Health Care Reform In Obama’s State of the Union Address

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Health Care Reform In Obama’s State of the Union Address

Editor’s Note: In President Obama’s State of the Union Address, he abstained from praising the success of the Affordable Care Act. He gave one offhand remark, that “18 million jobs people have gained coverage…health care inflation has slowed…and our businesses have created jobs every single month since it became law.”

The numbers back his claim, and the ACA has succeeded where many have speculated its failure. So why didn’t he, in his final address towards millions of Americans, praise his administration’s overhaul of the health care system?

Most likely because public approval for Obamacare has been divided, almost to a tee. Since Obamacare’s inception in 2010, nineteen states still have not expanded Medicare to its citizens. States like Kentucky plan to modify or even eliminate existing Medicare options.

We look at the polls and data and see a strong divide by partisanship. Politicians, mostly right-leaning ones, don’t like the idea of a government-controlled health care system, and they don’t like paying more for one. Until a health care system can be formulated that has bi-partisan appeal, millions of Americans will pay the price of politics, and millions will remain uninsured.

Read the full transcript of President Obama’s speech here.

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TL;DR

  • The Affordable Care Act (Obamacare) has largely been a success in health care reform: the rate of uninsured has decreased dramatically, and more Americans can afford health insurance than ever
  • The consequences of a concerted push towards universal healthcare will be an increased burden on the state and its taxpayers

The State of the Union Address

On January 12, President Barack Obama will deliver his final State of the Union Address to the American people. He will address one of the cornerstones of his Presidency, albeit the most controversial one: the signing of the Affordable Care Act (ACA), colloquially referred to as ObamaCare. The ACA was the most significant overhaul of the U.S healthcare system we’ve seen in ages, though its goals were straightforward: to decrease the rate of uninsured by increasing public and private coverage, and increase the affordability and quality of health insurance.

But has it worked?

Many point out that the ACA has several key flaws which make it an ineffective plan, while others look at the numbers to tell a different tale.

The Rate of Uninsured Has Decreased

The ACA increases the coverage rate among Americans in two ways: expanding Medicaid eligibility to lower-income households and creating state-based insurance exchanges. In a report by the CDC, the average number of uninsured during the period from January to September 2014 was 11.4 million less than the average in 2010. Additionally, Gallup states that the percentage of uninsured Americans decreased from 18% in 2013, to 11.4% in 2015.

Q2008-Q2015 Percentage of Americans Uninsured
Percentage of Americans Uninsured Over Time

The numbers don’t lie. More Americans have healthcare insurance than ever. There are however, a few caveats, as a substantial number of people will remain uninsured:

  • illegal immigrants
  • citizens eligible for Medicaid but not enrolled
  • citizens whose insurance rates are more than 8% percent of their annual income
  • citizens who simply choose to opt out
  • citizens whose states oppose Medicaid expansion

Health Care Is Cheaper for Americans

While the rate of uninsured in America has decreased, the rate that families receive subsidies is skewed depending on income level opposed to the federal poverty line (133%-400%). For example, those 133% above the poverty line pay a max annual premium of $992 for healthcare, while those at 400% pay a max of $8,379.

Federal Poverty Line vs. Rate of Premiums
Federal Poverty Line vs. Rate of Premiums

The cost increase is exponential and can be financially straining for those hovering a bit father above the poverty line. Additionally, those who are just above the 400% poverty line do not receive assistance from the federal government and are consequently hit the hardest

On the whole, however, more people are paying less than they did before. Several studies point out that half of those who buy insurance right now, predominately lower-income families, are eligible for subsidies, which is a success for the law. The ACA’s original intent was to help the lower-income families with subsidies, so it’s natural that they benefit the most.

Political Views Towards the ACA

One of the biggest detriments to the ACA is opposition within the government. Several states, namely those in Republican control, chose to reject Medicaid expansion—and over half of those uninsured live in those states.

What does this mean for those in states opposed to Medicaid expansion?

States that chose to oppose may keep preexisting Medicaid eligibility requirements, which may or may not benefit the people. For example, in Kansas, only adults with children under 32% the poverty line are eligible for Medicaid. Families with children in the 32%-100% bracket are not eligible for Medicaid or subsidies, and adults without children are prevented from obtaining Medicaid whatsoever.

Opponents of Medicaid argue that Medicaid expansion will cost the state more than it’s worth. According to an article by Forbes, the cost of expansion is far more than expected. In states like Kentucky, the amount of enrollment in Medicaid has doubled expectations. Costs have substantially increased in states like Ohio and Michigan, putting the burden on the shoulders of taxpayers. Furthermore, because of increased enrollment, the line to the doctor has substantially grown in length; with increased expansion is an increased demand on the state and hospitals.

Conclusion

The Affordable Health Care Act, as a whole has been a success. More people have healthcare insurance, and it’s cheaper for those who need it the most. It is however, not perfect. The consequences of a concerted push towards universal healthcare will be an increased burden on the state and its taxpayers, and many will not like that.  As we watch the President’s State of the Union Address we must be mindful of what the ACA has achieved, and how it will change with the eventual inauguration of a new President.

Author: Kevin V. Nguyen