An American Sickness: How Healthcare Became Big Business and How You Can Take It Back

The Affordable Care Act (ACA, also known as Obamacare) was a landmark piece of legislation that expanded access to federal healthcare programs. It gave many Americans newfound access to lifesaving care with few barriers to entry. However, insurance providers have managed to exploit loopholes that exist within the law for their own personal gain.

Obamacare was meant to serve as a “first line of defense against the expenses of American medicine” (231) and incentivize healthcare providers to raise the standard of care for patients while cutting back on profits. A key provision of the ACA that has undoubtedly saved lives is one that bans insurers from denying treatment based on “pre-existing conditions.” Prior to the ACA, insurance companies broadened the definition of pre-existing conditions to include things as minute as taking an antidepressant. The ACA also caps an individual’s out-of-pocket spending at $6,850 for any in-network treatments, lists “essential health benefits” that all insurers must cover and forbade lifetime limits on insurance payments.

Obama had to make several concessions to ensure the ACA’s passage; he “cave[d] on anything that would directly limit the industry’s ability to profit” (231). While most of the programs had some noticeable good effects, the ACA was unable to meaningfully regulate the industry’s financial conduct.

Medicare Part D, which was approved by President George W. Bush, gave seniors the chance to opt into a supplemental program that offered them drug coverage through Medicare. The government included a specific Medicare provision for prescriptions to curb overpricing into the text of the supplement. It kicked in after seniors hit certain spending thresholds and was structured in a way that forced them to think twice about prescriptions they might not need. This was enforced via a provision where Medicare would not pay any costs exceeding $2,906, leaving that to the patient. Payments falling within this threshold are known as being “in the donut hole.”  

The drug industry began developing workarounds for Medicare Part D. Since the program ensured that seniors were only paying a copay for their medication, drug companies raised prices so that they would be over Part D’s specific coverage limit. Some seniors now find themselves spending more on medication than they were prior to Part D’s passage.

The ACA is slowly developing a donut hole problem of its own. The framers of the ACA wrote mandates that patients would only have to cover 45% of costs of drugs in the donut hole. The donut hole would also have to be sealed by 2020. However, manufacturers have already proven themselves adept at navigating legal loopholes, which possibly foreshadows trouble for the ACA.

Politicians, doctors, and insurers have all played a role in undermining the ACA. Medical PACs had a vested interest in driving down support for the ACA, and they pressured Obama to drop a key provision called the public option. The public option “refers to the notion that there would be on offer a national health insurance plan or that the government would allow anyone to choose Medicare as his insurer” (234). Many politicians, not wanting to upset the healthcare industry, pressured Obama to remove the public option from the final bill. Insurance cooperatives were implemented in its place. They were hurriedly formed, meaning that there was usually only one per state. Their size and public opinion also precluded them from having any significant bargaining power with hospitals.

Private insurers also moved to lessen the scope of the ACA. Many ACA plans offer ones with high deductibles, which led to an increase in their popularity. Insurers framed this development as good for patients, who would possibly be paying less under this arrangement. Due to the high prices of healthcare, policyholders with high deductibles were frightened of meeting them, and “avoided any interactions with medicine at all” (236). Insurers have also tried to lower the scope of doctors and hospitals available in their networks, intentionally choosing professionals with less experience. This can be especially disastrous for families with children that go out of state for college. “Hyperlocal” networks force college students to spend excessive amounts of money on specialists out of network.

Finally, hospitals and doctors exploited loopholes in the law to save extra costs. The financial incentives to follow the ACA’s standards paled in comparison to the money they could make by employing unconventional billing strategies that toed the boundary of illegality. Many doctors intentionally capitalized on the leeway they had in defining qualifiers like “preventative,” “covered,” and “no cost.” While this may not seem like the best strategy, the ACA does not offer specific ways to interpret these terms. Therefore, patients have little room to contest perceived misapplications of these qualifiers. This led to patients getting charged on technicalities, like offering free colonoscopies but billing for any polyps removed. Though most colonoscopies involve polyp removal, doctors were able to argue that this was an additional procedure.