How Does the Affordable Care Act Affect Us?

The Affordable Care Act (ACA), sometimes referred to as Obamacare, will affect us. It is a complex area of law with many pieces. In 2010, it passed Congress with many compromises, and mostly survived a Supreme Court challenge. Here are a few of its major provisions.

From the start, insurers can no longer cancel coverage if you become sick; there will be no lifetime limits on total cost of coverage, and more preventive care will be covered. Young adults (up to 26 years of age) can usually stay on their parents plan, and denials for pre-existing conditions will start to decrease. Drug costs under Medicare will start to decrease in addition to reimbursements for Medicare Advantage plans (Medicare MOs). A significant new provision requires insurance companies to spend at least 85 percent of their budgets on medical care. If they do not, they must send a refund to their enrollees.

By 2014, all denials for pre-existing conditions are to be eliminated. Medicaid coverage will be expanded for millions of individuals and essential benefits will define minimal coverage for policies. Individuals will be required to have coverage which could be purchased through newly established health care exchanges, with subsidies for those with low income. Persons who do not purchase or have their own insurance will pay a penalty that will eventually rise to $695 for individuals and $2,085 for families, or 2.5 percent of income. Employers with 50 or more workers will be required to provide coverage, or face a tax penalty. Employers with less than 50 workers will not be required to provide coverage, but subsidies will exist to encourage them to do so.

Although the ACA establishes many reforms in the area of health care and is one of the major pieces of legislation in this field since the 1960s when Medicare and Medicaid were established, there are significant weaknesses. Progressive politicians tried to include a “public option” in the bill, or at least a possible buy-in to Medicare or Medicaid. However, these were never included and now much of the increased coverage will be channeled through private plans, both profit and non-profit, rather than any government program. This will expand, and sometimes subsidize, the private sector often with government enforcement or government funds.

The exchanges set up within the states are still being established and their goal of significantly decreasing costs and widening consumer options has yet to be determined. Furthermore, since the Medicaid reforms were not supported by the Supreme Court decision, many states have refused to implement them. Whether or not these refusals persist and states continue to reject substantial Federal funds also remains to be seen.

Possibly the greatest problem with the ACA is that only half of those without medical insurance will be covered by the provisions of the act, even if more states agree to participate in Medicaid reform, and as many as 31 million people will still not have coverage. Supporters of the act point to Massachusetts where a similar plan led to more coverage than projected, while critics of the act also point to Massachusetts for failure to adequately control costs, either on a state-wide or individual basis, and the coverage that does exist is often insufficient and leads to under-insurance.

As this complex act is implemented, its strengths and weaknesses will become more apparent and the need for further health care reform may arise at some time in the future, possibly very soon.

1 thought on “How Does the Affordable Care Act Affect Us?

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      I have no idea where the West Village is but in case you are there, the author of this post is totally lying to you concerning Massachusetts, issues affecting everyone on Medicare, and Medicaid as it relates to Obamacare. In order of appearance:

      1. Seniors on Medicare still face bankruptcy-causing lifetime limits; Obamacare didn’t do anything for seniors about lifetime limits; but Obamacare did cut a trillion dollars from Medicare provider payments and institute rationing
      2. The cuts to Medicare drug costs were agreed to in 2009, not as part of Obamacare (just in case you think the drug industry is benevolent, they did it because the drugs were going off patent anyways and it was a deal with Obama so the government would not force price controls on them as part of the Obamacare law)
      3. The cuts to the public Part C Medicare Advantage (MA) program hurt the urban and rural poor, not most seniors on public Part C (see recent Kaiser report on MA). But at least in Part C Medicare we seniors have the public option that the author of this post wanted in Obamacare
      4. The states where Medicaid will be expanded to 138% of FPL had all pretty much expanded Medicaid already to that level through waivers; Obamacare just changes which bucket in the Federal budget the money comes out of (in the 20-30 states that are not expanding Medicaid, people making between 100% and 138% of FPL can buy subsidized private insurance for a few dollars a month — guaranteed issue — that is much better than Medicaid)
      5. Who would ever want to buy in to Medicare or Medicaid? Medicare is so bad that over 95% of seniors depend on something else to supplement it. Medicaid is accepted by a very limited number of providers.
      6. The states that are not expanding Medicaid are not “rejecting Federal funds.” They are simply letting the funds flow directly to their citizens in the form of subsidies with which their citizens can get much better insurance than Medicaid. (Unfortunately because the Democrats did not read Obamacare before they passed it, this great benefit to residents of many states only applies if the residents are between 100% and 138% of FPL. If they are below 100% of FPL but do not qualify for Medicaid — too many assets, for example — they have to pay full price for insurance.)
      7. There was not more enrollment in Massachusetts than projected. The projection was 100%. There are still 3%-5% not enrolled (as opposed to 6%-7% before; there was no big increase as the author implies). The people still not enrolled are mostly people who qualify for Medicaid or RomneyCare but do not bother to sign up because they know it is terrible insurance that few providers accept (and because they are poor, they pay no penalty). They are better off using the free care pool the way they always did (which is why Romneycare did not achieve the promised cost containment; we here in Massachusetts are paying both ways)

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