Instead of offering an alternative to Obamacare during the debate, Governor Romney offered inaccuracies (and in some cases outright lies) about Obamacare. This post addresses only a few of those (future blog posts will address others):
Romney claimed that Obamacare is a government takeover. This is not true. Under Obamacare, private health insurance companies -- not the government -- will be providing health insurance to most Americans. Some Americans will receive medical coverage through a public program; Obamacare expands Medicaid to cover more low-income Americans. But in many states, even Medicaid is provided through private companies.
Far from taking over the market, Obamacare relies on competition. Under Obamacare, consumers will be able to choose their insurance company and the type of coverage that best suits their needs. And because insurers won't be able to reject consumers because of preexisting conditions like they do in most states today, Obamacare achieves near universal coverage for all Americans through a competitive market. Obamacare doesn't take over the private market -- it just makes the private market work better for the American people.
Romney claimed that insurers will compete for sick people. Just the opposite is true. Insurers seek to avoid covering sick people because of fear of insolvency and a desire to maximize profits.
Obamacare ensures through personal responsibility that all people buy coverage, not just sick people. Through risk-adjustment and reinsurance, Obamacare ensures that no one insurer will be disadvantaged and that no one insurer will end up with all sick people.
Repealing Obamacare would mean that insurers in most states will continue to be allowed to deny coverage to people for any reason. Obamacare requires insurers to cover all comers. Also before Obamacare, in many states, insurers retroactively canceled people when they had claims -- a practice called rescissions -- by claiming errors on insurance applications. Obamacare prohibits rescissions now, and starting in 2014, will prohibit insurers from rejecting people with past, current, or potential future medical claims.
Obamacare creates an opportunity for insurers to compete based on quality and efficiency, not on their ability to cherry pick healthy people to insure. At the same time, Obamacare prohibits discrimination against people in rates (it prohibits insurers from charging people with medical conditions or women higher premiums) and requires insurers to provide real benefits (so families aren't forced into bankruptcy because of medical bills).
Romney claimed that repealing Obamacare won't affect kids who are on their parent's policies. He said that the private market is already covering adult children. It is true that employers and insurers are covering adult children but that's because Obamacare requires it. And Obamacare changed the tax code to allow positive tax treatment of premiums necessary to keep non-dependent children on their parents' policy. Repealing Obamacare will raise costs for families keeping their non-dependent children on their policies. So even if -- a big "if" -- insurers voluntarily keep offering coverage for children up to age 26, it will cost families more because the preferred tax treatment will be repealed.
Romney said health care reform can be done state-by-state. In reality, some states have tried. But a state can't effectively reform its market without a federal partnership. Even Romneycare in Massachusetts relies on a significant infusion of federal dollars, without which it would fail.
Importantly, federal laws like ERISA preempt states from reforming their entire market. Obamacare addresses this by extending consumer protections to people in group health plans regulated only under ERISA. Romney's proposal to repeal Obamacare would eliminate these consumer protections.
Another big problem is affordability. Premiums are just too high for most people and families. States cannot provide sufficient tax credits to help people afford premiums and help people to pay for out-of-pocket costs. The few states that have tried to provide tax credits to make premiums more affordable did not have the necessary resources to help all individuals and small businesses. Obamacare provides the necessary partnership -- a real commitment to help people afford coverage through premium tax credits and help for deductibles and other out-of-pocket costs.
Through marketplace exchanges, tax credits that lower premiums, and tax assistance for out-of-pocket expenses, Obamacare ensures that middle class and moderate income Americans will be able to afford the insurance they need to keep their families healthy and financially secure.
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