Obamacare – what is all the hoopla about?

Read more about the much debated Obamacare and the implications it has for American people.

By: Nirmalya Dutta | | Updated: October 2, 2013 10:42 am

The world’s most celebrated democracy reached a spectacular logjam on Monday after a stand-off between Republicans and Democrats over President Obama’s signature Affordable Care Act which has been dubbed Obamacare. The Republican-controlled House of Representatives would not pass spending measures for government operations unless the President made some changes to his healthcare reforms.

Understandably, the White House refused to give in to those demands with US Senate Democrats late on Monday rejecting a last-ditch proposal by the House of Representatives Republicans to establish a negotiation panel to work out a deal on the emergency spending bill. Basically, the Congress needed to agree on the budget by October 1 failing which a shutdown would be ordered.

However, the interesting part is that even a shutdown can’t stop people from signing up for Obamacare, the most extensive overhaul of the US healthcare system in 50 years on Monday. Vice President Joe Biden and Health and Human Services Security have been urging people to sign up for the program. Even the President had his say.

Despite the shutdown, the new health insurance marketplace opens for business as planned on October 1. #GetCovered

— Barack Obama (@BarackObama) October 1, 2013

It’s estimated that 7 million will sign up for health coverage for 2014 while another 8 million are expected to receive benefits through the government’s Medicaid program for the poor.

Why are the Republicans and others opposed to it?

Republicans and others have been opposed to this law because they believe it as government intrusion to oversee healthcare services which will place a financial burden on many individuals and businesses. It has also received widespread opposition from many youngsters in the 18-34 age-group who believe it will place the burden of expense on them whilst they don’t use its benefits as much as older people who suffer from more ailments. Republicans argue that provisions in the bill is hurting people, with employers switching to part-timers to avoid giving health insurance and rising taxes for younger Americans who’re already reeling from the downturn in the economy .

At the core is a ideological clash between what Obama’s socialist reforms want and America’s view of freedom and individuality. The USA was built on the foundations of free will, where individual choices are of paramount importance. Thus many see Obamacare as something that’s being forced onto them. It’s seen by many as an intrusion into their lives and choices, something fundamentally opposed to the American way of life. The fact that any individual without medical insurance as of Jan 1, 2014 will have to pay a fee along with their income tax only aggravates the aforementioned feeling of intrusion.

What is Obamacare?

In 2010, the Affordable Care Act became law and was in fact, modelled after Romney Care (Obama’s main opponent in the 2012 election), a healthcare reform implemented in the State of Massachusetts. The United States of America is the only advanced economy in the world where healthcare isn’t provided by the State. All other advanced economies have a socialist healthcare system like the UK’s NHS where people are taxed and everyone is provided with basic healthcare services.

A comparison of GDP spends actually shows that while the US spends 15.2% of its GDP on healthcare, France and UK’s meagre spending of 11.2% and 8.4% helps reach out to more people. While these nations’ healthcare systems reach out to its entire populace, the US has around 44 million people who are unable to get health insurance. Obamcare will allow people making less than four times of the Federal Poverty Level to shop for healthcare in a ‘Health Insurance Marketplace’ or exchange. This limit is around $46,000 for individuals and $93,500 for families per year. (Read: Obama defends Obamacare)

What India can learn from Obamacare?

There are two kinds of healthcare systems in the world – capitalist or socialist. The US system is the biggest capitalist system while France, UK and the rest of Europe are the forerunners of the socialist system. In the first category, most healthcare resources are owned by private entities and in the second the state owns the resources, taxes the citizens and provides them healthcare.

There’s ample evidence to provide that the second system works better because even though the US spends more per cent GDP on healthcare than any other country, the facilities aren’t available to all, whereas UK’s National Health Service or France’s system which was deemed by WHO in 2000 to be best in the world. The success of the latter is based on the fact that most European countries have universal healthcare despite spending less than the USA (USA – 15.2%, France – 11.2%, UK – 8.4%).

India sadly has a healthcare system similar to the US, in fact far worse than theirs. While the US spends, 15.2% of its GDP on healthcare, we spend only 4.1% out of which 70% is spent by people. Other similar economies like Brazil and South Africa (two of our BRICS neighbours), spends around 9% of their GDP. The problem is compounded by the fact that the private sector spends in India is more than double that of the government spends (a trend unique to India) which suggests that it’s the absence of government healthcare which forces individuals to spend money out-of-pocket.

This hurts people even more and it’s estimated that health spends forces 39 million people each year into poverty which reflects in our nation’s woeful health stats. The latest figures from the UN suggest that India still accounts for one of every three maternal deaths. Most of them are due to complications like severe bleeding after childbirth, infections, high BP during pregnancy and unsafe abortions. As per latest UN figures, India accounts for one-third of deaths of pregnant women, mainly due to complications such as severe bleeding after childbirth, infections, high blood pressure during pregnancy and unsafe abortion.

We could sure do with a health insurance plan like Obamacare and universal health coverage to alleviate our healthcare woes. Till now, most schemes look to target the poorest of poor, like the NRHM and the RSBY (a national health insurance scheme) and there’s no argument against that considering it’s the poorest who need healthcare security the most. But universal health insurance system, where every individual’s taxed for it might not be such a bad idea at all but considering our government’s track record of spending public money, it would be optimistic to the point of foolishness to expect something similar. (Read: Ten questions you should ask your health insurance company)

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Published: October 1, 2013 4:00 pm | Updated:October 2, 2013 10:42 am

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