5 Reasons Why Obamacare Is Proving to be so Complex
Ever since President Barack Obama signed the Affordable Care Act into law in March 2010, the complexities of the health care reform have drawn criticism — even supporters winced at the length of the document. The complexities have also created a huge stumbling block for the government in its efforts to implement the piece of legislation that has become known as Obamacare. On July 8, Washington D.C.-based think tank Brookings Institution detailed why the implementation of the Affordable Care Act has been so difficult. The analysis came just days after the Obama administration announced that the employer mandate, which requires businesses with 50 or more full-time employees to provide their workers with coverage or face penalties, would be delayed because the government and businesses needed more time to adjust to the changes — or the complexities the new system will bring.
With Obamacare still in the implementation phase, any insight into its complexities can be of value. These are our main takeaways from the report:
1) According to the Brookings Institution, government complexity comes with the territory, so to speak, in the United States. While the U.S. may have a long history of relying on private markets to provide such services as insurance, when the markets fail, as supporters of Obamacare have argued they have in the area of health care, the U.S. often resorts to government regulation. That mindset and the federal structure act as a brake on centralized power, but they also have made governance inherently and permanently complex.
The federal structure was chosen because the United States was formed from a collection of sovereign states that feared centralized government. That fear has permeated our national consciousness and has trickled down generations. As a result, the U.S heavily relies on the states to formulate and execute domestic policy. “Our federal system has great strengths, but it is inherently complicated,” noted Brookings. Federalism complicated the expansion of Medicaid, which some states refused to do, and the creation of the insurance exchanges, a task some states have left to the federal government.
2) This “pro-market mindset” has also prevented the U.S. from adopting a national system to provide or pay for universal health care as many other advanced countries, like Sweden, did decades ago.
In a piece for The New York Times, Cornell University economist Robert Frank asked several Swedish health economists to express their opinions regarding the underlying economics of government-run healthcare. He noted that like economists in most other countries, the individuals he questioned tended to be skeptical of large bureaucracies. “So if extensive government involvement in health care is indeed a recipe for doom, they should have clear evidence of that by now,” Frank wrote. But none of them voiced the kind of complaints about bureaucrats and exorbitant health costs that often surface when Obamacare is debated. Rather, Frank said that his Swedish colleagues described the performance of their healthcare system as superb.
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3) Instead of government-run healthcare, the U.S. has relied primarily on employers to purchase health coverage for their employees in the private market, with government policy filling in the gaps. The very fact the current system has so-called “gaps” makes it complex.
Two big gaps were fixed by pieces of legislation passed in 1965 as part of President Lyndon Johnson’s “Great Society,” a set of domestic programs that included Medicare, which provids health insurance to older Americans and the disabled, and Medicaid, which brought health insurance to the poor. The last gap in insurance coverage — those Americans without employer coverage, but not eligible for Medicare or Medicaid — was addressed by the Affordable Care Act.
4) Because the goal of Obamacare was to fill this last gap, which involved both expanding Medicaid and subsidizing purchases of private insurance, the legislation was inherently complex, noted Brookings. “But there is no simple way to patch a patchwork,” the institution added.
5) As noted previously, federalism has complicated the creation of the online insurance marketplaces. It would have been simpler to put the federal government in charge of creating exchanges, as the the Brookings’ analysis noted, and that was actually an early plan. But, because insurance is regulated at the state level and varies greatly across the country, the 50 states had to be involved. As a result, fifteen states and the District of Columbia are now working to have their exchanges ready for the October 1 deadline for starting enrollment.
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