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Hating Obamacare, But Loving the Affordable Care Act

Hating Obamacare, But Loving the Affordable Care Act

Putting Obamacare In Perspective

Maximum Out-of-Pocket Premium Payments Under PPACA

Maximum Out-of-Pocket Premium Payments Under PPACA (Photo credit: Wikipedia)

Perhaps no subject today is more riddled with complications, nuance and purposeful distortion than Obamacare – otherwise known as the Affordable Care Act (ACA) and, more formally, the Patient Protection and Affordable Care Act (PPACA).

And there’s certainly no subject that fires up partisan divides like that which almost brought the world economy to its knees with unprecedented political brinksmanship by America’s Tea Party politicians who threatened to default on the federal debt.

Public opinion polls continue to show that more Americans remain opposed to Obamacare than to the ACA – even though they’re the same thing. The reason for this, of course, is the use of President Obama’s name in the former, which injects respondents’ political biases into their responses.

The same holds true for the law overall – which still has its diehard opponents (as did Medicare when it was first enacted, by the way). This is seen most forcefully in the ongoing efforts to defund it despite it having survived the legislative process to achieve passage, a Supreme Court challenge that upheld the law’s constitutionality, and an effective referendum on the law in the 2012 presidential elections in which the candidate proposing to repeal Obamacare “on day one” in office was defeated.

But when individual components of the law – like prohibiting insurers from denying applicants for insurance due to pre-existing medical conditions or allowing young adults to remain on their parents’ insurance plans until age 26 – are considered, these are generally widely supported. Capping out-of-pocket costs to reduce personal bankruptcies due to medical bills is also likely to win popularity contests once people realize its benefits.

Then there’s the confusion about the degree of opposition itself. While it’s true that many recent polls found 54% of Americans remain opposed to Obamacare, roughly a third of that 54% (or about 16% of total respondents) are opposed to it because they believe it doesn’t go far enough. They want even stronger healthcare reform legislation like a single payer system that would remove insurance companies from America’s healthcare altogether. 

Conservative critics of the law ignore this polling distinction and lump all opposition to the law together to strengthen their arguments against it, when in reality a third or so of that opposition is diametrically opposed to their free-market alternative to Obamacare. As such, they’d more properly be included with those who support the law. This, of course, undercuts the entire rationale for continuing to resist its implementation by any means possible – including shutting down the entire federal government in an attempt to achieve what they failed to achieve through normal legislative, legal, and elective means.

Demonizing Obamacare

Further complicating the stew are the deliberate efforts by the law’s opponents to muddy the waters of its implementation with campaigns of distortion and disinformation. These inflate the number of Americans opposed to the law based largely on such disinformation.

When you strip away the ideology and vested interests, however, what you’ll find is that Obamacare deserves neither demonization nor adulation. It’s not the end of freedom nor is it the definitive solution to our many healthcare problems in America.

Those living with its precursor in Massachusetts since 2007 aren’t any worse off than they were before it was instituted. Indeed, there are far fewer uninsured there now, though that’s hardly proven revolutionary in any way. For most, it’s been business-as-usual.

The fact is that many Americans will be able to get more affordable health insurance under Obamacare, if only because many are eligible for federal tax subsidies that will significantly lower their cost of purchasing health insurance. Others will end up paying more for health insurance, especially if their incomes aren’t low enough to qualify for these subsidies.

Older patients with chronic medical conditions will end up paying less – and be able to get coverage where they weren’t able to before Obamacare – while younger, healthier adults will pay more to subsidize them. This is the nature of all insurance, not just Obamacare. Those who don’t need it in any given year end up subsidizing those who do. It’s not rocket science – and it’s not socialism.

Indeed, relying on private health insurance companies as Obamacare does instantly disqualifies it as “socialism” – at least for those with any clue as to what socialism really means.

Follow The Money

If you’re wondering why so much is being invested in thwarting Obamacare at every turn, just follow the money. There are powerful vested interests desperate to preserve their inflated profits that are jeopardized by Obamacare – from insurance companies to pharmaceutical and medical device companies to doctors and hospitals – and nobody spends more on political lobbying in America than its healthcare industry.

Consider as examples ongoing email campaigns that frighten recipients with threats of Obamacare “death panels” (a complete fabrication) and anecdotal Facebook entries describing how the government will raid your bank account if you fail to buy health insurance in 2014 as Obamacare takes full effect (more fabrication).

The truth is that Obamacare is a pretty toothless tiger. The most you can expect if you fail to comply is a modest $95 penalty in 2014 that will increase to up to $695 – or 2 ½% of family income per uninsured family member (children at half that rate) – by 2016. This penalty is capped at $285 per family or 1% of taxable family income in 2014 and rises to $2,085 or 2.5% of taxable family income in 2016 – and will increase each year thereafter.

While that could easily add up for larger families who opt out of Obamacare, it’s still likely to be less than the cost of health insurance for most Americans.

The early indications are that many will be able to buy health insurance at rates that will prove highly competitive. Most of those in their 20s can expect to pay from $100-150 a month in premiums for a basic “bronze” plan that will cover 60% of their medical costs. This means Obamacare may even earn its “affordable” designation – something of which I’ve been highly skeptical (see my eBook, Obamacare – The Good, the Bad & the Missing for details of my reservations, but basically count me among those who think it doesn’t go far enough fast enough).

Government subsidies for many Americans will make health insurance even more affordable under Obamacare, so the calculus should generally favor buying an appropriate insurance plan. That’s because whatever you might save by not complying with the law will still leave you uninsured – and the financial risk of being uninsured dwarfs the few dollars most Americans might save by refusing to comply with the law.

This is why the public (dis)service campaigns being waged to encourage people from complying with the law are especially irresponsible. They’re sort of the healthcare equivalent of the “reverse mortgage” scams that populate cable television to prey on seniors. Both hide the dire financial consequences for those they suck in.

But Not All Health Insurance Is Created Equal

Because health insurance is so expensive, it’s expected that most of the newly-insured under Obamacare will choose less expensive “bronze” or “silver” plans - which will cover 60% or 70% of their healthcare costs respectively.

These plans do this, in part, by requiring you to pay higher deductibles on the care you receive – which causes many to defer care even though they have insurance. These high-deductible health plans are better than no coverage at all, but some have deductibles as high as the maximum allowed under Obamacare ($6,350/year for individuals, $12,700/year for families in 2014, which will increase over time).

These are high enough to discourage use of the healthcare system even when care is needed.

Because of this, the bigger question for anyone evaluating their options under Obamacare isn’t just whether they should comply and what kind of insurance plan they should purchase.

The bigger question is how best to utilize our often dysfunctional healthcare system. Obamacare is mostly about health insurance and less about healthcare delivery. However, it does make efforts to make our healthcare more coordinated and to reward quality and not just quantity of services.

These aren’t likely, however, to have the kind of dramatic impact needed to protect Americans from the potential harms of an overly aggressive medical treatment system that often causes more harm than good. This is a subject explored in detail in Our Healthcare Sucks.

But if Obamacare forces more Americans to re-evaluate how they use our healthcare system – riddled as it is with conflicts of interest among not just insurance companies, but doctors and hospitals as well – then that may prove a bigger legacy than its better recognized health insurance effects.

More Than Money To Consider

To learn more about the basics of Obamacare, you’re encouraged to view this brief video prepared by the Henry J. Kaiser Family Foundation for a broad overview of Obamacare’s requirements and opportunities for obtaining affordable health insurance coverage.

And if you just want to cut to the chase, see this flow chart from the Center for Healthcare Research & Transformation for a quick overview of your health insurance options under Obamacare.

The lower-cost “bronze” and “silver” health insurance plans that many Americans will select on health insurance exchanges leave them more responsible for out-of-pocket costs than higher-priced “gold” and “platinum” insurance plans. That makes it even more important for those choosing these lower-cost plans to learn to be more cautious consumers of medical care that’s often not needed and sometimes dangerous.

There is, after all, more than money to consider when it comes to your healthcare. Yet many required to purchase health insurance under Obamacare for the first time may be tempted, like others before them, to more freely use healthcare services since they’re already paying for some of it through insurance premiums. This can prove a costly mistake – and not just financially.

This is why you’re encouraged to re-think not just your health insurance needs, but your reliance on a healthcare system that too often puts profits before patients’ needs. And much of that will continue despite Obamacare – and will likely be worsened if it’s repealed, defunded, or otherwise disabled (see Obamacare – The Good, the Bad & the Missing for more on this).

This means considering the bigger picture of not just what the law now requires – and doesn’t require – under Obamacare, but how you can best adapt your healthcare behaviors to reduce your need for medical interventions in the first place.

This will not only lower your healthcare costs, but help you reduce your risk for medically-induced injury – because all medical interventions entail risks that can often cause more harm than benefit. And that’s something we need to consider more carefully before we choose our health insurance – and before we agree to medical interventions regardless of how we pay for them.

This comprehensive approach to both your health insurance requirements and options under Obamacare and how you utilize the healthcare system will assure you’re not taken advantage of when it comes to meeting your healthcare needs.

By putting Obamacare in its proper perspective – which is neither demon nor savior – you can approach it not with dread that you’re being forced to buy something you’d rather not, if that’s your mindset, but as an opportunity to put your healthcare house in order in the most cost-effective manner possible.

And if you’re someone with a pre-existing medical condition or are otherwise thankful you’ll now be able to access the medical system, try to temper that enthusiasm with respect for the harm that overly-aggressive medical interventions can cause.

Learning to become a smart medical consumer will be your best path to acquiring the health insurance best-fitted to your needs and for assuring your reliance on the healthcare system is “right-sized” for the actual medical needs of you and your family – no more and no less.

For Obamacare to ultimately succeed, it will need to be about more than buying health insurance. It will also require that more Americans reconsider their healthcare needs so they purchase only the health insurance they need and use the healthcare system appropriately.

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5 Awesome Comments So Far

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  1. Fed Up
    November 21, 2013 at 11:00 am #

    Sorry, but in NC (using Kaiser Family subsidy calculator) if you earn $8K a year and sign up for a silver plan, you are NOT eligble for tax credit and your premiums are etimated at $8268.00 per year. Um, correct me if I’m wrong, but that is 103.35% of your anual income. How can someone live on -3.35% of their income? Well, I’m going to starve to death, but if I break my arm, I’ll be covered up to about 70% of my medical expenses! Whoo Woo!

    • John Lynch
      November 21, 2013 at 2:26 pm #

      I entered your info and got somewhat different results. Assuming two adults, no children and one smoker, I got $5.679 for a silver plan and $4,531 for a bronze plan. At your income, a bronze plan would probably make more sense, but you aren’t obligated under Obamacare to buy any health insurance and would face no penalty.

      Of course, in a more progressive state you’d be eligible for Medicaid. It’s ridiculous that you’re not eligible for it there. If you can’t move to a state that’s less hostile to low-income people, you might go back to healthcare.gov or your state Medicaid website and see if you’re eligible for other financial assistance.

      North Carolina should be embarrassed that someone with your income isn’t covered by its state’s Medicaid program. Keep that in mind when the next election for governor rolls around. If you’re really “Fed Up”, that’s the only way to change it.

  2. Donald Quixote
    November 15, 2013 at 12:24 pm #

    Obamacare (Affordable Care Act) has its pros and cons. Greater access to healthcare for individuals who would otherwise not be able to receive it like those with preexisting conditions or sometimes the elderly. This is great, but as I look around I am one of those taking the bullet. Money to afford such a system does not magically appear and the forced mandate exists so everyone enrolls which effectively spreads the risk as well as costs. An insurance company previously would not take on someone with preexisting conditions because of the high risk of a claim they represented, but if you throw in a dozen or so healthy individuals who will pay premiums without making claims and the risk is balanced. I will probably enjoy the benefits of such a program in the distant future (if it is still around, S.S. is going down the tubes), but as part of the rising generation with a decent job I will most likely carry medicare, medicaid, S.S., Obamacare on my back for most of my life to reap little if any benefits. Every policy has its winners and losers. Unfortunately for most of these social agendas I find myself the loser.

    • John Lynch
      November 18, 2013 at 11:31 am #

      I think you’ve got the right perspective, Donald, but may be wrong on some of your assumptions. For starters, Social Security (S.S.) isn’t going down the tubes. It’s financially viable for decades longer than Medicare and that can be extended even further with relatively minor tweaks. And studies show that future beneficiaries will get out of S.S. much more than current and prior generations, so I’d lose the pessimism on that count.

      As for Obamacare, you’re correct that there are winners and losers. But even the “losers” aren’t really losers if they end up with upgraded health insurance that will actually keep them out of bankruptcy where many with junk insurance policies now end up. Will they have to pay more for better insurance? Some will, some won’t if they qualify for federal tax subsidies. But since don’t you get what you pay for?

      Instead of viewing yourself as a loser destined to carry the burden of these programs on your back, I’d suggest thinking about Obamacare as actually extending the life of Medicare by phasing out the corporate welfare around Medicare Part D drug payments to the pharma industry and supplemental insurance giveaways to the insurance industry. These will help assure it IS around for you when your time comes.

      As for the others, like Medicaid, maybe you should just be grateful you DON’T need them.

  3. Fit After Fifty
    November 4, 2013 at 6:19 pm #

    I loved your comparison of the Obamacare smear campaign to the reverse mortgage scams that plague daytime television. Seniors are especially vulnerable to these and other scams.

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