So recently the Supreme Court upheld The Patient Protection and Affordable Care Act (PPACA), aka Obamacare. It was interesting to see all of the reactions on Facebook and Twitter (which I think were much more numerous and intense than when Obamacare was first passed.) Unfortunately, based on the reactions that I saw, it seems like there are quite a few myths or just simple misunderstandings about Obamacare. In this post, I will attempt to debunk some of the myths, and explain a few things which I like about it. And even though, I understand you might not favor it as much as I do, I still hope you can read this post with an open mind.
- Obamacare is a “Government Takeover of Healthcare”, Universal Healthcare, or Socialized Medicine.
From what I’ve seen, this seems to be the most common misconception. Some people think that Obamacare is something similar to the healthcare systems used in various European countries or Canada. They hear horror stories about women with breast cancer waiting years to see a specialist, or waiting 12 hours in the E.R. Some say that the government will take control of hospitals or doctors or decided which insurance company you can use. Obamacare does none of this. Socialized Medicine/Universal Healthcare is where all citizens receive healthcare which is regulated and paid for by the government. As much as I personally wish we had Universal Healthcare, and although the government will help pay for the cost of insurance for those who don’t make too much, Obamacare is nothing like it. We still have private insurance companies. One of my favorite websites, Politifact.com (which dedicates itself to separating fact from fiction in politics) declared this myth as their “Lie of the Year” in 2010 and wrote a great articleabout it.
- Obama is a smoker (here just for fun.)
Obama quit smoking in 2010.
- If you don’t pay the individual mandate, you can go to jail.
- Obamacare is unconstitutional.
If it is upheld by the Supreme Court of the United States it is, in fact, constitutional. No matter how much we hate it, this won’t change. Can we stop arguing this point?
- Obamacare will add billions or trillions of debt to the federal deficit.
The Congressional Budget Office (CBO), a nonpartisan, widely respected agency that projects and reports the effects that federal laws have on the budget, reports that Obamacare will lower the deficit by about $124 billion over 10 years. Whereas, if Obamacare were to be repealed, the CBO projects it would increase the deficit, by about $210 billion over 10 years. Yet another Politifact article here.
What I like about Obamacare:
- Insurance companies are prohibited from denying coverage or charging higher rates to those with pre-existing conditions.
Why? Suppose you are uninsured and get pregnant, or get cancer. You are going to either have one huge medical bill or possibly die. In the past insurance companies could deny you coverage for having a pre-existing condition.
- Insurance companies are prohibited from establishing annual and lifetime spending limits.
Why? Again, suppose you get cancer. This time you are covered. Most insurance companies, have annual and lifetime spending limits. If the cost of health care you receive exceeds these limits, then you are on your own. Obamacare eliminates these limits.
- Insurance companies are prohibited from dropping patients when they get sick.
Why? Yes insurance companies really can drop you if you get diabetes, cancer, etc. Seems like a no-brainer.
- Insurance companies must spend a certain percent of premium dollars on your health care. If an insurer fails to meet this requirement, there is no penalty, but a rebate must be issued to the policy holder.
Why? This requires insurance companies to actually spend most of your money on healthcare, instead of bonuses for executives, lavish trips, etc. Just this year, customers already received rebate checksfor an average of about $151 per family.
- The establishment of “health insurance exchanges”.
Why? Health Insurance Exchanges are basically places (call centers, websites, brochures, etc.) that the government sets up where customers looking to buy insurance can see insurance companies, the services they offer, prices, and benefits, side by side. Anyone who has ever bought insurance for anything, knows that it’s difficult to know if you’re getting the best deal. With so many companies that have different sites, different lingo, etc. It can be very confusing. This will make it easier to get insurance, make insurance companies more competitive, and thus lower coverage prices (hopefully).
- Restaurants are required to display the calorie content of their foods on menus, drive-through menus, and vending machines
- Children will be permitted to remain on their parents’ insurance plan until their 26th birthday.
- All insurance plans must cover certain preventive services such as mammograms and colonoscopies without charging a deductible, co-pay or coinsurance.
- Subsidization (government helps pay) of insurance premiums for individuals in households with income up to 400% of the poverty line.
Why? Many people are worried about the individual mandate and being able to afford insurance if they don’t have it. Heck, it even makes me feel a little uneasy. This should help ease all of our fears. What exactly is the poverty line? Well, if your annual income is below a specified amount, you are considered as being under the poverty line. The graph below shows each amount.
So lets say that you are single. If you make less than $44,680 (11,170 x 4), then you are eligible to receive a little help from the government to pay for insurance. How about a family of 4? You get help if your household income is less than $92,200 (23,050 x 4).
As you can see, unless you are doing pretty well financially, you will most likely qualify for some government assistance in paying for health care.
You may ask, “How will the government afford this?” The answer is simple: a combination of spending cuts and taxes. First of all the individual mandate is a tax. Individuals who refuse to get insured for some reason, will be paying a penalty of $95 or up to 1% of their income in 2014. In 2016, this jumps to $695, or 2.5% of income. The limit for families is $2085. There are exemptions to this mandate for financial hardships or religious beliefs, however.
There will also be a $2,000 per employee tax penalty on employers with more than 50 employees who do not offer health insurance to their full-time workers.
Individuals making over $200,000 or couples making over $250,000 will be taxed, an additional 0.9%.
There is also a A 10% sales tax on indoor tanning that took effect in 2010.
As far as cuts, there will be spending cuts to Medicare and Medicaid that will amount to over $62 billion in cuts over ten years.
This article explains how it will be funded very well.
I can certainly see why some people don’t like Obamacare. The individual mandate, although constitutional, is somewhat unprecedented. Never before has the federal government imposed a tax for not doing something. Although, as I stated before, the mandate does scare me slightly, I believe it is a good thing. Simply put, it requires that everyone be insured, which will in turn lower the costs of health care. I might go more in depth as far as how that works in another post on another day.
I can also see how there is disagreement on how Obamacare should be funded. There may be too many taxes (mainly on the wealthy) and not enough cuts for some people’s liking. The bottom line though, is that it will be paid for, and will actually lower the deficit.
For me personally, the positives outweigh the negatives. I just hope that after reading this, you might be able to see the positives that usually aren’t very well portrayed on places like Facebook, Twitter and family reunions (in Utah anyway :s ). If you have reasons for not liking the act, please comment below. I’m always interested in hearing other points of view.