Five Reasons Why Obamacare Isn’t Working and Was Doomed from the Start!

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March 3rd, 2016

It’s been almost six years since Obamacare passed and still more Americans dislike it than like it.  Premiums are growing, it hasn’t bent the cost curve as advertised, we haven’t been able to keep our doctors as promised and it’s had a serious detrimental impact on Medicare.  There are reasons why the promises haven’t materialized and they were evident at the very beginning.

In 1935 President Roosevelt signed the Social Security act into law.  In 1965 President Johnson signed Medicare into law.  In 2010 President Obama signed Obamacare into law.  All three of these laws had a huge impact on the nation’s budget, our pocket books, and our retirement or healthcare but Obamacare has some huge differences, differences that doomed it from the beginning and are still being manifested almost six years later.  Here are five of the most damaging differences that doomed this massive law from the very beginning.

  1. Social Security and Medicare were passed with both Democratic and Republican votes; they were true bipartisan bills.Obamacare was passed during a narrow window of time when the Democrats controlled the House, the Senate (with a filibuster proof 60 votes) and the Presidency.  The bill was forced down the Republican’s throat and therefor they had no incentive to accept it, to fix it or to make it work.  Both Social Security and Medicare have been modified numerous times. The President could have included the ability to purchase insurance across state lines or some form of tort reform and gained some Republican votes but it was his way or the hi-way and now he is reaping what he sowed.
  2. Obamacare was financed by cutting other programs, specifically Medicare.RetireSafe shouted as loud as we could about the $500 billion (that grew to $700 billion) that was going to be extracted from Medicare to pay for Obamacare.  You can’t think that American’s are going to support a law that takes money from one generation and re-distributes it to another. It’s not the way America has worked for over 200 years and the last six years has proved that it still doesn’t work.
  3. To finance Obamacare there had to be quick savings, the law was not designed to generate savings from efficiency.For example, Medicare Advantage (MA) is a free market based solution to get away from the wasteful fee-for-service based Medicare approach but Obamacare needed quick money now and one way was to cut the payment rates for MA. Every year CMS, the agency that administers Medicare, has tried to cut MA payments by 2 or 3 percent rather than raising the rates by 4 or 5 percent, the amount needed just to keep up with the average yearly increase in healthcare costs. The President couldn’t wait for the efficiency of an approach that; incentivizes preventive healthcare, expands care coordination and encourages competition. . . they needed the money now.  RetireSafe believes that Medicare Advantage is a great choice for older Americans.  Every year we join a chorus of other organizations lobbying and working to overturn CMS’ proposed cuts.
  4. Obamacare is full of, “the agency (usually HHS) shall develop the regulations” type of language.This approach left the responsibility of developing many of the rules of how Obamacare would actually operate on civilian agencies.  Private industry, other parts of the government, almost everyone connected with healthcare, has waited, or is still waiting, for these regulations to be defined and released.  It has thrown uncertainty into the whole healthcare system from Obamacare to Medicare. Insurance companies, doctors, hospitals, drug manufacturers, pharmacies, medical device manufactures, employers, employees, have had to wait for these regulations. . .  regulations that have proven to be centered on saving money rather than focused on the patient and long term efficiency.
  5. A key ingredient of Obamacare was the mandate that everyone must have insurance.This approach was challenged to our highest court and was almost overturned.  American’s don’t like to be forced, we enjoy and hold dear the freedoms guaranteed by the constitution.  It left a bad taste in our mouths and remains one of the reasons for Obamacare’s unpopularity.

There are reasons that we are still talking about Obamacare six years after it was signed into law. There are reasons that legislation continues to be proposed to repeal the law.  There are reasons that candidates running for office, both Democrats and Republicans, are talking about how they would repeal or change Obamacare.

Obamacare was doomed from the beginning. The basic design, the way it was passed and the way it was financed were all flawed.  There’s a better way to provide healthcare to Americans.  I just hope that in other six years we aren’t still talking about Obamacare.