News / USA

    Without Reform, Obamacare Could Raise Health Care Costs

    Without Reform, Obamacare Could Raise Health Care Costsi
    X
    October 09, 2013 4:15 PM
    Since enrollment began in the new U.S. health care program known as "Obamacare" last week, thousands of uninsured Americans have been signing up for coverage -- even while Congressional opponents have partially shut down the government in a bid to repeal the law. VOA’s Brian Padden reports that this initial success at expanding coverage could end up alienating the vast majority of Americans by significantly raising their healthcare costs.
    Brian Padden
    Since enrollment began in the new U.S. health care program known as "Obamacare" last week, thousands of uninsured Americans have been signing up for coverage - even while Congressional opponents have partially shut down the government in a bid to repeal the law.  This initial success at expanding coverage could end up alienating the vast majority of Americans by significantly raising their healthcare costs.

    The Affordable Care Act - popularly known as "Obamacare" - makes it possible now for James Matthews to get coverage through the expanded federal Medicaid program for low income families - even though he has been diagnosed with diabetes.

    “I’m excited to know that they can’t use that pre-existing condition as a way to discriminate against me and not provide insurance or to limit my coverage because I do have diabetes,” he said.

    And Ny Whitaker, a self-employed single mother, will now receive a federal subsidy so she can purchase private insurance  being offered on newly created health exchanges.

    “I think it’s time for us to just take care of our citizens and make sure everyone is insured and we have a level playing field.” she said.

    But if Obamacare is successful only in expanding coverage to those in need of health care, the program will likely fail in the long run.

    Christopher Condeluci is a former counsel to the Senate Finance Committee that helped develop the Affordable Health Care Act.

    “If more people are covered by health insurance and they utilize health care services to a much greater degree than we would have ever expected, that’s going to put inflationary pressure on health care spending and that’s going to increase the cost of health care overall and that’s going to impact everybody,” he said.

    That's why the health care law mandates that even young healthy individuals must enroll to share the costs - or pay a fine if they do not already have health insurance.
    But Condeluci said because it was now illegal for insurance companies to refuse coverage, many healthy people may just pay the $95 fine, or one percent of their salary whichever was greater, and then joined a plan if they became sick.

    “There is a bit of a moral hazard. Somebody goes without health insurance but yet can get it when they get sick.  That results in adverse selection or that results in higher utilization of medical services which raises costs for everybody across the board,” said Condeluci.

    Obamacare is based on the successful system developed in the northeastern state of Massachusetts under then-Republican Governor Mitt Romney.  But Romneycare, as it's called, can impose greater penalties for non-compliance. 

    Condeluci said reforms were needed to make Obamacare economically viable in the long term. But in these politically divisive times, they are unlikely to be enacted.

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