The Truth About “Obamacare.”

Once again, Democratic Perspective visited with Dean Baker, co-founder and co-director of the Center for Economic and Policy Research. This time, the topic was the Patient Protection and Affordable Care Act (PPACA).

We began by asking about the benefits of the new law. Baker responded, “There’s not a lot of understanding of what’s in it. Part of it is that most of it doesn’t actually take effect until 2014. But there are a few things that have taken effect already. Insurers have to allow kids to stay on their parents’ policy until they’re 25. There are a couple of other things. But the brunt of the bill is that it is going to extend coverage to somewhere on the order of 30 million people.”

“It will set up exchanges at the state level,” he continued. “You’ll be able to go online, plug in information about your family and get a list of policies. There will be subsidies for low and moderate income people to make it affordable and there’s this mandate. You’re required to have insurance or you can opt out and pay a fine (tax).”

“In my mind, the most important thing is that it requires that insurers cover people regardless of pre-existing conditons,” said Baker. “This is absolutely huge. What Obamacare does that I think is so important is that, if you’re insured, you’re always going to pay at standard insured rates. They’re not allowed to discriminate against you if you have cancer or some other condition.”

As for the timing of the bill, Baker said, “I think it’s unfortunate from President Obama’s perspective that he’s running for re-election and people still don’t understand what it is. If it had taken effect in January of 2012, people would understand what it is. A lot of people may not like it, who knows? But at least they’d understand it.”

When asked why there is a mandate to buy insurance, Baker replied, “There’s a real logic to this. The problem is if you don’t have something like the mandate, when I’m in good health, why should I waste my money on insurance? Then, if it turns out next year that I get a serious illness, I’ll buy insurance. But if everyone does that, then the market collapses.”

Asked to comment on a similar law that Mitt Romney signed into effect in Massachussetts, Baker responded, “It covers 95 to 97%. If Governor Romney wanted to run on that, he’d have a good story to tell.”

The Supreme Court ruled that states will have the ability to opt out of the portion of the law that expands Medicaid. “I think it’s unfortunate that the Supreme Court ruling allows this,” Baker said. “But obviously most states are not going to opt out. The ones that do, in time, are probably going to change their minds because they’d be throwing a lot of money in the toilet. The same thing happened with the original stimulus in 2009. There were a number of Republican governors who said we’re not going to take this money. Almost all of them turned around subsequently and took it. There aren’t a lot states sitting around with big piles of money. So here’s the federal government prepared to give you money…and it’s pretty hard to say we don’t want it. Give it to another state.”

As to the Republican charge that Obamacare is going to hurt Medicare, Baker responded “What Obamacare does with Medicare is that it does try to keep the program intact. One of the things that Governor Romney really hasn’t explained is that he says that he’s not going to have the cut and savings. But if he doesn’t do that, the program is going to face a shortfall beginning in 2016. So if he becomes president, in his first term in office, he has to do something.”

“What President Obama’s program does is that it cuts back payments for drugs to hospitals,” Baker continued. “This was actually negotiated in the process. He brought in the drug industry from the very beginning. He brought in the hospitals from the very beginning. These were cuts that were negotiated with the providers and the idea was that Medicare would continue to provide the same service, but they would be paying somewhat less to providers and drug companies.”

“It extends Medicare to 2024,” Baker stated. “It’s kind of funny, Republicans say, ‘What’s your plan to keep Medicare solvent?’ But Obamacare extends the program by 8 years. More importantly, it has a 75 year horizon and it reduces the shortfall over that horizon by about two-thirds. So to say that he hasn’t done anything, well, he eliminates two-thirds of the shortfall. That’s a pretty good start.”

“Obviously, we have to do more. But one thing you have to keep in mind; we spend more than twice as much per person than the average for other wealthy nations. We have very little to show for that. We don’t live longer. Our life expectancies are near the bottom. Infant mortality rates are near the top. So we have an enormous amount of waste in the system. This is a step toward reducing it. No doubt, we have to go much further. I think anyone would have to agree with that. But it’s a little odd for the Republicans to be blaming President Obama for not having solved all the problems. He certainly has done more toward that than any president since Medicare first came into existence.”

When asked why Democrats haven’t publicized the benefits, Baker responded, “Well, there are all sorts of things that have been printed on it. At this point, we’re a year and a half out from the main provisions taking effect – about 15 months at this point. There are a lot of reasons to think that it’s going to be very good. Again, we have to move forward because we’re paying way too much for our healthcare. It does some things to contain costs which are way out of line with the rest of the world so we have a long way to go.”

“I give Obama a lot of credit for getting this through,” Baker stated.

As for other aspects of the bill, Baker said, “A lot of people got checks, and I was one of them, from the insurance companies because they are required to spend at least 80 percent of premiums to providing care. There was something like 5 million people around the country who got those checks.”

“Obamacare will have no caps on lifetime care,” he continued. “There are a lot of other provisions. Most of the things people agree with. “I think it’s a bill that will extend insruance coverage to most of the people who are not insured.”

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