US President Barack Obama’s landmark healthcare reforms were to take effect yesterday, granting coverage to millions of previously uninsured Americans after nearly four years of bitter wrangling that has loomed large over the US political landscape.
Since the Affordable Care Act, or “Obamacare,” was passed in 2010, the legislation has survived multiple repeal attempts by Republican lawmakers, a US Supreme Court hearing and a disastrous rollout of the Web site set up to assist the launch of the legislation.
However, as of yesterday, it will be illegal for insurers to deny coverage because of pre-existing conditions or to limit the level of annual reimbursements for essential services — practices in the past that had left some patients facing financial ruin.
Under the Affordable Care Act, it will now be mandatory for any US resident to enroll in a healthcare plan.
Failure to do so will be punishable by a US$95 fine, a figure that will later rise to US$695.
The economic reasoning of the legislation is that if everyone contributes to the system, the premiums paid by healthy people should offset the additional costs associated with the US citizens who are the most costly to insure. In a significant first, the new legislation defines treatments that insurers must cover. All insurance must now include cover for hospitalizations, including emergencies.
And preventative care — such as screenings for diabetes or cancer, vaccines or contraception — should also be fully reimbursed.
“The new law is transformational for our entire healthcare system,” US Secretary of Health Kathleen Sebelius said on Tuesday.
For the estimated 150 million Americans who are insured through their employers in the US, where only the poorest and those over 65 are insured through Social Security, there will be little or no change.
However, about 25 million people insured individually through private insurers without the benefit of group rates stand to benefit.
From now on, they will be able to browse and choose different plans from the federal government Web site Healthcare.gov, which is being used in 36 states.
Fourteen other states have created their own versions of the site.
The government has set a target enrollment figure of 7 million people by the end of March. So far, 2.1 million individuals have signed up for insurance through the Web portals.
The figure is way down from initial projections, something officials have blamed on the disastrous problems that paralyzed Healthcare.gov after its launch in October last year.
Last month witnessed a sharp acceleration in registrations as the system improved. Added to the 2.1 million who have registered are a further 3.9 million who are eligible for programs for the poor, including Medicaid. The US government has not disclosed how many of the 6 million beneficiaries of the new system were previously uninsured — a key number that will determine the success of the reforms.
In total, about 50 million Americans are living without health insurance.
Observers are also waiting to see if young adults will enroll in the scheme, something which is crucial to its success.
Tony Carrk, of the left-leaning Center for American Progress think tank, said he expected young people would sign up as the March 31 deadline loomed.
“What we know from prior experiences with Massachusetts, the young people are most likely going to wait until March to sign up, toward the end,” Carrk said, referring to a universal healthcare plan introduced in 2006.