The Patient Protection and Affordable Care Act (2010)

Excerpted from: Rediscovering the American Republic, vol. 2: 1877–Present

Background

In 2010, Congress passed and President Obama signed the Patient Protection and Affordable Care Act (PPACA). This comprehensive reform bill requires that all large companies provide health insurance to their employees, that all persons (with a few exceptions) obtain health insurance (whether through their employer or on their own), that all insurance programs satisfy ten core standards of coverage, and that wealthier Americans subsidize poorer Americans so that no person will lack healthcare for reason of cost.

President Harry S. Truman had proposed a nationalized healthcare program as part of his Fair Deal of the 1940s, but Congress was unwilling. In the 1960s, President Lyndon B. Johnson did persuade Congress to establish Medicare for the elderly and Medicaid for the poor, but most Americans still remained responsible for their own healthcare costs. In the 1990s, President Bill Clinton, together with his wife Hillary, sought approval for nationalized healthcare, but once again Congress rejected the plan. In 2003, President George W. Bush signed into law the Medicare Prescription Drug, Improvement, and Modernization Act, expanding the benefits provided to the elderly through Medicare. In the 2008 presidential campaign, nationalized healthcare again received prominent attention, with both of the leading Democratic candidates—Hillary Clinton and Barack Obama—promising to deliver this progressive reform.

Following Obama’s election, Democrats held the majority in both the House and the Senate. Obama claimed the electoral victory of his party as a popular mandate to enact comprehensive healthcare reform. Despite strong objections from congressional Republicans, the PPACA passed in the Senate by a vote of 60–39 and in the House by a vote of 219–212. Prior to the vote, a bill to expand student loans was merged with the proposed healthcare legislation to increase its chances of passing. Another factor that may have assisted the bill’s passage was that most members of Congress relied on second-hand reports as to what the proposal, known as Obamacare, would accomplish and how. Few had read the thousand-page bill in its entirety; in fact, the final language was not even available to be read in time for the vote. As Speaker of the House Nancy Pelosi, a Democrat from California, explained, rather cryptically, at a legislative conference, “But we have to pass the bill so that you can find out what is in it, away from the fog of controversy.”

Provisions, Requirements, and Exemptions

Under Obamacare, insurance companies are required to provide coverage to persons regardless of pre-existing conditions and insurers also are forbidden from limiting benefits by a lifetime dollar cap. Co-payments, co-insurance, and deductibles are eliminated for “preventative care,” a term which also includes FDA-approved birth control methods. All insurance plans must cover dependent children through age twenty-six. The law also classifies insurance plans into four categories—bronze, silver, gold, and platinum—based on the percentage of eligible healthcare costs that the insurance company pays on behalf of the patient (ranging from 60% to 90%).

An “individual responsibility mandate” requires that all persons obtain insurance. Employers generally are required to provide insurance for their workers, but for the self-employed or for those who work for small businesses, individuals must do so themselves. People who cannot afford to purchase insurance may shop at a government-exchange “marketplace” developed in cooperation between federal and state governments. In these “marketplaces,” taxpayers subsidize insurance premiums for the poor—an odd use of the term “market” for an arrangement that fits the definition of socialism rather than laissez faire.

Individuals and families desiring to opt out of Obamacare have few legal options. One of them is to participate in a medical cost-sharing ministry, an exception allowed under 26 U.S.C. 5000a(d)(2)(B):

The term “health care sharing ministry” means an organization . . . members of which share a common set of ethical or religious beliefs and share medical expenses among members in accordance with those beliefs and without regard to the State in which a member resides or is employed, . . . [and] which (or a predecessor of which) has been in existence at all times since December 31, 1999, and medical expenses of its members have been shared continuously and without interruption since at least December 31, 1999.

It appears that only three organizations satisfy the grandfather clause regarding a continual existence since December 31, 1999: Samaritan Ministries International, Medi-Share, and Christian Healthcare Ministries. With Samaritan, for example, a family agrees to share about $400 per month with any family having a healthcare need assigned to the first family. So, if Mr. Jones has a medical bill for $4,000, Samaritan Ministries asks ten of its member families each to send a check to Mr. Jones for $400 that month. Unlike traditional insurance, medical cost-sharing is charity-based, not contract-driven. Samaritan members do not pay premiums to the central office, but instead pay their shares directly to families in need. Moreover, biblical morality shapes the entire process, including both a prohibition of sponsoring immorality (such as abortion) as well as a positive command to bear the burdens of one’s neighbor: “Bear one another’s burdens, and so fulfill the law of Christ” (Galatians 6:2).

Controversy

No legislation of the early-twenty-first century has attracted as much controversy as the PPACA—or “Obamacare,” as especially its critics call it. Objections arise from moral, economic, political, and legal concerns.

On the moral front, conservatives object to the “marriage penalty” that the marketplace exchange imposes upon couples: under Obamacare, insurance is less expensive if a man and a woman cohabit out of wedlock than if they are married. Much like welfare under Johnson’s Great Society program, the PPACA offers a financial disincentive to become or to remain married. Moreover, the PPACA mandates that all insurance companies provide coverage for contraception, including abortifacient forms of contraception.

Economic forecasters also have expressed great alarm over Obamacare. By requiring that all insurance companies provide a high benefit level even to unhealthy populations, the PPACA necessarily will drive up the cost of private insurance plans. As these cost increases are passed to patients in the form of premium hikes, more people are likely to leave the private market and seek a subsidized plan in the government-run exchanges. The likely result is that private insurance plans will fold, being replaced by socialized healthcare. Premium increases will be compounded by tax increases, with wealthier Americans purchasing not only their own insurance at a higher price but also footing the bill for those who participate in subsidized exchanges. From the providers’ standpoint, Obamacare increases the complexity of what already was a burdensome maze of paperwork. Some doctors, in fact, switched to a cash-only policy as Obamacare was scheduled to come into full effect on January 1, 2014.

Politically, congressional Republicans have attempted to use the controversy surrounding the PPACA to force Democrats to the negotiating table on broader concerns about the growing national debt. In October 2013, the government experienced a partial shutdown because the two parties in Congress reached an impasse concerning the debt ceiling—the upper limit of how much money the U.S. Treasury Department is able to borrow in order to pay for government programs.

Philosophically, the whole debate echoes many American voices from the past who championed laissez-faire economics versus the advocates of progressive reform. The PPACA represents the greatest triumph of progressivism that the nation has ever witnessed, which from a laissez-faire perspective means the greatest menace the government has ever produced.

Critics of Obamacare have advanced two basic legal arguments against the PPACA in court. On the first issue, the U.S. Supreme Court held in National Federation of Independent Business v. Sebelius (2012) that the individual mandate falls under Congress’s power to tax and therefore is constitutional. (The mandate imposes a tax penalty for individuals who fail to obtain insurance and also do not qualify for an exemption, such as by participating in a medical cost-sharing ministry.) The second issue has to do with religious freedom, and remains to be determined by the nation’s highest court: Does the PPACA violate the right to religious liberty, protected by the First Amendment, by requiring that a Christian business owner provide insurance to employees that funds procedures contrary to the owner’s Christian convictions, such as abortifacient contraception?

 

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