Obama Health Care System: Overview

Sarah Ayachi

Summary « Going public and private » The Economist, Dec 2013

Inspite of being criticised by some Americans, the Obamacare reform is undergoing many questionning, especially in terms of its deep status, tending to a larger privatisation. Firstly, the Obamacare system is knowing a certain craze, in particular through its website, where health transactions can be carried by the citizens. However, due to a non efficient software, the public healthcare insurance remains outstriped by the private insurers. The issue is showing that the Obamacare system will have to provide a larger part of the population. Indeed, two groups of Americans citizens are concerned by the reform: the elderly with Medicare and the poors with Medicaid. The number of both population is tending to increase by nearly 30% by 2012, and the government will have to find solutions to adapt to this demographic swath. The deal which will be at stake for the American citizens is that they would pay more taxes, in order to balance the huge health spendings engaged by the government. This would draw a new situation between the State and the private insurers, which would predomine on the healthcare market. More concretely, the Obamacare system is far to be sufficient for the citizen's fees. To complete the reimbursement necessary for the majority of care and medication, they have to add an additional private insurance. Furthermore, with the aim to control their healthcare spendings, more and more elderly Americans want a “Medicare Advantage” plan, or more precisely, a new system based on getting a private insurance that would cover most of the fees, whereas the government would pay for the premiums. Between 2006 and nowadays, the proponents for this new option have passed from 16% to 28%. The result of this change would clearly benefit the private insurers, which revenues would raise by $50 billion a year by 2019. The phenomenon observed is just that the privatisation of Medicaid is getting more and more important. Now, 75% of all Medicaid patients are suscribers of a private insurer. Inevitably, the winner between the State, the citizens and the private insurers will be the last one, even if the citizens will have now have the opportunity to choose the health plan. The revenues of the privatised part of Medicaid will then reach $420 billion by 2019. The example of Arkansas, developping a voucher system, is the objective envisioned by the Republicans in matters of healthcare. But among all that, the private insurers are fearing from governamental potential decisions planning to establish fixed fees instead of the existing medical costs. The private insurers'business is now depending on the further state's positions regarding healthcare, which will decide for the future of one of the biggest investor in the stock market.