OP-ED

Obamacare’s Other Benefit

If it is done right, the Affordable Care Act (a.k.a. Obamacare) may well promise uninsured Americans a lot more than cheap, reliable medical care. It can also open the door to the democratic empowerment of millions of poor people, who are often alienated from much of the nation’s civic life, by strengthening the organizations that give them a voice.

This year more than 30 million uninsured Americans are to begin signing up for Obamacare, but the vast majority of those eligible for either the expanded Medicaid program, or for subsidized private health insurance through state health exchanges, have no idea how to enroll. Surveys and focus groups have found that up to three-quarters of Americans who might directly benefit from the program are skeptical that the law can provide high-quality insurance coverage at a price they can afford.

This is dangerous, not only for their health but for the viability of the law. Many people think that with the Supreme Court ruling upholding the law and President Obama’s reelection, the Affordable Care Act finally made it out of the political and judicial woods. After all, the last few weeks have seen half a dozen Republican governors sign up their states for its expanded Medicaid coverage.

But confusion, fear and ignorance among millions of potential beneficiaries can still doom the reform. In California, nearly 7.2 million people — more than 20% of the population — lack access to health insurance. Most of these people are poor, and for many, English is their second language.

Obamacare’s success depends on maximum possible participation. If too few healthy people purchase insurance through the state exchanges, not only will the flow of premiums and subsidies to hospitals, doctors and clinics prove inadequate, but insurance companies, which will be prohibited from turning anyone away, will be providing coverage for too many of the old, the ill and the desperate. Insurance rates will skyrocket. Then the young and relatively healthy may drop out of the system, only to face a penalty — $695 a year for an individual by 2016 — a politically toxic burden.

The Affordable Care Act would implode.

The law’s stakeholders are well aware of this danger. Enroll America — a Washington nonprofit funded by hospitals, insurance companies and the pharmaceutical industry — will launch a media blitz this summer designed to explain how the new law works and what subsidies are available for working families.

In California, Covered California, the state health exchange, has geared up its outreach and publicity campaign, including an initial $43 million in grants to health clinics, community groups, trade unions and other nonprofits that have “trusted relationships with the uninsured markets that represent the cultural and linguistic diversity of the state.”

Covered California expects that by Oct. 1, when enrollment in health exchanges begins, they will have trained as many as 21,000 “assisters,” volunteers and employees of such groups. These people will knock on doors and sit around kitchen tables to guide the uninsured through the process.

Such hand-holding is essential because signing up for Obamacare will be complicated. Covered California and the other states’ health exchanges are creating streamlined Web portals, but the process of completing the template will be like filling out a tax return. And just as H&R Block has hundreds of offices and thousands of employees who guide clients through the tax preparation process, so too will the state exchanges need organizations and knowledgeable and trusted people who can make the process understandable and reassuring.

And here is where Obamacare’s peril turns into a promise of enormous social and political benefit. As the poor, alienated and fearful realize that tangible benefits can be won through their neighborhood clinic, civic group or local trade union, and are drawn into civic life and grass-roots action, these organizations that are essential to the health reform’s implementation will be strengthened as agents of civic engagement and citizen mobilization.

This is not a case of creating more voters who will support Obama because of Obamacare. This is a 21st century example of Alexis de Tocqueville’s 19th century observation that the health of American democracy depends on the vibrancy of numerous voluntary organizations.

In recent history, we’ve seen the way such groups feed activism and are fed by it.

This was the case during the Depression when national labor organizations and their local chapters pushed for new labor laws and then gave them a tangible reality as the locals burgeoned in workplaces across America, and in the years after passage of the 1965 Voting Rights Act, when African American churches, the NAACP and other civil rights organizations reached out to millions and brought them to the registrar’s office and the polls.

Likewise, activists from the women’s movement and the environmental community were indispensable when the laws they had helped push through Congress were put to the test in thousands of communities.

In California, Obamacare civic activism has the political and administrative wind at its back. But in Texas, Louisiana, Georgia and other Southern states, where the political establishment still stands in opposition to the healthcare reform law, the enrollment of the uninsured in federally run health exchanges will require some of the courage and dedication last seen in those precincts when civil rights workers sought to end segregation half a century ago.

The task will be difficult, but the payoff will transform far more than the American health insurance system.

Nelson Lichtenstein directs the Center for the Study of Work, Labor, and Democracy at UC Santa Barbara. This post originally appeared in the LA Times.

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23 replies »

  1. In reality, southern states receive more federal aid than all the other states. They are net “takers” not givers when it comes to federal dollars. And they complain all the way to the bank.

  2. Ohio just passed a law prohibiting anyone who is not licensed by the state to help Ohioans enroll in Obamacare and prohibits hospitals, civic organizations, etc. from helping. That law also states that no funds can be used to pay navigators except federal funds, which is barely enough for just one navigator per county. The Ohio Tea Party and GOP legislature is doing everything it can to sabotage the Affordable Care Act.

  3. “Obamacare’s success depends on maximum possible participation. If too few healthy people purchase insurance through the state exchanges, not only will the flow of premiums and subsidies to hospitals, doctors and clinics prove inadequate, but insurance companies, which will be prohibited from turning anyone away, will be providing coverage for too many of the old, the ill and the desperate. Insurance rates will skyrocket. Then the young and relatively healthy may drop out of the system, only to face a penalty — $695 a year for an individual by 2016 — a politically toxic burden.

    The Affordable Care Act would implode.”

    But this is guaranteed to happen.

    Look at the individual insurance prices in New York State, which already had nearly the same regulations as the Affordable Care Act had. $15,000 a year. It may drop as low as $12,000/year thanks to the mandate, but anyone sane will pay $700 a year in “penalties” rather than paying the $12,000/year.

    So, what happens after it implodes? Maybe we could get something sane like the Canadian system?

  4. “2) You currently have health insurance”

    No – I’m uninsured/self insured

    “3) You have a relatively firm grasp on the current healthcare system.”

    Being uninsured gives me a better “grasp” of the health care system than most insured.

  5. To your point, Peter1, The fact that you are responding to my post tells me:

    1) You are able to read and comprehend what you’ve read
    2) You currently have health insurance
    3) You have a relatively firm grasp on the current healthcare system.

    My guesstimate is that 70-80% of those currently uninsured do not possess those qualities.

  6. Pretty standard insurance app I’m thinking – not that bad. There is a page that generates quotes based on age with different deductibles. Not sure what the co-pays are. Rates seemed fairly good given it’s a high risk pool. Why is there separate rates for women – I thought they were supposed to not be rates separately?

    I wonder what the rates will be for the low risk insured once everyone is pooled together.

  7. “The tax deduction is greater in a high tax state than a low tax state.”

    If you mean “high tax” as in higher income the deduction is the deduction (per bracket) at least on the federal return. Figures for 2006 show Texas had 350,727 millionaires (27.7 per capita), only New York, Florida and California (almost double) had more.

    Figures from the the Chronicle of Philanthropy state the richer you are the less in percentage you give. It can also be argued that blue states are higher tax states and therefore provide the “safety net” through taxes not charity. Seeing that Texas has about 18% of it’s residents facing hunger and is in a group of southern states showing significantly higher than national average, I think the “charity route” is not the best solution.

  8. My comparisons were per capita. The tax deduction is greater in a high tax state than a low tax state. Giving in a high tax state will result in a greater net reduction of tax owed. Conversely, the value of the gift as gift is diminished by a like amount.

  9. “Texans give 25 percent more than California and more than twice as much as Massachussetts.”

    “#13. Texas
    Texans reported charitable contributions totaling more than $10.7-billion in 2008—third in the nation, behind California and New York. The state also scored well on contributions a typical household made as a percentage of discretionary income: 5.1 percent. Three of its cities rank high on the list of generous metropolitan areas: Dallas is No. 9, Houston (13), and San Antonio (19).”

    “The tax benefit of philanthropy in California and Massachusetts is much higher than the tax benefit in Texas. Factoring in the tax benefit differential, Texans give even more.”

    What do you mean by the benefit differential?

  10. Peter1,

    I was comparing philanthropy in Texas to less conservative states. Utah is hardly less conservative than Texas. Texans give 25 percent more than California and more than twice as much as Massachussetts. The tax benefit of philanthropy in California and Massachusetts is much higher than the tax benefit in Texas. Factoring in the tax benefit differential, Texans give even more.

    The facts you state are valid. Myriad are the reasons to live in Texas. Myriad are the reasons not to.

    My beef, as I have stated more than once, in this thread, is with a statement, made by the author, which ascribes mal intent and a certain mean-spiritedness upon a person and upon an entire cohort of people. This statement has no basis in fact.

  11. ” In Texas, there is less reliance on government provision of services and more reliance on the grass roots and not for profits.”

    Texas:

    Highest number of uninsured – 27.6 also refuses expansion of Medicaid.

    In 2008 at least it gave about 5% of salary to charitable organizations, about half of what Utah gave. But those donations are for people who can deduct those contributions from income taxes (is that really giving?).
    More info here:
    http://philanthropy.com/article/America-s-Generosity-Divide/133775/

    Texas is about middle of the road for unemployment.

    Texas is 4th in Toxic Chemical releases and at the top in most other pollutants.

    So what is Texas doing right?

  12. I don’t disagree with the substance of your editorial. I only disagree with your malignment of the people of Texas, Louisiana, Georgia, and the other southern states.

    The level of philanthropy and charitable giving in places like Texas vis a vis less conservative states is well documented. Different people in different places will differ on the proper means to redress problems which the working poor face. In Texas, there is less reliance on government provision of services and more reliance on the grass roots and not for profits. There is also a belief that a jobs producing economy and a low cost of living is the best hedge against the problems which are faced by the poor. The mere fact that a majority of the political class takes a position against a piece of federal legislation in light of other alternatives is not sufficient reason to engage in an ad hominem against the people of the whole region. I would imagine that when HHS finally does get around to implementing the federal health exchanges in the 35 states, you will find a considerable grass roots movement to assist people onto the exchanges.

    The states have no affirmative duty to assist HHS in the implementation of the exchanges. The view here, in Texas, is that insurance has traditionally been a state prerogative. If the federal government chooses to regulate and run it, so be it, no body will stand in the way. It might not be well argued how Perry actually feels about anything. Whether any one person or group of people hope it fails is impossible to know unless you are a mind reader.

  13. In a state like Texas, the governor is not just passively standing by, awaiting the promulgation of the regulations that will govern a federally-run health exchange. Perry actively opposes it and I think it might well be argued, hopes it fails. In this context, those who support the exchange and seek to enroll the poor and politically marginal, face opposition from a conservative political class. Hopefully, they will not require too much courage to do their work, but I would not be surprised if such is needed.

  14. You point out the factual, which no one, even in Texas, disagrees with, which is that Southern states are very low government service states. You don’t address the statement which has drawn my ire, “the enrollment of the uninsured in federally run health exchanges will require some of the courage and dedication last seen in those precincts when civil rights workers sought to end segregation half a century ago” That is a cheeky statement. Will the uninsured be barred at the door? Are there no charitable groups who will help.

  15. Sure, nearly twice as many states are opting for federally-run exchanges for a variety of reasons. Each state is different, although I don’t think anyone would believe that those policymakers opposed to the ACA are innocently waiting to be told what to do.

    It’s not ridiculous for someone to be led to believe that “special courage” will be needed in states with federally-run exchanges.

    I can provide at least one example instantaneously. Paul Levy recently highlighted the plight of the New Orleans Musicians Clinic here:

    http://runningahospital.blogspot.com/2013/03/keeping-new-orleans-musicians-healthy.html.

    I’ll direct you to this particular paragraph of their recent newsletter:

    “Concurrent with the abandoning of Louisiana’s statewide safety net hospitals, Governor Jindal is refusing to accept the federal expansion of Medicaid (Obama care). He has also proposed to the state legislature to increase Louisiana’s sales tax, inhibiting the working poor to afford medications and healthy food. Religious leaders from a cross-section of Christian faiths, including clergy from Baptist, Episcopal, Methodist and Unitarian churches from more than 70 Louisiana cities and towns signed the letter opposing the governor’s tax plan. Their letter states that even before Jindal’s proposed changes, Louisiana already has a regressive tax structure in which families earning less than $16,000 per year pay 10.6 percent of their income in state and local taxes, while families earning over $1 million per year pay 4.6 percent.”

    I can’t imagine that this will be the last example.

  16. You might try addressing my question: How does Professor Lichtenstein come to the conclusion that that it will take “special courage” for groups to assist the uninsured in obtaining coverage in states with federally run exchanges. Special courage? Really? Professor Lichtenstein makes this bald assertion with no facts to support it. Professor Lichtenstein reveals his personal prejudices.

    The Congress granted the states a choice of what type of exchange they would prefer to utilize. There are a total of thirty five states who prefer not to utilize state run exchanges. The majority of them are not in the south. These states are waiting for the administration to do what the law requires and come up with rules and guidance on how the administration plans to run the federal exchanges. I suppose when there exists a federal exchange in which to enroll the uninsured, then some “courageous” groups from the Civil Rights era will step forward to help enroll them. At that point, maybe Prof Lichtenstein will write another op-ed to inspire them. But in the meantime, one can’ t help enroll the uninsured in something that doesn’t yet exist.

  17. “If it is done right, the Affordable Care Act (a.k.a. Obamacare) may well promise uninsured Americans a lot more than cheap, reliable medical care.”

    It didn’t promise any of the above. It promised subsidies for people not able to afford coverage.

    “Americans who might directly benefit from the program are skeptical that the law can provide high-quality insurance coverage at a price they can afford.”

    I be one of those “skeptical”, especially since I probably won’t qualify for a subsidy. I’ll also wait and see what’s “affordable” against the plan benefits, co-pays, and deductibles.

    Another part of this is what pool potential buyers get put in. The one where all the other sick pre-existing sign up for is not going to be “cheap”.

  18. so, I agree – yes – this is a potentially great outcome – on the other hand, let’s not forget how stuff works – this guarantees that we’ll have special interests working against each other to control as much of that power as possible .

    which is how we ended up with our little healthcare problem in the first place.

    isn’t it?

  19. There is nothing to stop beneficent groups from assisting the uninsured to navigate the federal health exchanges in Texas, Louisiana, Georgia and other southern states. No state or local government, from the aforementioned states, is prohibiting this from happening. How do you come to the conclusion that only states with State-run health insurance exchanges will have non-state actors assisting the uninsured?

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