Affordable Care Act: Thanks, Obama

In 2010, the ACA was passed to increase healthcare coverage, but it has had a mixed response on both sides. Congress’ song of the summer seems to be “Repeal and Replace”. A lot of people have a lot of opinions about the Affordable Care Act, or Obamacare, but how many of us actually know what it means?

Most young adults, including myself, don’t remember what healthcare was like before the ACA. At that time, almost everybody got insurance through their jobs, and only if their job offered it. There was limited access to affordable insurance on your own; 76% of uninsured people said they couldn’t afford an individual plan. There were no requirements for what health insurance had to cover, meaning they could exclude treatments for conditions just because. While the ACA has solved some of these problems, it’s created new ones. What does it mean for us now? Let’s talk about the major components of the ACA and its shortcomings.

This is not meant to try and sway you, but to help you figure out which parts of our (very confusing) healthcare system may be disappearing. As a disclaimer, I support the Affordable Care Act, as it increases access to medical care; however, I understand many of the criticisms, and did my best to keep this neutral.

Why people like it

The most popular part of Obamacare is the expanded coverage requirements. People who have preexisting conditions and women cannot be charged more, or denied, for insurance. In addition, young adults up to 26 can stay on their parents’ health insurance plans; this has been crucial in an economy where many people (like me) have to go to graduate school or are unable to find a job right out of college with benefits. This helped dropped the uninsured rate in US adults ages 19-34 from 28% to 18%1. Under the ACA, there are no longer annual or lifetime coverage caps. Before, if you had cancer or a spinal cord injury and spent $1 million on your care (which isn’t that hard to do), insurance could refuse to pay for care for the rest of the year, or even the rest of your life. Now, they must continue to offer coverage to you.

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Source: Healthcare Counts

There are also 10 essential health benefits that insurance has to offer. All marketplace insurances offer these, and if your workplace does not offer you insurance that covers all of these, you may be entitled to extra premium credits to get your own.

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Share the love (or health insurance)

Before the ACA, just being poor didn’t qualify you for Medicaid- you had to have children or a disability, depending on your state. This created a “coverage gap” for people who couldn’t afford insurance but didn’t get public assistance. The Medicaid expansion makes it so that everyone 138% below the federal poverty level (in 2016, this was $20,160 for a family of 3), regardless of other factors, qualified for Medicaid coverage. While designed to be a national expansion, it became optional for states in a June 2012 Supreme Court ruling. Some governors decided to opt out to show their dissent to the ACA, and to date 19 states have not taken it, resulting in 2.2 million Americans not having access to Medicaid.

Similarly, there is a program for uninsured children called the Children’s Health Insurance Program (CHIP). Created in 1997, it gives coverage for kids in low income families not eligible for Medicaid. The ACA gave it more money, extended coverage and requires states to maintain eligibility through September 2019.

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The marketplace: not an actual place 

What about people who are unemployed or don’t have insurance through work? The exchange, or marketplace is a way for individuals to buy health insurance online in an affordable way. You can buy different levels of care, and they all meet the essential health benefits requirements. I talked about how to get this coverage in more detail on my health insurance post, or you can go to HealthCare.gov for more information.

No, we didn’t find a money tree

So how we gonna afford all this?? Two ways- 1. Taxes 2. Individual (and employer) mandate.

First, let’s talk about the taxes. There was an increase in income taxes on those making over $200,000 a year. They also increased taxes on medical devices, brand name drugs, and indoor tanning services (because that’s a no-no, stick with the spray tan everyone). This gets complicated, so if you’re interested in looking at the entirety of provisions, look here.

There are also some tax breaks to incentivize people to get insurance; most notably,  employers don’t have to pay taxes on insurance coverage for their employees. Starting in 2020, there will be a 40% tax for “Cadillac care”, meaning really expensive insurance (defined by the premium), that is paid by employers. This is to prevent increased costs, but there is a concern that this cap would not keep up with increasing healthcare spending; while it may not affect many now, in 20-30 years it may be severely limiting the average plan. There’s currently bipartisan discussion as to whether or not this should be removed.

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Then, there’s the mandate. For individuals, if you don’t have health insurance for the majority of the year, you get charged a minimum of $695. And for employers who don’t offer health insurance to their full-time employees, they also get charged. The mandate has been very, very unpopular. So what’s the point? This is necessary to provide people with pre-existing conditions coverage. By requiring insurance companies to cover all of these sick people, they would go broke if they had no healthy people in their pool. What would stop me from not having coverage until I need a blood pressure medication or a surgery, and then I get insurance to make them cover it? While I understand why people don’t like having insurance they don’t think they need, it’s important to understand that we cannot provide care to all people with pre-existing conditions without it, so you have to weigh the pros and cons of those two issues.

Fact or fiction

Through the years, there have been a number of myths about Obamacare. Here are just a few:

It creates death panels- Fiction. This came from a 2009 Facebook post by Sarah Palin. She was referring to a provision that physicians would be paid for discussing living wills and end-of-life options with their patients, to promote better decision making. Because of the hullabaloo, this was actually removed from the bill, and is not a part of the ACA today.

If you like your plan/doctor you got to keep it- Sort of fiction. This was true IF your insurance fit the requirements of essential health benefits. In reality, there were some shifts in plans as insurance companies adjusted to the new requirements. At this point, all plans should meet those requirements, so it should no longer be an issue. Some insurance plans, in an effort to become more affordable, are very limited in the physicians that are in network, which is something to evaluate when you look at new plans.

It cuts Medicare spending- Fact, but not in the way you think. Cuts were made to Medicare to pay for the rest of the bill, but the vast majority of the cuts were in how much providers and hospitals get paid for treating Medicare patients. While this has caused a new host of problems, like physicians turning away new Medicare patients, it does NOT affect Medicare benefits.

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You have to pay for insurance for illegal immigrants- Fiction. There is an explicit provision against providing insurance for undocumented immigrants in the ACA. However, because states are spending less money on uninsured Americans, they have more money to spend in other places. Some states have opted to use this money in clinics providing preventative care for undocumented immigrants, to prevent increased emergency medical services, which everybody (regardless of documentation) has access to.

It makes you buy coverage you don’t need- This is fact, until it’s not. This is the nature of insurance- you don’t need your car insurance until you have an accident. While many are angry about the individual mandate, as I explained before, this is vital to prevent people with pre-existing conditions being discriminated against. And it also protects you from having to go bankrupt if you have an injury or unexpected illness.

The ACA is a job killer- Fiction (as far as we know). Many Republicans feared that jobs would decrease because employers were required to buy health insurance for their employees. Supporters point to the fact that job growth has continued steadily since the ACA was enacted, nay-sayers say we have no way of knowing if the growth would have been faster without it. While we can’t tell what would’ve happened otherwise, we can say there’s no difference in job growth between states that took the Medicaid expansion and those that didn’t2.

It’s causing healthcare costs to rise- ??? Healthcare costs are rising, but it’s not clear whether this is directly due to the ACA or other factors (increasing medical care costs, aging population, etc.). With more insured patients (especially those with pre-existing conditions), insurance companies are spending more money, which they then pass on to their consumers in increased premiums. But this appears to be due to expanding healthcare coverage, not something specific to the ACA.

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What’s up with all of the haters

No matter what you know about the Affordable Care Act, I guarantee that you know Republicans tend to not be big fans. Why? Some of the most stated reasons are the increased taxes and that it’s an attempt to redistribute wealth, two things they are fundamentally opposed to. They also don’t like the individual mandate and the limits it puts on state freedom. Some of their suggested replacements have included federal high-risk pools, that would subsidize insurance for those with pre-existing condtions, and block grants for Medicaid, meaning that the federal government will give states a lump sum of money for them to use as they see fit.

And believe it or not, some Democrats don’t love the ACA. Despite expanding coverage, this does not provide universal healthcare coverage, a longtime liberal dream. There is also still a reliance on private for-profit health insurance companies (as opposed to being government run), something some liberals feel is at odds with the public good of increasing affordable health insurance.

People hate talking about healthcare because it’s complicated. But there’s no way around that. While there are many new healthcare bills being proposed, it’s important to pay attention to how it would affect both you and the most underserved people in our country. When you’re trying to establish your decision on a new bill, find out what the Congressional Budget Office, a bipartisan group that estimates the financial effect of proposed bills, has to say. Look to medical activist/lobbying groups, like the American Medical Association and the American Hospital Association, to see what their stance (and reasoning) is.

If the ACA was repealed without replacement, 22 million Americans would be at risk of losing insurance. Keep in mind that with the good comes the bad, and that we must all work together to come up with a better healthcare system. Remember to call your representatives to let them know what you think of new options, find their numbers here.

Works Cited

  1. S. R. Collins, M. Gunja, M. M. Doty, and S. Beutel, Americans’ Experiences with ACA Marketplace and Medicaid Coverage: Access to Care and Satisfaction,The Commonwealth Fund, May 2016.
  2. Gooptu A, Moriya AS, Simon KI, Sommers BD. Medicaid Expansion Did Not Result In Significant Employment Changes Or Job Reductions In 2014. Health Affairs. 2016;35(1):111-118. doi:10.1377/hlthaff.2015.0747.

 

 

 

 

 

 

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