Froma Harrop: Obamacare should be less complex

Froma Harrop

Froma Harrop

Let’s start on an upbeat. Next to what we had before, Obamacare has been a spectacular success. The Affordable Care Act has brought medical security to millions of previously uninsured Americans and has helped slow the rise in health care spending.

But the health reforms would have been more spectacular had they been simpler to follow and understand. Complexity is their big flaw. It was the product of politicians’ cutting so many private interests into the deal — and the fear of radically changing a system of health coverage largely based on employment.

Thus, many Americans who received tax credits to buy coverage on the health insurance exchanges now must calculate whether they overestimated or underestimated their 2014 income in determining their subsidy.

If they made more than they expected, they must repay some of the money. This is probably a small price to pay for subsidized coverage, especially if one has an expensive medical condition, but it is an added headache at tax time.

Others are finding that they earned less than they thought they would in the year. They can expect a refund. A nicer surprise, for sure, but still, figuring these things out is a chore.

There’s another group that ignored the requirement to obtain coverage. This year, those folks are facing a tax penalty of $95 or 1 percent of their income, whichever number is higher. That penalty will rise with the years. Many can obtain an exemption from this fine but must apply for it.

Some refused on political grounds; they objected to being forced to buy coverage. Others were unaware of the mandate. And many people just couldn’t wrap their brains around the concept of exchanges and the choices they offered.

Bringing the entire population into the insurance risk pool is essential to any health reform, and a mandate to buy coverage is one way to get there. But that puts a burden on a lot of ordinary folk, each trying to work out his or her situation.

Medicare brings everyone 65 or older into the program by simply enrolling them. Hospital coverage is automatic. Those wanting coverage for visits to the doctor can pay extra. If they want coverage for drugs, they can buy a drug plan. Or they can sign up with a Medicare Advantage plan that does all or most of the above.

Medicare does offer subsidies to some low-income people, but they are relatively simple. The program is funded by payroll taxes, premiums and the Treasury. No one needs an accountant to figure what one gets or pays.

There’s much waste in Medicare. It must be addressed. But the program does curb spending through its low administration costs and by setting a price on each service.

It’s no small irony that some of Obamacare’s leading critics want to make Medicare more like Obamacare. A leading Republican budgeteer, Rep. Paul Ryan, proposes a system whereby the elderly would receive vouchers to buy coverage from a private insurer on … a health insurance exchange.

Gone would be the guaranteed benefits. Patients of modest means wanting choice of doctor might have to settle for plans with limited provider networks. Those who object would have to fight it out with the insurer. The Ryan plan would give insurers more freedom to determine the benefits offered by their plans. Companies could then tailor their offerings to attract the healthy — and therefore cheaper — enrollees and avoid the sickly.

Would some leader in Washington start the wheels turning to bring all Americans into the promised land of Medicare as we now know it? And don’t repeal Obamacare. Mend it and bend it to fit into Medicare.


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