Here in the UK you only need to turn on your television to realise our National Health Service is riddled with problems – from lack of staff to lack of funding. Resources are stretched, people are being treated in hospital corridors and many believe the Government should hang their heads in shame.
However, few would swap this desperate situation for the pure pandemonium surrounding healthcare in the USA.
In the lead-up to his election as President of the USA, Donald Trump was clear in his outlook that Obamacare – or at least the bulk of it – must go. The claim among his Republican party was that it placed too many costs on businesses and was effectively an intrusion by the government into the affairs of individuals and businesses.
Now, however, a budget analysis suggests the proposed replacement could see an estimated 14 million people lose their insurance coverage. So what’s going on?
What was the problem with Obamacare?
The idea behind Obamacare, officially known as the Affordable Care Act, seemed noble enough – it was meant to bring health insurance cover to the bulk of the 15% of the US population that were thought to be without it. These are the people that are not covered by their employers and are not included in the programmes that exist for the elderly and poor.
In order to do this, it meant there would be subsidies to make health insurance cover more affordable with a law requiring all Americans to have health insurance. It also, however, required businesses with more than 50 employees to provide health insurance.
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In addition there were controversial elements such as state-run marketplaces – similar to the insurance comparison websites we have here – to allow people to compare prices.
There was also a ban on health insurance companies from having the right to deny cover to those with pre-existing conditions.
Republicans were vehemently against the law, however, believing that it places too many costs on businesses. It was labelled a job killer (though jobs in the sector rose 9% since its implementation) and an unnecessary interference.
In addition, the Supreme Court ruled in 2012 against a provision to change the administration of Medicaid – Obamacare was to see states expand the numbers covered by Medicaid (which is designed for the poor) with the idea that they, in turn, would get more funding. However, the Supreme Court ruled that states could make their own choice about whether to participate in this expansion or not – meaning that those who were meant to qualify for the expanded cover suddenly found themselves in a black hole, needing to pay for private insurance.
Furthermore, many insurers backed out of Obamacare because sign ups were lower than expected: which in turn pushed up insurance premiums. For some with middle incomes it was felt that the subsidies were not big enough and the fines for not participating were too small.
So what is the replacement?
In its place, the Republicans have proposed the American Health Care Act (AHCA) which bases tax credits mainly on age.
Young Americans are seen as the big beneficiaries with policyholders aged from 20-29 expected to save anything from $700-$4,000 a year. Policyholders under 30 who earn less than $215,000 a year will also stand to benefit from a refundable tax credit of as much as $2,000 towards their premiums. Meanwhile, the rich are also expected to be boosted with the lifting of two levies imposed by Obamacare – filers earning as much as $115,000 stand to benefit from a tax credit, compared to those earning up to $50,000 under Obamacare.
Older Americans however, are expected to pay more overall, despite receiving tax credits; while middle and lower income earners face higher premiums and lower tax credits. The additional funding for Medicaid will also be eliminated by 2020.
What does it all mean?
According to the Congressional Budget Office, 14 million will lose insurance coverage by 2018 – with the number of uninsured to rise to 24 million by 2026. Federal deficits meanwhile will be reduced by £275 billion during a 10-year period.
For Republicans, the boast will be about budget savings and reduced taxes – for Democrats, however, the act has been branded “appalling” and a “disaster” with fingers pointed at the pain awaiting the elderly and poor.
The odds of the AHCA actually being passed seem to be getting longer, with disgruntlement in the Republican camp too.
It’s clear that replacing Obamacare, for all of its perceived faults and once derided by so many, might just be the biggest challenge the new President faces.
Related stories:
24 million will lose insurance under AHCA-CBO
New AHCA will offer access to healthcare to every American enrolled in Obamacare – White House
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