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Obamacare not in 'death spiral' because people value it



President Trump and the Republican Party are stymied in their efforts to repeal and replace Obamacare; they are learning the difficulties of taking away government benefits that people value. The task is made harder because Congressional Republicans have never gone beyond their ‘repeal and replace’ mantra and undertaken the hard policy work required to do this—and they have been unable to unite around a common approach.


Conflicting rhetoric and promises from Trump, who clearly has no idea about the substance or consequences of congressional proposals and the processes upon which their enactment depends, have not helped. The man who once said: ‘You're going to have such great health care at a tiny fraction of the cost and it's going to be so easy’ is now reduced to issuing veiled threats aimed at wringing a healthcare bill—the substance of which hardly seems to matter—out of an increasingly divided Republican caucus.

The only issues that unite Republicans is their antipathy to Barack Obama and their hostility towards his key legacy, healthcare reform. There was not a single Republican vote for Obamacare in 2010 and Republican rhetoric quickly poisoned public opinion about its provisions.

Yet the bill, although imperfect, was soundly constructed and thoughtfully implemented. It has withstood constitutional challenges and survived endless Congressional votes to repeal and amend it. Republicans talk only about its problems and the Trump Administration has worked hard to sabotage it further, but the fact is that Obamacare is not in a 'death spiral'. It is working surprisingly well and delivering real change to peoples’ healthcare.

The Republican leadership does not grasp the national need for government to have a role in providing affordable health insurance and better access to care. There is an underlying theme of the undeserving poor and personal responsibility in their approach.

They ignore the evidence for Obamacare’s success and belittle its public support. Yet poll after poll shows growing support for Obamacare, which is now considerably more popular than the politicians who oppose it. There is also increased public recognition of how many Americans depend on Medicaid.

Americans are increasingly aware that proposed Republican changes will ensure that 20 to 30 million people lose health insurance and increase the cost of insurance for all but the wealthiest and healthiest. It will allow insurers to revert to discriminating against those with pre-existing conditions, and make sharp cuts to Medicaid that will affect the poor, the disabled, the elderly, hospitals and residential facilities that provide their care. That is reason enough for their anger; that these changes are done to ensure big tax cuts for the wealthiest few adds to their ire.

Supporters of Obamacare cannot rest easy so long as the current Congress remains in office and Trump occupies the White House. He now threatens to wreck the system. ‘We’ll let Obamacare fail, and then the Democrats are going to come to us,’ Trump saysadding: ‘I’m not going to own it.’ But he now will own any subsequent failure to fund or erode the law’s provisions, even as he publicly casts aside his responsibilities as President to implement the laws of the land.

"Americans are increasingly aware that proposed Republican changes will ensure that 20 to 30 million people lose health insurance."


The only viable option for Trump and Republicans is to do what a majority of Americans want them to do—work with Democrats to fix Obamacare’s acknowledged problems so that it can work as intended. A range of options has been floated, including: tackling  the cost of prescription drugs, setting up a reinsurance program to shore up the exchanges, and reviving the idea of a “public option” to compete with private carriers and drive down prices. Barack Obama has said he could live with changing the name of Obamacare to Trumpcare if that assuaged Trump’s ego.

There are lessons here for Australian politicians. The Federal Coalition has learned the hard way that they must pay more than lip service to their support for Medicare, which is seen as an iconic Australian benefit and rates as the most popular government program.

Their various efforts to undermine the universality of Medicare with increased co-payments, and safety net thresholds, and under-the-radar attempts to force a greater reliance on private health insurance now dog them at every election, as the Mediscare campaign of 2016 showed.

Like the Republicans, the Turnbull Coalition government seems to have put the development and implementation of needed health policy reforms in the “too hard” basket and failed to recognise the role the social determinants of health play in determining population health.

In particular, increasing inequality is a threat to progress in healthcare reform, improved health outcomes, and increased national productivity in both Australia and the United States. Both countries will fail to prosper economically unless inequalities in access to health and healthcare are addressed.

Dr Lesley Russell is an Adjunct Associate Professor at the Menzies Centre for Health Policy at the University of Sydney. From 2009-12 she worked in Washington DC on the enactment and implementation of Obamacare.

Topic tags: Lesley Russell, Obamacare, Trump, Republicans



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Existing comments

And let's not forget the Catholic hierarchy, which has fought so consistently to combat and disparage Obamacare, stands exposed as wreckers too and not on the side of the poor or sick in this matter.

smk | 24 July 2017  

I agree wth SNK that the role of the American Bishops` "culture warriors" in this whole saga is deplorable. Health care and its funding are very complex and most politicians just don`t understand it and come to it with ideology only. Australia has a world-class system but is not perfect, especially in terms of equity, too much arbitrary out-of-pocket expenses, both reflecting poor use of tax subsidies. In some ways it is amirror image of Obamacare which does not have enough direct Government spending involved (Medicaid of the poorer off) and too much reliance on insurance even for acute care, while in Australia there should be a greater "private" insurance presence especially for elective procedures and chronic care, with government means-tested insurance subsidy allowing the poor to engage in this. Crazily, the subsidy for health insurance in Australia goes to the rich!! ... and the poorer half of society doesn`t have it at all and just have to wait in pain for procedures, or indeed die waiting!! A good friend of mine recently died appallingly from liver and pancreatic abscesses because she had been waiting 9 months to get her infected gall-bladder removed "publicly". She died of lack of insurance cover in reality; if the had had it the gall bladder would have been out in a fortnight. Where are our bishops on this issue of inequity and excessive out of pocket expenses...(we are way out on a limb in the OECD on these costs)?

Eugene | 25 July 2017  

I can't believe that by 9.45 pm on 25th July there have been only two comments on this exemplary article by Dr Russell on The Affordable Care Act. The attitude of the rich & powerful regarding such a basic task of democratic governments - to protect & care for the health & wellbeing of their citizens - exposes POTUS & his Republican supporters as devoid of the milk of human kindness. The Affordable Care Act has its flaws but Trump got away with saying he would repeal it & put something (unspecified ) in its place. Trump is a snake oil salesman of the first order but his sales pitch is music to the ears of Health Insurers, Pharmaceutical companies, and selfish followers of the Prophets of the religion of Prosperity. As Dr Russell makes clear there are lessons here for the Australian government (and Opposition ) but where are the signs of leadership?

Uncle Pat | 25 July 2017  

I was in the US recently with an opportunity to talk to health professionals and read up on some very good analyses of what is happening. Although the Republicans cannot repeal Obamacare, they are able to damage it substantially through process change, and this is bothering both insurers and providers a lot as they have invested up to meet what had been expected under a Democratic President. There are a number if crucial acute issues: as demand has gone up substantially as poor people have had access to care, showing a great deal of untreated disease and unmet need in the community (surprise!), the rebates on Medicare/Medicaid items have been reduced so it is becoming uneconomic to provide the care and those providers that have invested into this enthusiastically are being badly burned; at a state level Governors can decide how much Federal subsidy for insurance to accept for their populations on the means-tested cut off; around the country this now varies from the highest (but only $28K family income) to as low as $9k in some Republican strongholds i.e. hardly anyone gets subsidy; there is still a lot of stress and underinsurance in those families just above even the "high" income threshold, so the those in the $28-40k family income range cannot really afford insurance; the dependence of many on employer insurance, which has become a terrible system feature, means that workers cannot bargain effectively for better pay under threat of losing their job and so their insurance (there is also the issue of some employers, such as the RC church, not wanting to pay for "reproductive health" under a "freedom of religion" banner; in many poorer counties where insurance uptake is low , for all these reasons, insurers don`t want to be involved and choice is limited and expensive. So, although Obamacare is better than what was there before, it is rather a bit of a mess which is getting worse under Republican white-anting. Many Democrats feel it might be best to let it crash so that the country is forced to go to a better comprehensive single-payer system or a more rational mixed system such as Australia where at least acute and catastrophic care is covered by full government funding, with means-tested subsided insurance foe the rest and ending the direct employer involvement. But governance in the USA at the moment is chaotically dysfunctional, so who knows?!

Eugene | 26 July 2017  

Thanks Dr Russell and thanks Eugene for an informative postscript to an important essay. We should value what we have in Australia and not go down the US path.

Brett | 27 July 2017  

You have hit the nail on the head, Eugene, in suggesting that there should be greater private insurance presence. Health funding requires considerable overhaul. Equity suffers particularly for poor and disadvantaged patients because government funds which should be supporting the public system are dissipated in paying a large slab of the costs for purely private services accessed by those who can afford to pay or can afford adequate health insurance cover to defray cost and prevent any financial disadvantage. Clearly we can have equity if care is available in the government funded public system to all who can't afford to pay any costs or buy insurance. This funding should not be eroded by paying large sums of money to private practitioners and hospitals who do not provide free services in the public sector. Means testing is an essential to the fair and equitable distribution of public funding. Those who are able to pay towards the cost of their own care should then carry the private insurance that provides the level of cover their financial status indicates they can meet without disadvantage. At the same time, insurers should be required to provide a table of premiums related to means testing while paying the same insurance benefit for the same service. Funds should be forbidden to set premiums based on Mickey Mouse services that have nothing to do with proved health benefit e.g. acupuncture, a whole range of alternative unproven therapies and gym subscriptions (people don't have to attend a gym to attain an appropriate level of healthy fitness). On the other side of the coin, equity in medical fees is non-existent. Some medical fees should be seriously reduced, particularly in radiology and pathology (heavily automated these days) and some surgery. Other fees should be increased, e.g. a kidney transplant to save your life costs a third of having a crown on a tooth and a tenth of a new set of breasts. I suspect that I am in more trouble than Flash Gordon with my profession after this little effort!!!

john frawley | 27 July 2017  

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