A dose of reality on 'Obamacare'

As Australians it can be hard to understand what Americans have against universal health cover. It is not all of them to be fair. I know many who constantly ask me why Australia has it so good. It is a good question when you think Americans are spending more on health care than anywhere else in the world.

The latest health data from the OECD (the group of 34 market-based economies) shows that Americans fork out 17.7 per cent of GDP on health care costs compared to Australia, which spends about 8.9 per cent.

And while US taxpayers are coughing up almost $US4 billion a year per capita, they are getting nowhere near the amount of subsidised health care you receive in Australia, which is spending a little under $US2.5 billion per capita.

Is it that Americans are seeing the doctor more often? It’s definitely not that. The average American will see the doctor about 4 times a year compared to the average Australian who, surprisingly, the OECD says will go almost 7 times a year.

Americans will spend two extra days in hospital than the average Australian per year but it will cost them around $US16,000 for a seven-day stay compared to an Australian who will be out in five days at a cost of around $US7000 – much of which will be covered by insurance.

That’s not to mention Americans will have to spend about $947 a year on a per capita basis to fill their prescriptions, almost double the $503 Australians would spend.

Yet despite the high costs you are still three times more likely to die under the age of 39 from an asthma attack or to have a limb amputated from diabetes in America than you are in Australia.

How can it be that Americans spend more than anyone else on their health needs and yet most won’t live past 79? If you are lucky enough to be Australian, Canadian, Israeli, Korean or from pretty much anywhere in Scandinavia you will spend far less on health care and will still live to see 80 and beyond.

The latest debt ceiling debacle put America’s Affordable Care Act, otherwise known as ‘Obamacare’, front and centre. Republicans were so determined to defund the already-passed legislation that they actually shut down the government.

The Affordable Care Act, which is the biggest piece of legislative reform in the US health care sector in decades, will do a number of things.

Firstly, it will stop insurance companies from excluding people from coverage who have pre-existing conditions.

Secondly, it will allow young people to stay on their parents’ health insurance plans until they are 26.

Thirdly, it will require businesses with companies of 50 employees or more to provide them with health cover.

Fourthly, it will increase the amount of people eligible for health care subsidies and assist those who can’t afford health care to get coverage. Those individuals with annual incomes greater than $US200,000 and couples with a combined income above $US250,000 will pay higher taxes to help cover the costs of the program.

Given that 80 per cent of the 316 million people living in America already get health care through their employer, it is really only about 30 million Americans who the Affordable Care Act is targeting.

The reason for the resistance from some Americans to embrace Obamacare is an ideological one. They do not believe it should be up to the government to tell them what to do, whether that is regarding their right to own a gun or forcing them to purchase health insurance.

A recent segment on comedian Jimmy Kimmel’s show saw Americans on the street asked whether they were in favour of Obamacare or the Affordable Care Act. Of course, they are one and the same thing. But watching Americans so resolute about something they don’t understand is always funny. 

As you can imagine it didn’t stop most respondents voicing their flat-out refusal to accept ‘Obamacare’. However, when they are asked about the individual proposals of the health care law many are in favour.

Since the Affordable Care Act will ensure that 95 per cent of US citizens and legal residents have health insurance, preventative health care is set to become more accessible. Not only that but increased access to preventative health care will bring down costs significantly and hopefully see Americans living as long, if not longer, than their Western counterparts.

The Congressional Budget Office also estimates that the Affordable Care Act will reduce the national budget deficit by $US143 billion by 2019.

US President Barack Obama hasn’t helped his cause however by oversimplifying the scheme and producing a website for his key initiative that can accommodate about four people at a time… and even then only if the hamsters run the right way around the wheel.

The HealthGov website has been a joke since registration opened on October 1. How big of a joke will be gauged next week when the first figures on how many people have enrolled are made available.

The US government hopes to have 7 million people signed up for health insurance by the end of March. If next week’s figures are not encouraging due to the high volume of traffic to the website then expect that target to get pushed out.

Americans are also upset at Obama for promising that they would be able to stay on their current health care plans. Yes, anyone with an individual policy dating back more than three years can keep it, as long as it hasn't been changed by the insurance company. But about a million Americans have received letters informing them that their plan will change or be discontinued. This is largely because the policy offers substandard coverage that won’t meet their health care needs and puts people at risk of bankruptcy from hospitalisation.

But these mistakes don’t mean that the US government should abandon efforts to fix America’s broken health system.

Where the big test for Obama will come in selling the Affordable Care Act is to ensure that young and healthy people sign up. If they don’t then insurance companies won’t make as much money and will set higher rates next time around.

If that forces health care costs up further than Obama’s legacy will be left on life support.

Mathew Murphy is a Walkley Award winning journalist based in New York.