The Affordable Care Act (ACA), or “Obamacare,” as it has been dubbed, has many pros and cons. Reflecting the complex nature of the new healthcare law, Obamacare facts, pros, and cons cannot be explained in just a few short paragraphs.
By definition, affordable health care should cost less than eight percent of your annual income. Tax credits further cap the cost at 9.5% under the Silver Plan for those making between 300% and 400% of the federal poverty level (FPL).
As Obamacare explained in the past, it does have many advantages for American citizens in the low- to middle-class income demographic, as well as being good for small businesses. On the other hand, Obamacare facts, pros, and cons include obstacles for individuals who earn a high income, large organizations that don’t insure their employees, and certain sectors of the healthcare industry.
Obamacare explained in a nutshell is this: the average American stands to gain the most from the ACA. Larger firms may notice a negative financial effect that will in turn affect their employees as well; however, despite some of the Obamacare facts, pros, and cons, all Americans will still benefit greatly from the implementation of the ACA. Pre-existing conditions will still be covered, and Obamacare will also bring an end to gender discrimination. While many Americans may see the cost of their health insurance go up, the quality of their insurance will improve greatly.
Here are just some of the top Obamacare facts, pros, and cons.
Pros of Obamacare
- Tens of millions of Americans will receive access to affordable health care.
- Using their states’ Health Insurance Marketplace, over half of uninsured Americans will receive affordable or free health care.
- CHIP now covers nine million children.
- You won’t be dropped from your coverage for being sick or making a mistake on your application. You also will not be dropped if you get sick, be charged more for being sick, or be denied coverage because you are a woman.
- Small businesses can receive a tax credit of up to 50% on their employees’ health premium costs.
- Young adults can stay on their plans until they turn 26; 82% of uninsured adults will qualify for free or low-cost insurance.
- Medicare will be improved for seniors and the “donut hole” will be eliminated. Rates will be kept down and the number of free services offered will be increased.
- All coverage that starts after 2014 must include new preventative services and essential health benefits.
- Perhaps the biggest pro is that the ACA will help to curb spending on health care in America.
Cons of Obamacare
- The money for affordable health care will come from new taxes, mostly on high-earning organizations and individuals.
- Under the individual mandate, you must sign up for a healthcare plan, get an exemption, or pay a penalty.
- Medicaid will be expended using federal and state funding; however, all states will now have to expand their Medicaid programs.
- While CHIP is going to be expanded, it also uses state funding.
- Since insurance companies must cover sick people, this will raise the cost of coverage for everyone.
- The employer mandate states that all companies with more than 50 employees must provide their workers with health coverage. The downside of this is that some businesses may have to cut employee hours.
- Young people may not need coverage as much as older citizens do because they are typically in good/better health.
- Medicare payments to doctors and patients may be limited.
- Insurance premiums have gone up due to providers having to provide the services covered.
- Finally, the ACA fails to take into account the actual cost; instead it focuses on making sure that people have coverage.
The average American stands to see a reduction in their health care under Obamacare. This means that Americans making less than 400% of the FPL and 30 million of the 44 million Americans who currently do not have health insurance will receive it.
Obamacare facts, pros, and cons include the following for the average American beyond the 10 essential mandates offered by the ACA. Obamacare will chip away at existing conditions, while expanding coverage. The quality of health care will be improved while, theoretically, the cost will be reduced. Americans in the middle-income bracket (i.e., those making 133%–400% of the FPL) and employees will be able to use tax credits and out-of-pocket subsidies on the exchanges to save up to 60% on the current cost of healthcare premiums, providing 23 million Americans with affordable health care.
Under Obamacare, women in America will experience many pros and few cons. One of the biggest pros of Obamacare is that 47 million women in America will gain access to women’s health services, including wellness and preventative services and the greater availability of contraceptives. Under the ACA, women will not be required to cover as many out-of-pocket medical expenses.
Seniors are yet another group that the ACA will benefit greatly. Obamacare, explained simply, is a boon for seniors. One of the biggest pros of the ACA for seniors is that it includes sweeping reforms to Medicare that include closing the “donut hole”—the gap between the initial coverage and coverage for a catastrophic medical emergency—and expanding benefits and coverage for millions of seniors in America. Seniors also will not incur any out-of-pocket expenses for wellness and preventative visits to their doctors.
According to Obamacare facts, pros, and cons, the pros far outweigh the cons for elderly Americans, but some of the reforms to Medicare, including cuts to Medicare Advantage, home health care expenses, and Medicare hospital expenses, will have—or already have had—a negative impact on seniors and doctors who work with patients on Medicare. However, there is now an oversight committee in place to make sure that reforms to Medicare don’t affect seniors negatively.
Obamacare explained in simple terms will benefit low-income Americans as well, since it works on a sliding scale; people with incomes 133% below the FPL will see many benefits. This will expand healthcare benefit to 15 million low-income Americans with no insurance.
Despite the Obamacare facts, pros, and cons having many pros, such as 100% federal funding for the first year and 90% each year after, many states may just opt out of the ACA. Some argue that this is not about saving money, but rather, it is a politically driven decision that will leave 2–3 million low-income Americans without health care. And this is something that the GOP has admitted to; the information is readily available.
Obamacare explained will have many pros for small business owners. Firms that don’t already offer medical coverage to their employees may see a slight readjustment, but this is only two percent of all firms with more than 50 employees that don’t already provide health insurance to their employees. Businesses with less than 25 employees will receive tax credits to help offset the cost of buying health insurance for their employees. This will be a boon, since small business owners have traditionally struggled to provide health care to their employees.
There are many Obamacare facts, pros, and cons. Some of them include extending the benefits to a child staying on their parents plan until they turn 26; breaking drug companies monopolies so more affordable generic drugs can be allowed on the market; and providing protection against discrimination based on gender and victims of domestic abuse.
Obamacare explained in its 2,000 pages of legislation also has numerous consumer protections in place, such as the 80/20 rule that makes insurance providers spend 80% of their income on healthcare costs and efforts to improve the quality of care or they must return it as a rebate. The ability of providers to drop a customer based on pre-existing conditions or being sick are also on their way out. Fast food restaurants also must display nutrition information under the new mandates.
Obamacare facts, pros, and cons for middle America and small business owners also include a savings of up to 60% on their healthcare premiums via credits and subsidies on the health insurance exchanges.
Obamacare explained notes that doctors will now be rewarded for providing quality service over “treating and streeting” patients. There are also oversight committees in place to make sure that the ACA works.
So, not that we have explained some of the pros and facts of Obamacare, it is time to outline some of the cons. The ACA does not go into effect until 2015, and this has resulted in rising healthcare premiums, often at an alarming rate.
Obamacare explained also notes that the 21 states that have opted out of the ACA will have the federal government take care of running their insurance changes. On the surface, this is a cost-cutting measure; but in reality, it is a way to provide subsidies to those states’ low- and middle-income citizens—essentially, Federal taxpayers will pay for them. This has also resulted in a 3.5% fee for health insurance providers to sell on the federal exchange.
Some of the other negatives of the Obamacare facts, pros, and cons include the downside of being taxed $95.00 the first year, then one percent of your income each following year as a penalty should you decide to “opt out” of the ACA. This is to pay for everyone who chooses to receive coverage under Obamacare. While this may mainly affect big businesses and the upper two-percent, these individuals along with those opting out of the ACA will be taxed to pay for healthcare reform—and this may have unforeseen consequences on a still shaky job market.
The other Obamacare facts, pros, and cons include the con of cutting $716 billion from Medicare and reinvesting it in the program. Then there’s the cost of the ACA, which is projected to total $1.1 trillion over the next decade. For this to work, taxpayers and states will have to fund the plan. However, one pro is that it will result in a $200-billion reduction in the deficit and states will receive funding of 90%–100%. States such as Nevada and Michigan have provided studies on how the U.S. can save billions with Obamacare, with healthcare companies still making billions despite taking a hit on their profits per plan; these companies will still make a profit from insuring millions of new clients.