Federal Health Care Reform: A Two-Year Report Card

by Dr. Roger Stark

Major health care reform (Patient Protection and Affordable Care Act) became law two years ago. The legislation passed with only Democratic votes and totaled a massive 2,700 pages. The Medicare and Medicaid programs, by contrast, were enacted in 1965 with broad support from both parties and totaled only 137 pages. Although the 2010 PPACA will not be fully implemented until 2018, we know much more about it today than was apparent two years ago.

The American public continues to view the law unfavorably. The weekly Rasmussen poll consistently shows a firm majority of Americans, 52 to 60 percent, favor repeal. A recent poll by the Kaiser Foundation reveals 51 percent of the public views the law unfavorably. The CNN polling organization found that 59 percent of Americans oppose the law and only 39 percent support it.

Before passage, Americans were told the law would decrease health care costs for the country. The nonpartisan Congressional Budget Office (CBO) estimated the original cost of the legislation would be less than $1 trillion and would reduce the deficit by $100 billion in the first ten years. These numbers were based on the government collecting ten years of taxes and providing only six years of benefits. CBO officials now believe the first ten years will cost Americans at least $1.5 trillion and will add another $700 billion to the deficit.

The chief Medicare actuary, Richard Foster, estimates PPACA will increase overall health care spending from 17 percent of the economy to 21 percent by 2020. Foster also calculates that insurance premiums will increase by $2,100 per year on average because of PPACA. One of the architects of the law, Jonathan Gruber (an M.I.T. economist), recently stated that the law will “dramatically increase” insurance premiums.

The second ten years of the law, from 2020 to 2029, will be even worse. There will then be ten years of taxes collected to pay for a full ten years of benefits. There will be no four-year revenue buffer by then. Cost estimates for the second and subsequent ten-year periods run as high as $2.5 to $3 trillion and will add untold billions to the national deficit. So much for holding the cost of health care down.

The President told Americans we could keep our present health insurance if we liked it. A recent national survey, however, found that 50 percent of small business employers and 30 percent of large employers will definitely drop or would consider dropping employee health benefits. The CBO now estimates that at least 14 million Americans will lose their employer-provided health insurance under PPACA.

Proponents of the PPACA guaranteed the law would cover health insurance for every American. Estimates now predict that at least 20 million people will remain uninsured.

To date, the federal government has provided over 1,200 waivers, or customized repeals, to businesses, labor unions and other organizations, allowing them to opt out of part or all of the PPACA. Yet the law forces states to add 16 to 23 million more people to the budget-breaking Medicaid program.

Proponents of the law point out that millions of young adults under 26 years old have been added to their parents’ health insurance plans. Of course, the impact on improving the nation’s health is minimal. These young people for the most part don’t require health care.

Proponents also argue that small businesses now have access to tax credits for employee health insurance. Because of very specific requirements and a huge regulatory burden, only five percent of eligible employers have actually used these credits.

In reality employers face a very uncertain future. In a recent Gallup Poll, nearly 85 percent of small business employers are not hiring now because of fears about regulations and the cost of health benefits required in the new law.

The PPACA has become increasingly unpopular since it passed two years ago. Experience with the law and concerns about the future make this growing unpopularity warranted.

Dr. Roger Stark is a health care policy analyst at Washington Policy Center in Seattle, Washington and a retired physician. He is author of the book The Patient-Centered Solution: Our Health Care Crisis, How It Happened, and How We Can Fix It. He has also authored numerous in-depth studies on health care policy. Dr. Stark was one of the cofounders of the open-heart surgery program at Overlake Hospital in Bellevue and served on the hospital’s governing board. He retired from private practice in 2001 and became actively involved in the hospital’s Foundation, serving as Board Chair and Executive Director. He is a guest contributor for Cascade Policy Institute, Oregon’s free market public policy research center.