Bad News

The recently signed health-care legislation will have lasting consequences on health care in America. The massive two-piece package includes federal control of benefits, increased taxes, mandates on employers and individuals, and an expansion of costly and inefficient entitlements.

This represents a federal takeover of the U.S. health care system on the pretext to meeting the needs of the millions of Americans who are currently uninsured. However, in a recent paper, Heritage’s Kathryn Nix writes:

This ‘reform’ will result in less choice and competition for health care consumers and, although more Americans will be ‘covered,’ the quality of this coverage will decrease. Moreover, certain provisions of the new laws will make obtaining health insurance less desirable by increasing costs, causing even more Americans to drop or lose coverage.

According to the Congressional Budget Office, the new law will provide coverage to 32 million by 2019, but will still leave 24 million Americans uninsured. This is a far cry from universal coverage. For those who become newly insured, Nix argues Obamacare falls short of fulfilling its promises to the uninsured because it:

Dumps millions into Medicaid. “In order to cover low-income uninsured citizens, Obamacare expands eligibility for Medicaid…[which] is a low-performing, low-quality federal program that fails to meet the needs of its beneficiaries. For example, Medicaid’s failure to cover the cost to providers of seeing Medicaid patients has greatly reduced the number of doctors who will see Medicaid patients.”

Will raise premiums, discouraging coverage. “A guaranteed-issue provision will allow Americans to wait until they are sick to seek out insurance, causing insurance premiums to soar. The individual mandate is intended to combat this by forcing Americans into the insurance market before they are sick. However, since the individual mandate penalty will be significantly less expensive than the cost of an insurance plan, this provision will not achieve universal coverage, and insurance risk pools will begin to consist more exclusively of only those who need insurance the most: the sick and the elderly. Younger, healthier Americans will likely choose to pay the penalty, purchasing insurance only if needed.”

Will cause millions to lose their current coverage. “The ranks of the currently uninsured will not simply be reduced by the new law. Rather, as millions of Americans find themselves newly covered, a substantial number will also find that they will lose the coverage they currently carry as a result of the health care overhaul. According to the CBO, 8–9 million Americans that currently receive employer-sponsored coverage will lose it. Of these, 1–2 million would go from receiving coverage from an employer to obtaining coverage through the exchanges.”

Resorting to mandates, government handouts and poorly functioning entitlement programs to increase coverage will do nothing to improve the health care quality of the uninsured. Though millions Americans will gain coverage, it will not necessarily be the private coverage they want, and it will come at a high cost. Heritage already projects a huge expansion in Medicaid.

Rick Sherwood currently is a member of the Young Leaders Program at the Heritage Foundation. For more information on interning at Heritage, please visit: