported in 2014 that it is very probable that .31 million Americans will still lack health

insurance coverage by 2024.10,27 Additionally, the Congressional Budget Office reported that the expected 37.5% reduction in the total number of uninsured (lowered from the original 59.3%) planned for March 2014 in reality had only reached 12.5% (Figure 4). The inability to reach the threshold reduction projected originally was attributed to the Supreme Court ruling that allowed states to not participate in the expansion of Medicaid that was originally planned to be mandatory.10,22,27,29 Because Obamacare adds $1.2 trillion to the national deficit, $8000 of additional expenses per insured individual subsidized by the government, it becomes economically not feasible to fully insure 45 million uninsured Americans. It is estimated that by 2024 there will be 31 million uninsured Americans in the United States.27,30 Insurance companies, hospitals, and physicians are trying to find the best fit to accommodate the requirements of Obamacare. Insurance companies are selecting the areas and the plans that align with their financial interests and that will allow them to make the most profit with their engagement with the ACA. Hospitals and physicians are being selected to participate in the ACA plans in groups or plans that they can commit to serve within the restrictions imposed by the plan, including the financial constraints and the multiple portions of the mandate that have to be completed by them to receive payment. This set of requirements will result in significant changes in the availability of health insurance groups, hospitals, and physicians to patients who previously depended on them. Cost is forcing many academic medical centers not to be included in the

FIGURE 4. Actual reduction of uninsured Americans for 2014 resulting from the implementation of Obamacare. CBO, Congressional Budget Office.





group of providers available to Obamacare recipients because academic institutions are generally more costly in their delivery of care. Many physicians are part of large groups, and some of the groups may or may not be selected by the insurance companies as providers and will be excluded from the plans. It is therefore very likely that the insurance companies, hospitals, and physicians that patients were particularly content with will no longer be available to them.1,28 US Senator Tom Coburn found out that his new Obamacare health plan that he had to sign up for did not include his cancer doctors in the plan.28 Obamacare implementation requires that everyone be covered with the essential benefits previously discussed. Many plans were considered marginal by the Obama administration, and did not include many of what Americans considered unneeded benefits to fit their needs. These plans were determined by the Obama administration as “not in compliance” and therefore were terminated. This section of the law affected large corporations, small corporations, and individuals insured on their own. McDonald’s Corp and Jack in the Box, among many other companies of all sizes, provided “mini med plans” to their part-time and full-time employees that did not meet the Obamacare minimum health insurance requirements and were therefore canceled.28,31,32 “Without waivers, companies would have had to provide a minimum of $750 000 in coverage next year, increasing to $1.25 million in 2012, $2 million in 2013, and unlimited in 2014.”32 A groundswell of discontent motivated the potential loss of health insurance for nearly 1 million Americans just before the 2010 elections. This motivated the Obama administration to establish a waiver for McDonald’s employees, and many others, to not comply with the stringent regulations.32 Small corporations and individual insurers were not so lucky. Nearly 6 million individuals who fit in this group of the population lost their health insurance in 2013. Many angry letters and phone calls were generated to individual congressmen and senators, which led to a temporary waiver of the law until 2018, to allow those affected to obtain health insurance that meets the requirements of Obamacare.11,21,27 The established basic minimum requirements for health insurance coverage in Obamacare1,33 did not match those in existence in some of the previous health insurance plans in place and resulted in the cancellation of .5 million health insurance policies in 2013.31,34 These people lost the health insurance they liked in spite of the president’s promise. The cancellation of policies led to a large number of complaints directed to US Congressional Representatives and US Senators. Corrective action was prompted through the US House of Representatives and resulted in a bipartisan vote (261-157) in support of the reversal of the cancellation of these policies. President Obama recognized the problem and took blame for the confusion.31 A moratorium on acquiring new insurance was given to those individuals who lost their coverage under this conflict, and they were allowed to extend their existing health insurance, without change, until 2018.13,23,27 Funding for the ACA was to be done without affecting the large majority of Americans, to be paid for by the “affluent” through taxes affecting only the rich and by streamlining unreasonable


expenses from Medicare. No net additional cost was to occur. As noted above, nearly 90% of Americans will pay for Obamacare through various taxes. Medicare services will be reduced and will affect all those individuals covered by the plan. The Brookings Institute has estimated that the true savings effected as a result of the ACA will improve the income of Americans in the bottom 2 deciles of the US population (Figure 5).35 The sequence of unfulfilled promises and expectations begs the question of whether these were simply the result of happenstance or may have been part of a more complex arrangement. Jonathan Gruber is considered one of the main architects of Obamacare. He was paid $400 000 by the Obama administration for his participation in the development of the plan and for his advice to the president, in particular how to structure the Individual Mandate. Gruber declared in multiple recorded interviews that deception was essential to the passage of the ACA.24,36 In a pointed remark, Gruber said that the Individual Mandate was in reality a tax, the Obama administration knew it was a tax, but the administration could not present it to the public as a tax because it would not be accepted. Therefore, the Individual Mandate section of the bill “was written in a tortured way to make sure [the Congressional Budget Office] did not score the mandate as taxes.” In the video, he added: “The lack of transparency is a huge political advantage” and “the stupidity of the American voter. . . was really, really critical for the thing to pass.”24

ALTERNATIVES TO DEAL WITH THE EFFECTS OF THE ACA The US public has become disenchanted with the potential benefits that the ACA offered originally, and now the support for Obamacare has dropped to an overall approval rate of 38% in the nation as a whole. Regionally, the approval rate is even lower. In Arkansas, the approval rate is 29%; in Louisiana and New Hampshire, 34% and 37% of the population, respectively, approve of the ACA law.23,27 As a result of the many problems brought about by Obamacare, possible alternatives are being discussed. The most significant alternative being considered by the Republican-dominated US Congress is to repeal the entire ACA law or to revamp sections of Obamacare. Because the ACA is the crowning achievement of President Obama and he is still the US president, it is likely that he would veto any legislation passed by the US Congress that intends to repeal the entire ACA law. It is therefore more likely that modifications made to Obamacare will succeed and be signed by the president. An example of possible modifications that may be acceptable to the president include rescinding the excise tax on medical manufacturers of drugs and instrument devices implemented in 2014 or allowing greater local state control for the Medicaid programs to fit their means and needs.23 Healthcare insurance is currently sold only in individual states; no nationally available insurance company is allowed to sell insurance plans across state lines.8 Allowing various companies to compete across state lines would increase competition and



DIAZ

FIGURE 5. The Affordable Care Act improves incomes only in the bottom 2/10s of the American population.

decrease costs to the insurance companies and would allow individuals purchasing the insurance plans to have greater flexibility in purchasing health insurance.8,11 The costs of the Individual Mandates at a state level would be reduced by a nationally averaged health insurance premium.11 A significant problem in the implementation of the delivery of health care in the United States is the limited interest in the individual consumer to reduce the use of services. Health Savings Accounts provide a vehicle that is purchased and funded by the individual and could be used to control the expenses of the use of healthcare services. Obamacare reduced the contribution to Health Savings Accounts to $2500 annually. A significant benefit of the use of Health Savings Accounts would be to make all Health Savings Account contributions tax deductible and would encourage the user to make careful and limited choices. A similar alternative would be to make all health insurance purchases pretax benefits to the individual as they are for any corporation purchasing the benefit on behalf of its employees. The Congressional Budget Office estimates that the cost of health insurance currently secured for the uninsured under Obamacare is $8000 per person.37,38 Because there will likely be only 14 million previously uninsured people gaining insurance under the ACA by 2024, it would be cheaper for the government to purchase insurance strictly for them, without disrupting the entire healthcare industry in the United States. Most of the taxes levied on the American public would not be necessary, and the overall satisfaction level across the public would increase because


we are doing something good to help those who are less fortunate but we are not harming everyone else in the process. Healthcare expenses are significant for people with catastrophic injuries or illness and frequently present in the elderly.39 Developing a high-risk catastrophic insurance pool through state-funded and federally supported programs would achieve the purpose of securing care for these individuals without requiring the insurance companies to raise the cost of insurance for the entire industry to pay for the cost of these patients.4,8,26

CONCLUSION The ACA is the most sweeping healthcare reform legislation affecting every individual in the United States in the last century. The primary purpose of the act is to provide access to affordable health insurance to the 40 million uninsured Americans. In addition, the ACA law intends to make health insurance more affordable to those who already have health insurance, to establish a minimal set of health insurance policy standards available to all, to provide access to all individuals regardless of whether they have pre-existing conditions affecting their health, to establish a mandate for individuals or employers requiring everyone to have healthcare coverage for legal US residents, to provide government subsidies for those individuals who have insufficient means to pay for themselves up to 400% of the poverty level, to establish state or federal exchanges through which subsidies could be distributed to those in need, to require the




wealthiest Americans to pay for the support of the subsidies, and to expand the eligibility levels for Medicaid. The law was expected to cost a total of $1.4 trillion dollars. The majority of these goals have not been met, have failed to be implemented, or will never be achieved without substantial restructuring. The current strong disapproval of the law by the majority of the US population indicates that significant revisions or a total repeal of the ACA law would be appropriate and well received by the American public. Disclosure The author has no personal, financial, or institutional interest in any of the drugs, materials, or devices described in this article.

REFERENCES 1. Congressional Research Service. Congressional Research Service Report for Congress: ACA: A Brief Overview of the Law, Implementation, and Legal Challenges. Available at: http://www.himss.org/files/HIMSSorg/policy/d/2012CRSReptACAABriefOverview oftheLawImplementationandLegalChallenges.pdf. Accessed January 13, 2013. 2. Roff P. Pelosi: Pass Health Reform so You can Find out What’s in it. Available at: http://www.usnews.com/opinion/blogs/peter-roff/2010/03/09/pelosi-pass-healthreform-so-you-can-find-out-whats-in-it. Accessed March 9, 2010. 3. Hartsfield T, Turner GM. 47 Changes to Obamacare, so far. Available at: http:// www.galen.org/newsletters/changes-to-obamacare-so-far/. Accessed January 2, 2015. 4. Mc Caughey B. Beating Obamacare 2014: Avoid the Landmines and Protect Your Health, Income, and Freedom. New York, NY: Regnery Publishing Inc; 2014. 5. Congressional Budget Office. Letter to the Honorable John Boehner. Available at: http://www.cbo.gov/publications/43471. Accessed July 24, 2012. 6. Wenberg JE, Brownlee S, Fisher ES, Skinner JS, Weinstein JN. Improving Quality and Curbing Health Care Spending. Lebanon, NH: Dartmouth Atlas of Health Care; 2008. 7. Romley JA, et al. Hospital spending and inpatient mortality: evidence from California: an observational study. Ann Intern Med. 2011;154:160-167. 8. Irons M. Surviving Obamacare: Money Saving Solutions for Today’s Health Care Crisis. Phoenix, AZ: M.I. Publishing. ISBN-13: 978–0615798790. 9. CMS Report: National Health Expenditure Projections 2012-2012: Forecast Summary. Available at: http://www.cms.gov/Research-Statistics-Data-and-Systems/StatisticsTrends-and-Reports/NationalHealthExpendData/Downloads/Proj2012.pdf. Accessed January 13, 2013. 10. Duncan J. Full list of Obamacare tax hikes: listed by size of tax hike. Available at: http://jeffduncan.house.gov/full-list-obamacare-tax-hikes. Accessed September 15, 2013. 11. Pipes S. Four years of Obamacare failures is long enough. Available at: http://www. forbes.com/sites/sallypipes/2014/03/24/four-years-of-obamacare-failures-is-longenough/. Accessed September 15, 2013. 12. Ruthrauff A. Forbes contributor attempts math, finds that Obamacare will steal $7450 from “typical family of four.” Available at: http://wonkette.com/529563/ forbes-contributor-attempts-math-finds-that-obamacare-will-steal-7450-from-typicalfamily-of-four#dXsvXEUwikPRtlxI.99. Accessed September 15, 2013. 13. Baker S. No easy fix for one of Obamacare’s hardest problems health and human services has some ideas for dealing with rate shock, but they have their own risks. Available at: http://www.nationaljournal.com/health-care/no-easy-fix-for-one-ofobamacare-s-hardest-problems-20141121. Accessed November 31, 2014. 14. Johnson A. 100 Unintended consequences of Obamacare. Available at: http:// www.nationalreview.com/article/359861/100-unintended-consequences-obamacareandrew-johnson. Accessed October 30, 2014. 15. Hickey JG. Obamacare website company had ties to Obama fundraising, Michelle Obama. Available at: http://www.newsmax.com/Newsfront/cgi-federal-scrutinyobama-fundraising/2013/10/27/id/533310/. Accessed October 30, 2014. 16. Hayward J. ObamaCare: failure at any price. Available at: http://www.redstate. com/2014/10/22/obamacare-failure-price/. Accessed October 30, 2014. 17. ASPE Issue Brief: HEALTH INSURANCE MARKETPLACE: Summary Enrollment Report for the Initial Annual Open Enrollment Period. Available at: http://aspe.hhs. gov/health/reports/2014/MarketPlaceEnrollment/Apr2014/ib_2014Apr_enrollment. pdf. Accessed May 1, 2014.


18. Walsh K. Obamacare by the numbers. Available at: http://www.usnews.com/news/ articles/2014/05/27/obamacare-enrollees-by-the-numbers. Accessed May 30, 2014. 19. Malcolm A. Government audits reveal vast ObamaCare failures. Available at: http:// news.investors.com/ibd-editorials-obama-care/070114-707080-government-auditsfind-huge-obamacare-failures-.htm. Accessed July 30, 2014. 20. Kenen J. Kathleen Sebelius resigns as HHS Secretary. Available at: http://www. politico.com/story/2014/04/kathleen-sebelius-resigns-105600.html. Accessed May 30, 2014. 21. Roy A. McKinsey: Only 14% of Obamacare exchange sign-ups are previously uninsured enrollees. Available at: http://www.forbes.com/sites/theapothecary/2014/ 03/08/mckinsey-only-14-of-obamacare-exchange-sign-ups-are-previously-uninsuredenrollees/. Accessed April 1, 2014. 22. Obamacare Facts. ObamaCare: pros and cons of ObamaCare. Available at: http:// obamacarefacts.com/obamacare-pros-and-cons/. Accessed April 1, 2014. 23. Leonard K. Obamacare’s role in the election: Americans remain skeptical about the health law, which will affect how they cast their votes on Election Day. Available at: http://www.usnews.com/news/articles/2014/11/03/obamacare-among-issuesvoters-are-unhappy-about. Accessed November 30, 2014. 24. Thiessen M. Thanks to Jonathan Gruber for revealing Obamacare deception. Available at: http://www.washingtonpost.com/opinions/marc-thiessen-thanks-tojonathan-gruber-for-revealing-obamacare-deception/2014/11/17/356514b2-6e7211e4-893f-86bd390a3340_story.html. Accessed December 15, 2014. 25. Dorfman J. Obamacare disappointment reaches union ranks. Available at: http:// www.forbes.com/sites/jeffreydorfman/2014/03/13/obamacare-disappointmentreaches-union-ranks/. Accessed April 1, 2014. 26. Barrosso J. Taxpayers tired of picking up tab for Obamacare failures. Available at: http://www.rpc.senate.gov/chairmans-view/barrasso-taxpayers-tired-of-picking-uptab-for-obamacare-failures. Accessed July 30, 2014. 27. Hurtubise S. Years of Obamacare problems are still on the way. Available at: http://dailycaller.com/2014/11/18/years-of-obamacare-problems-are-still-on-the-way/. Accessed November 20, 2014. 28. Dorfman J. Get ready for the real Obamacare disasters as people start to use it. Available at: http://www.forbes.com/sites/jeffreydorfman/2014/04/05/get-readyfor-the-real-obamacare-disasters-as-people-start-to-use-it/. Accessed May 1, 2014. 29. Connover C. How well is Obamacare covering the uninsured? A glass half empty moment. Available at: http://www.forbes.com/sites/theapothecary/ 2014/04/01/how-well-is-obamacare-covering-the-uninsured-a-glass-half-emptymoment/. Accessed April 30, 2014. 30. Conover C. Obamacare will increase health spending by $7450 for a typical family of four. Available at: http://www.forbes.com/sites/theapothecary/2013/09/23/ its-official-obamacare-will-increase-health-spending-by-7450-for-a-typical-familyof-four/. Accessed September 20, 2013. 31. Fram A. GOP sees Obamacare problems as big 2014 opportunity. Available at: http://www.huffingtonpost.com/2013/11/16/gop-obamacare-2014_n_4287170. html. Accessed November 30, 2013. 32. Armstrong D. McDonald’s, 29 other firms get health care coverage waivers. Available at: http://usatoday30.usatoday.com/money/industries/health/2010-1007-healthlaw07_ST_N.htm. Accessed October 30, 2010. 33. Internal Revenue Service. Patient Protection and Affordable Care Act: preexisting condition exclusions, lifetime and annual limits, rescissions, and patient protections. Fed Regist. 2010;75(123):37188. 34. Internal Revenue Service. Shared responsibility payment for not maintaining minimum essential coverage. Fed Regist. 2013;78(169):53646. 35. Aaron HJ, Burtles G. Potential effects of the affordable care act on income inequality. Available at: http://www.brookings.edu/research/papers/2014/01/potential-effectsaffordable-care-act-income-inequality-aaron-burtless. Accessed January 30, 2014. 36. Hall W. A Civil War has opened up inside the Democratic Party over Obamacare. Available at: http://www.breitbart.com/Big-Government/2014/12/07/Civil-WarErupting-Among-Democrats-Over-Obamacare. Accessed December 15, 2014. 37. Hayward J. ObamaCare’s ultimate failure: the uninsured aren’t buying. Available at: http://humanevents.com/2014/03/07/obamacares-ultimate-failure-the-uninsuredarent-buying/. Accessed April 1, 2014. 38. Ehley B. Obamacare could face large numbers of dropouts. Available at: http:// www.thefiscaltimes.com/2014/11/03/Obamacare-Could-Face-Large-NumbersDropouts. Accessed November 30, 2014. 39. Canto S. Let’s add Obamacare to the list of problems. Available at: http://www. americanthinker.com/blog/2014/10/lets_add_obamacare_to_the_list_of_problems. html#ixzz3LFbrA5Am. Accessed November 30, 2014.



How will pot legalization affect medical marijuana?

Editorial: How long should you wait?

Editorial: How do you do, Mrs. Jones?

How IMF's loan freeze will affect health care in Malawi.

How will the next accreditation system affect ophthalmology residency training?

How will the single European market affect health care?

Will you won't you join the dance?

It Will Happen to You.

Seek and you will find.

Gerontology: Will you still need me, will you still feed me?

Editorial: Thank you.

How well will you FIT? Use of a modified MMI to assess applicants' compatibility with an emergency medicine residency program.

Overexpression of Efflux Pump in Multiresistant Pseudomonas aeruginosa: How You Will Discover and Treat It?

Editorial: Will the lung have an endocrine function?

Predicting What Will Happen When You Intervene.

You may delay, but time will not!

Reply: Seek and you will find.

I Will Forgive You--This Time.

How will DSM-5 affect autism diagnosis? A systematic literature review and meta-analysis.

Elucidating the genomic landscape of breast cancer: how will this affect treatment?

How will surface treatments affect the translucency of porcelain laminate veneers?

How Will Climate Warming Affect Non-Native Pumpkinseed Lepomis gibbosus Populations in the U.K.?

How does this make you feel? A comparison of four affect induction procedures.

How Would You Manage?