For every action, there is an equal and opposite reaction.
Newton’s third law applied to science; push water here, a wave forms there. But it also works in public policy, particularly when governments try to exert influence on free markets. A push for reform in one area can start a tsunami elsewhere.
We’re about to see Sir Isaac’s theory put to the test on a grand scale starting Oct. 1, when the Affordable Care Act — aka Obamacare — is fully implemented as the law of the land, more or less.
We say more or less because the White House already has pulled back on one aspect of the law, delaying for two years the rule forcing small businesses to provide insurance for workers. Either it’s because the administration knows that mandate will hurt the economy, or it is merely bending to current public opinion.
President Barack Obama and backers of the law clearly know they have a problem there. A recent Rasmussen poll showed that 54 percent of Americans have an unfavorable view of the ACA, with similar majorities believing it will increase both health costs and the federal deficit.
The law’s gradual implementation will stretch over several years, the first phase being the rollout of “exchanges” where individuals can shop for health policies and also earn tax subsidies. Those who don’t secure some sort of insurance will face a fine, an unpopular point the Supreme Court upheld in its decision last year.
Decades of debate over health care reform got nowhere in Washington until Obama was able to pass his law via a Democratic majority in Congress. It continues to face opposition from Republicans who have threatened a government budget shutdown to defund it.
Barring that, the law aims to provide more Americans with health insurance in an era when few can pay for medical care without it.
Reasons behind the rise in medical costs are varied. One is that modern health care is very good. Technological advances in treatments and miraculous new medicines have conquered many diseases and made surgeries less invasive, helping us live longer and better. But that progress carries a high price; Americans pay a higher percentage of gross domestic product for health care than anyone.
Another cost multiplier is malpractice insurance. Doctors must protect themselves from legal liability and huge court settlements that can ruin them; those expenses are passed on to patients as well.
We get what we pay for. Health care so exceptional and so costly it requires insurance to defray the expense. Such policies also are quite pricey both to individuals and employers, but well worth it when a large medical bill comes due.
The ACA wasn’t created to change the health insurance most of us have, at least not wholesale. It seeks to provide coverage for the uninsured: part-time workers, the self-employed and the jobless.
And here is where politics intervened. Creating a right-sized, cost-effective safety net for those people rather than a massive new federal entitlement should have been a reachable goal, but our elected officials never could agree on such a plan. Instead we wound up with a partisan concoction that one side believes is the biggest boondoggle ever created and will stall the economic recovery, while the other side thinks it is ... well, better than nothing.
But is it? The negative impact of this law on several areas of our economy could have that equal and opposite reaction Newton taught us:
• Businesses faced with the mandate of providing insurance for workers are reacting despite its delay. Some have cut full-time employees to part-time status to avoid having the mandate kick in. Last week, Home Depot announced it would drop coverage for its part-timers. Earlier, UPS said workers’ spouses with their own insurance wouldn’t be eligible for coverage.
Other companies may forestall hiring or expansion and cut jobs entirely to avoid having to pay out more than they can afford for worker coverage.
In the real world, businesses must manage their labor costs or suffer financially. When the law forces companies to provide benefits for some workers, others could lose their jobs as a result.
• The insurance industry, perhaps hot everyone’s favorite, is nonetheless is a key sector of the economy and faces an uncertain impact.
While providers may profit on one hand from having more policyholders, they can no longer manage risks because they must accept everyone, including those with pre-existing conditions. Though a plus for many, that likely will drive up costs for everyone. Additional mandates on what coverage must be provided and to whom will further hamper the industry’s ability to control its own destiny.
• Medical professionals, too, may feel the pinch. With many more patients theoretically now covered, doctor’s offices may become overwhelmed, particularly where there already is a shortage of physicians and nurses. As the law is fully implemented, doctors may be wrapped in more red tape and battles for fair compensation, as many now face with Medicare. If that reduces the incentive to enter the medical field, fewer may make that career choice.
After all, what good will it do to have more people covered by insurance if there aren’t enough doctors to provide care?
Despite all this, federal involvement in our health care likely will increase over time, for better or worse. History shows that when the government gains control of something, it never turns loose. How this law plays out will determine what kind of policies we see from our leaders in the future, and future elections as well.
The hope is they will, at some point, work together to fine-tune the ACA or devise a better plan more acceptable to a skeptical public, one with fewer negative effects on the economy.
Obamacare is a huge tidal wave looming over us all. What will happen as it washes over remains to be seen, but the likelihood of our exceptional health care drowning in a sea of government ineptitude gives us reason for concern.