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Obamacare wins!

The moment CNN called Ohio for Obama at 10:15 p.m. November 6, the biggest question of the past on what will be the direction of our US healthcare policy was answered: “Obamacare” would not be repealed. Obamacare is considered to be Obama’s crowning achievement of his first term; Mitt Romney vowed to repeal the entire or portions of the law if elected. While the Republican-controlled House of Representatives may seek to repeal bits and pieces of the law, Obama’s reelection ensured that the law as a whole would remain. So what does an Obama victory mean for healthcare in the United States?

The Obamacare Plan Overview

Obamacare, officially known as the 2010 Patient Protection and Affordable Care Act, represents “the biggest overhaul of the $2.8 trillion U.S. healthcare system since the 1960’s,” according to a Reuters article from November 7 entitled “Obama wins clear health law hurdle, challenges remain.” Obamacare would provide some level of health coverage to more than 30 million uninsured Americans, beginning in 2014. The law will also expand Medicaid and introduce subsidized health insurance exchanges for individuals to buy their own coverage.

State Medicaid Expansion Responsibilities

These last two provisions rely heavily on individual states. Each state is in charge of distributing their respective State Medicaid funds; as a result, Medicaid coverage from state to state varies greatly. The expansion seeks to even out coverage and “close the gaps” in the states with the least coverage. However, the new law doesn’t guarantee that such gaps will be closed. In the Supreme Court’s June ruling, Obamacare was upheld, but the court ruled that states had the option to opt out of Medicaid expansion. This may lead to as many as six states with Republican majorities and governors who oppose Obamacare to opt out of Medicaid expansion for their state, no matter how large the gap, according to the Reuters article.

In addition, some states are unprepared to expand their Medicaid programs, especially through setting up their own subsidized exchanges by 2014, as many states waited to begin the overhaul, knowing that a Romney win would have made any changes unnecessary. Obama’s second term puts these states on a short deadline – the states must say they will or won’t have an exchange ready by November 16 – may lead more states to opt out, simply because of lack of time to prepare, jeopardizing Obama’s goal of around the country Medicaid expansion. In order to have exchanges ready, the Reuters article says, most states would need to partner with the federal government to create an exchange.

Another major healthcare impact from Obama’s reelection is that Medicare as we know it will survive. Romney sought Medicare reform through changing the program from a set of guaranteed benefits to a payment program allowing seniors to purchase their own healthcare coverage, with the idea being that seniors could find more complete or customized coverage by shopping around. However, many feared that seniors wouldn’t be able to find coverage offered cheaply enough to match what was offered under Medicare, and seniors opposed Romney’s plan 2-to-1, according to Reuters.

The Obamacare plan includes cutting $716 billion in Medicare spending by slowing the growth of payments to providers and Medicare Advantage plans.  Congress has implied that they may not allow such deep cuts to take place. If this is correct then the process to begin reining in rising Medicare costs will not occur. If we mix in the money to be spent on subsidizing insurance exchanges the net result could cause the deficit to rise as high as $1 trillion in 2013, as reported in a Reuters article from August 22 entitled “Forget the cuts – Medicare spending is still on the rise.”

Obama’s reelection and the subsequent safety of Obamacare holds obvious implications for healthcare and our country as a whole, both through the healthcare available to Americans and through what debt we may end up with as a result.

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Rebecca S. Busch, Healthcare Advocate
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