If you search for and read an Obama healthcare reform summary, you will most likely find a laundry list type of overview that spells out the provisions of the new law recently passed in the United States. However, reading a list of the bill’s provisions does not explain the intense rancor and debate among the American people and their political leaders in Washington over the passage of this act.
The official title of the bill passed by the United States Congress in 2009 and the budget resolution that amended it is “The Patient Protection and Affordable Care Act”. The essence of this legislation – and the underpinning reason that has led to the divisions among Americans regarding this act – is to provide universal health care to Americans using the existing private medical insurance industry. It helps first to understand how private medical insurance works.
Private medical insurance coverage is based on the average cost of healthcare spent each year by a hypothetical group of people that represent the profile of individuals in an insured pool. Think of the insured pool as the “group” in the group coverage plan. This average cost is the annual premium charged to each member of the group by the insurance provider. In exchange for the premium, and with requirements such as a deductible and co-pays or co-insurance responsibilities imposed upon the plan members, the insurance company will pay or reimburse an agreed portion of the members’ qualifying medical expenses.
This usually works out to where some people don’t access much medical care during the year while others might need more than the average. The numbers usually come out to where the medical insurance company stays in business and makes a profit.
However, now that healthcare reform legislation has passed and will mandate that medical insurance companies offer coverage to anyone that wants it, regardless of a person’s preexisting conditions or medical history, the insurance company can no longer restrict a pool of covered people to those that fit their underwriting requirements. In order for insurance companies to not go broke and stay in business to provide coverage for medical expenses for all, every person that does not qualify for Medicare or Medicaid or who does not already have qualifying medical coverage must participate and buy a qualifying medical insurance plan.
This solves the practical problem. If you cover everybody using the private medical insurance industry, then everybody has got to participate by purchasing coverage, especially healthy people who do not expect to use much medical services. The idea is that this will make the numbers work for the insurance companies to stay in business and not go broke because only the sickest members of society are purchasing coverage.
While the individual mandate, as its called, solves the practical problem, it also trades this problem for what many believe to be a conflict with the U.S. Constitution. There is enough constitutional basis to indicate that the United States federal government does not have the right or authority to force an individual to participate in an economic activity in the private sector if that individual chooses not to participate. In this case, the economic activity is purchasing health insurance from a private medical insurance company.
And this is what the fuss is all about. You can expect an attempt at the bill’s repeal by its detractors and ultimately, a decision rendered by the U.S. Supreme Court.