Health Insurance Reform and You
Students Stand to Benefit From Obamacare
By Jacob Smith
The 2012 election will deeply affect the ability of every Kenyon student (and indeed every American) to have access to quality, affordable health care. From rules allowing young people to stay on the parents insurance, to the future of covering preexisting conditions, nearly every issue related to health care is at stake in this election. Therefore, it is the responsibility of every Kenyon student to understand this issue and examine the real-life impact of the health care plan (or lack thereof) of both parties. It is apparent that the 2010 Patient Protection and Affordable Care Act (aka “Obamacare”) presents the best and only real alternative to the problems of the current health system.
Before the passage of the ACA, employers differed greatly in how long young people were allowed to stay on their parents’ plans. While some plans allowed students to remain covered for several years after turning 18, many of these required that students remain in school in order to be covered. Any lapse in full-time college attendance (even due to sickness) would be shortly followed by a termination of health insurance. The ACA allows young people to have the peace of mind that they will keep health insurance until age 26, assuming their parents remain employed. Indeed, students can now focus on achieving long-term goals after graduation that may not come with immediate employer-provided health insurance without the worry that they will lose their health insurance upon graduation should they not find work or not continue with their schooling.
Perhaps the best measure of the success of this regulation is the increase in the number of young people ages 18-25 who have health insurance. According to a recent report, 2.5 million additional young people in this age bracket gained health insurance as a result of this rule. This is not just good for young people, however, as it prevents greater health costs in the long run. Many of these young people would either choose not to purchase health insurance or be unable to afford health insurance without this rule. As a result, many of them would only show up in emergency rooms after they get really sick, passing costs on to everyone else in the form of higher premiums because they are unable to afford the out-of-pocket cost of these surgeries.
Also at stake in the next election is how preexisting conditions are handled. Under the ACA, pre-existing conditions must be covered for all adults starting in the year 2014. Pre-existing conditions must already be covered for all children and adults with these can get currently obtain coverage through state-based high risk pools. Pre-existing conditions may not be on the mind of most Americans, but chances are pretty good that either you or someone you know has one. Indeed, a recent report suggests that half of all Americans have pre-existing conditions, including 129 million people under the age of 65. If the health care law were to be repealed, millions of Americans with conditions ranging from asthma to cancer could be denied or dropped from health insurance right when they need it most.
Some argue that the free market will naturally solve all problems related to health care, but this is simply not the case. The free market can potentially reduce some health costs by introducing efficiency, but this effect is limited due to the unique nature of health insurance. For example, competition is good in most areas of the economy and helps reduce costs. In health care, however, the more insurers there are the smaller each company’s pool of insured persons will be; in health care the size of the insurance pool is negatively correlated with cost. While increased competition may reduce costs up to a point, costs increase after the number of insurers grows too large due to the diminished size of each company’s pool. The free market also makes it difficult to insure those who need insurance most: the sick. The free market operates on the idea that there will be “winners” and losers,” which is more acceptable in other areas of the economy. For example, one who cannot afford an expensive new car can buy a used car or use a different, substitute mode of transportation. But what substitute exists for a heart or a liver? Quite simply, leaving health insurance to the free market alone guarantees that some people will not have access to health care.
While some might not be convinced by this plea to justice, perhaps the monetary costs of health care speak louder. With health premiums rising every year, the ACA finally tackled the issue of cost. Repealing the law, according to the non-partisan Congressional Budget Office, would increase the national debt by 210 billion dollars over the decade. No other plan comes close in either increasing coverage or reducing costs.
As it is the only real reform effort on the table, the ACA must be defended and fully implemented. It is clear that millions of Americans, including most if not all Kenyon students, will see significant benefits from this law. Republicans in Congress claimed that they would “replace” the ACA with something better, should they repeal the law. Americans should question whether this will actually happen, however, as no plan has been offered since every House Republican voted for repeal one year ago. In the face of decades of inaction, the ACA offers hope to millions of Americans and will improve American health care.