Obamacare & the Uninsured

by Nancy Osborne, COO of ERATE®

(5/11/2012) Recent studies reflect that one out of four Americans of working age went without health insurance at some point in 2011. That means almost 48 million adults or 26% of the population aged 19 to 64 went uninsured. Without the protection of health insurance people quickly begin to postpone or avoid basic medical services and as a result non-emergency care and treatment have seen a rapid decline.

The Patient Protection and Affordable Care Act (aka Obamacare) seeks to cover those who are uninsured by extending insurance coverage to millions of Americans currently without insurance protection by 2014. This objective is proposed to be accomplished either through the expansion of the Medicaid program to the poor or through subsidized state insurance markets referred to as healthcare exchanges.

Many employers frequently site the high cost of providing health coverage as a primary factor in their resistance to hire new employees. The cost of covering a family has doubled since 2001, climbing much faster than the overall rate of inflation, converting the crisis from not only a health related dilemma but into an economic one as well. The jobs killing component of the issue elevates the problem to front and center of the current economic recovery. Controlling healthcare costs, in addition to providing insurance, becomes of critical importance when employee wages have remained essentially flat.

Healthcare insurers raised premiums preemptively last year in response to new regulation coming into play in 2012 which forces the insurance companies to justify rate increases in excess of 10% and requires them to use 80% of premiums collected directly for medical care and requires funds collected in excess to be refunded to their policyholders or consumers.

Though much remains to be done to control costs by healthcare providers and Americans themselves must move quickly to control costs though much needed prevention by changing their notoriously unhealthy habits, this is a launching point for a discussion of a complex problem which is going to require a complex solution. The convergence of problems brought forward by the economic crisis should be viewed as an opportunity to address a number of serious dilemmas which have plagued the medical and economic landscape. These dilemmas include Medicare reform, controlling the escalating costs of healthcare, finding ways to curtail insurance costs, perhaps by also examining tort reform (think malpractice insurance) and by helping Americans take some long overdue accountability for their own health by requiring those individuals with unhealthy habits to pay higher premiums, incentivizing people to get healthier in the process.