In light of the Republican takeover of the White House, the Senate, and the House of Representatives this year, the Affordable Care Act has resurfaced in the news as one of the top targets for GOP leadership to repeal and replace. In this piece from the archives, alumnus Evan Draim ‘16 examines the flaws of the legislation once again under debate.
Imagine you are the head of a bicker eating club, tasked both with serving the interests of your members and contributing to the overall social scene at Princeton University. You love hosting parties at the clubhouse on Thursday and Saturday nights, but limited space and resources only enable you to admit a limited number of students at a particular time. Hence, the pass system is born. While not as comprehensive as full membership in the clubs, passes allow underclassmen to experience and benefit from their social value on appropriate nights. Eventually, after working their way up the college hierarchy, underclassmen will be able to become full-members themselves as juniors or seniors.
Now, imagine President Eisgruber – in the spirit of fairness – mandated that bicker clubs must invite all underclassmen on nights when they have public parties. As an underclassman myself, I admit that such a proposal sounds amazing on face value. No more begging upperclassmen friends for their help! No more pleading with burly bouncers at the door! No more separating from friends who cannot get into the same clubs!
However, from your perspective as head of a bicker club, such a mandate would be a disaster. After all, your house is not infinitely spacious and has a limited supply of alcohol (extensive, but still limited)! Realizing that your club is one of the most popular spots on campus, you come to the conclusion that you could not sustain your current level of access throughout the rest of the year. Therefore, the bicker club is forced to hold mostly “members only” parties (thereby skirting the administration’s restrictions on “public” gatherings), and underclassmen are left to wander the campus looking for any viable social gathering or, if all else fails, head to Quad.
While – fortunately – that scenario will likely never occur on the Street, a situation very similar to it is threatening to paralyze both the American job market and health care system at a time when hundreds of Princeton students are preparing to graduate. Currently, 96% of companies in the United States with 50 or more workers pay for their employees’ health insurance. While these plans are not perfect (just like the pass system that most Princeton undergraduates have to endure), they are usually comprehensive enough to fulfill the workers’ basic needs. Plus, if workers stay at the company long enough, they may be able to gain a promotion that includes a more comprehensive insurance package.
In 2010, President Obama signed the Affordable Care Act into law, and the legislation (after numerous delays) went into effect this year. In the spirit of “fairness,” the President’s law mandates that businesses pay all the costs of their full-time workers’ health insurance (as most already do) but also cover additional items in order to be approved (e.g. maternity and newborn care, mental health and substance use disorder services, behavioral health treatment, contraceptives, and vision care). On face value such additional coverage might initially seem beneficial (although probably not all necessary) to the workers affected.
However, from a business’ perspective, the Affordable Care Act represents a major new burden at a time when many companies are still recovering from severe economic downturn. Just like eating clubs, companies only have a limited amount of resources. If they wish to maximize profits – the goal of any private firm in the free market – they cannot afford to offer all their current employees health insurance under these new, more expensive guidelines. Therefore, since the law’s passage, many businesses all across the country have decided to downgrade employees from full-time to part-time (thereby avoiding the administration’s restrictions on insurance for “full-time” workers) or to lay off employees entirely to avert these additional costs. In a Gallup poll conducted in June, 41% of small businesses said they have frozen hiring because of the new legislation, and 19% confessed to having already laid off staff in anticipation.
Despite President Obama’s repeated claims that no American would lose his or her current insurance policies under the Affordable Care Act, by forcing businesses to cut workers’ hours or eliminate their jobs entirely, the law actually puts the healthcare plans of millions of Americans who rely on business-sponsored insurance in jeopardy. Both the hypothetical reform to the eating clubs mentioned above and President Obama’s healthcare reforms have one, main underlying theme: what was initiated as a plan to expand benefits among a particular group ends up eliminating the source of those benefits for many of the same people it was intended to help.
Young workers are the most susceptible to the layoffs or reduction in hours brought on by Obamacare’s implementation since companies are less likely to punish their more veteran employees. Although Princeton students develop skills more suited for white-collar jobs after graduating from college or graduate school, those positions are still susceptible to the negative effects of the Affordable Care Act. For instance, the United Parcel Service recently cut spousal benefits for 15,000 of its management level jobs.
Princeton students hoping to enter the medical profession should be especially worried. In order to fund Obamacare, over $700 billion will be shifted out of the Medicare program, and a 2.3% excise tax will be placed on the sale of medical devices. Cuts in Medicare will surely force the program to slash its most prominent expenditure, reimbursements to doctors, thereby forcing those individuals to accept a major pay-cut or drop Medicare recipients altogether. The Center on Budget and Policy Priorities describes the medical devices tax as applying to a wide range of items, including “surgical gloves, wheelchairs, coronary stents, artificial limbs, defibrillators, cardiac pacemakers, irradiation equipment, and advanced imaging technology.” Although these costs are initially borne by hospitals and passed on to consumers, doctors employed at those institutions could experience a drop in salary as well due to the added costs imposed by the tax.
Without businesses willing to fund their workers’ health insurance, what happens to these employees? Well, like the underclassmen displaced from eating club parties wandering the Princeton campus, those individuals are forced to explore the healthcare market for other alternatives.
Proponents of the Affordable Care Act continually remind us that students can remain on their parents’ insurance plans until the age of 26. However, health insurance gets much more expensive as the consumer ages. Therefore, waiting five years to purchase your own insurance plan rather than locking down a lower rate immediately out of college is financial lunacy. In many cases, an individual’s parents might have already been laid-off or lost their insurance policy through a reduction in hours. Plus, what self-respecting Princetonian wants to continue depending on their parents for health coverage after they are completely done with school?
According to President Obama and Secretary of Health and Human Services, Kathleen Sebelius, students and younger Americans should join state healthcare exchanges facilitated by the Affordable Care Act. Indeed, the White House has recruited many Hollywood celebrities to promote the law to American youth over the past few months, including Amy Poehler, Michael Cera, and Jennifer Hudson. For a while, the Department of Health and Human Services was in talks with professional sporting leagues, including the NBA and NFL.
However, this intense publicity campaign is not meant to educate younger citizens about what would be in their own financial interests but instead to make the Obamacare system feasible. Indeed, this system of state exchanges depends on the participation of young, healthy adults in order to subsidize the immense cost of caring for aging, ailing Americans. The National Center for Public Policy Research concluded earlier this year that, despite the administration’s propaganda campaign, American students and young professionals could save over $500 by paying the penalty and opting out of the Obamacare exchanges. This administration has waged a crusade to indoctrinate an entire generation into making decisions counter to their own financial interests merely to preserve their immensely flawed healthcare law; such an approach is seriously immoral, and no Princeton student should fall for such tactics.
In conclusion, what makes the Princeton eating clubs such a special presence on this campus is the lack of administrative involvement in their internal affairs; they are completely private and student-run. Similarly, a healthcare system free of government intervention is more likely to provide the competition and choice that American consumers deserve. The President’s health care bill moves America in the opposite direction, and students nationwide should oppose it before quality healthcare becomes as exclusive as a “members only” party.