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The ‘good old days’ before Obamacare

Pining for days when the ACA wasn't 'messing with your coverage?' Let's take a stroll down memory lane to see what you're missing now.

We Americans have short-term memory when it comes to health care. Either that or far too many of us have bought – hook, line and sinker – the false accusations and unfounded predictions about Obamacare we’ve been subjected to over the past five years.

Little wonder when you consider, as I wrote recently, that $418 million has been spent demonizing the law, while a small fraction of that has been spent explaining it and telling people how it can – and does – benefit them.

We weren’t always so negative about reform.

82% wanted the system overhauled

In August 2008, about six months before debate began in Washington on what would become the Affordable Care Act, 82 percent of Americans were so dissatisfied with the U.S. health care system they wanted it overhauled, according to The Commonwealth Fund, which commissioned the poll.

We were worried not only about how we personally were being affected by the inefficiency and high cost of our uniquely American health care system, we were worried about how our country as a whole was being affected.

And for good reason.

50 million were uninsured

The cost of health care – and health insurance – was rising so fast that ever-growing numbers of us were winding up in the ranks of the uninsured. Fifty million – one out of every six of us – were uninsured when the Affordable Care Act was signed into law in 2010. That number was projected to grow by several million more over the coming decade if Congress didn’t pass reform legislation.

The main reason so many of us were uninsured in 2010 was that health insurance had simply become a budget-buster for many American families. The cost of employer-sponsored family coverage reached $13,375 in 2009, an increase of 131 percent in ten years, according to the Kaiser Family Foundation.

The growing number of uninsured people was not just a costly inconvenience for those most directly affected. When an uninsured person seeks care in a hospital emergency room and can’t pay the bill, it results in cost shifting. Health insurance premiums are an estimated $1,000 higher than they would be if not for this cost shifting.

Economy was burdened by health care expenses

Our pre-reform health care system was also hurting our global competitiveness.

For years we have been spending far more for health care – on both a per capita basis and as a percent of Gross Domestic Product, than any other country. The amount we spend per person in the U.S. – $8,745, according to the Organization for Economic Co-operation and Development (OECD) – is at least $4,000 more than the per-capita expenditures in countries that are our global economic competitors, including Australia, Canada, France, Germany, Japan and the United Kingdom.

And almost 18 percent of our GDP is consumed by health care expenses, compared to 9.1 percent in Australia, 10.9 percent in Canada, 11.7 percent in France, 11.3 percent in Germany, 10.1 percent in Japan and 9.4 percent in the U.K.

Domestic spending drained

By spending so much on health care, we have less to spend on things like education, our transportation system and other infrastructure needs. Conversely, other countries can spend more in those areas, giving them a global competitive advantage.

While the percentage of GDP we devoted to health care kept going up year after year, some countries were actually able to take their health care spending in the other direction. Canada, Germany and the U.K. all reduced their GDP spend on health care between 2009 and 2012, while ours went from 17.7 percent to 17.9 percent.

As if that weren’t bad enough, we have continued to trail those and other countries in health care outcome measures, from infant mortality to life expectancy. In other words, the world’s other developed countries spend far less on health care yet have better health outcomes.

Hundreds of thousands were caught in job lock

Our pre-reform system was also hindering our entrepreneurialism. That’s because hundreds of thousands if not millions of our best and brightest were victims of job lock, afraid to leave their corporate jobs to start their own businesses because doing so would usually mean walking away from affordable health insurance. And in a system in which insurance companies could refuse to sell you coverage if you had a pre-existing condition, many would-be entrepreneurs gave up their dreams of starting their own businesses.

Are things really worse now because of Obamacare?

All of this is beginning to change. Health care inflation has started to slow, in large part because of provisions of the Affordable Care Act. For example, the law is saving the Medicare program billions of dollars by reducing the overpayments the government had been making for years to private insurance companies to encourage them to participate in the Medicare Advantage program.

The number of uninsured Americans is expected to fall to 42 million by the end of this year, thanks to the Affordable Car Act. In two years, the Congressional Budget Office projects it will have fallen to 30 million. That’s still far too high – especially when you consider that the other developed countries were able to achieve universal coverage years ago – but without the Affordable Care Act, the number of uninsured Americans would have risen to 57 million by 2022.

Not hardly.

And despite what you probably have heard from some politicians and media pundits, the CBO says Obamacare will actually reduce the federal deficit in the coming years. That means that the federal government will be spending less on health care in the future than it would have spend if the law had not been enacted.

Yes, the feds are spending more to bring more people into coverage through the expansion of Medicaid and by providing subsidies to people who otherwise couldn’t afford insurance, those costs will be more than offset by budget savings in Medicare, Medicaid and other programs and by revenues from taxes and fees on some insurance plans, medical device manufacturers and some high income Medicare-eligible earners.

Bottom line: our country will be healthier in the coming years in a number of ways – including fiscally – thanks to the Affordable Care Act.

Wendell Potter is the co-author of Nation on The Take: How Big Money Corrupts our Democracy and founder of Tarbell, an independent, nonprofit multimedia journalism platform dedicated to investigating the powerful forces that influence public policy.

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1 year ago

More might have insurance but most people I know cannot afford to use it because of deductibles that are out of reach. As for myself, my once excellent health insurance is still good but my costs have gone up considerably. And with three autoimmune conditions, unfortunately I have to use it quite a bit. Everyone that I know has had their insurance coverage go DOWN compared to before. If they have to buy it on the marketplace it is not affordable.

Louise Norris
1 year ago
Reply to  Susan

It’s been 11 years since the ACA was enacted, so premiums and out-of-pocket costs would have risen dramatically in the individual market over that time, even without the ACA (they had been rising at a fairly rapid pace in the 90s and 00s). The plans and prices that people remember from pre-ACA days would no longer be available today.
But it’s true that deductibles and out-of-pocket costs are high, particularly for lower-level plans (bronze plans, or silver plans for people who don’t qualify for cost-sharing reductions). The only way to solve this, in the long run, is to bring down the cost of health care, which would require significant government intervention (ie, Medicare-style capping of reimbursement rates). But the American Rescue Plan, which was just enacted in March 2021, helps to make more robust coverage affordable for more people, at least for 2021 and 2022:

1 year ago

this article is biased towards Obama supporters, I seem to wonder why all the ACA articles that support ACA neglect the fact that families who are making more than 90k (which is low in many states) pay too much for health care and yet still have to pay too much for deductibles and out of bucket expenses. May be ACA helped low income families and lowered government pay-outs toward health insurance, but taxpayers still pay their continuously raising federal and state taxes while they are paying for health insurance. I’ve never seen my tax rates go down as the government saves money. By the way, just like the government who try to hide facts behind the complex terminology in many topics, this article did exactly the same to cover the topic of health insurance in complex terms, acknowledging that yes health care is a disaster but yet justifying that it’s good for the greater good

Louise Norris
1 year ago
Reply to  Suleiman

Even before the American Rescue Plan, a family of four could earn up to $104,800 in 2021 and still qualify for premium subsidies. With the American Rescue Plan in place, there is no longer an income cap for subsidy eligibility. In areas where coverage is particularly expensive, or for older enrollees, premium subsidy eligibility now extends well above 400% of the poverty level:

Every Working Man
Every Working Man
1 year ago

I pay more than 3X as much as I used to, because I am a healthy, straight, white upper middle class white male. 82% wanted change? Sure – but NOT OBAMACARE! Get the government OUT of healthcare! Crooks!

Louise Norris
1 year ago

It’s been 11 years since the ACA was enacted. Health insurance premiums were increasing at a rapid rate in the decade prior to that, and you’d currently be paying far more than you were in 2010, even if the ACA hadn’t been enacted. That’s partly due to medical inflation, and partly due to the fact that you’re now 11 years older. Pre-ACA, it was common for insurers to use a 5:1 premium ratio for age rating, which meant that the increase due to aging was more significant than it is now (the ACA imposed a 3:1 cap on the age-related premium ratio).

The fact that you’re straight has nothing to do with your premiums. You describe yourself as upper-middle class, so it’s possible that your income is too high to qualify for premium tax credits (and I assume you purchase your own health insurance, otherwise this is all a moot point). But I would urge you to check again this fall to see if you’re potentially eligible for premium tax credits. The American Rescue Plan eliminated the income cap for eligibility, which means that you might qualify this year even if you didn’t last year:

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