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Obamacare: in Plain English

Updated on May 29, 2013
Obama Health Care Speech to Joint Session of Congress
Obama Health Care Speech to Joint Session of Congress | Source

Understanding effects of the law will help ease the spookiness factor.

Click HERE for an ACA/Obamacare reference guide

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Our health care system is, for all intents & purposes, broken. Rather than targeted prevention, we administer countless tests & treatments & procedures. Rather than results-based reward system, we mostly rely upon fee-for-service care. Rather than a public-option of expanded Medicare, we have an individual mandate with Obamacare.

So what is ACA/Obamacare? and how did we get here?

While rhetoric would suggest otherwise - an individual mandate is the conservative approach of personal responsibility to universal coverage. Just ask the Heritage Foundation, Newt Gingrich and Mitt Romney.

Irregardless of the Supreme Court ruling, some conservatives are yet and still up in arms about Obamacare. The 112th Congress voted 33 times in an effort to repeal the law, costing us taxpayers $50 million. Republican governors are claiming refusal to implement the law in their states. More extreme voices have said It's a government takeover of healthcare. It's Socialism!

It is neither.

Being the good friend that I am, I did a bit of research on the Patient Protection and Affordable Act - detailed here for your convenience - so I might be able to allay some apprehensions of my conservatives brothers and sisters.

I have heard complaints that Obamacare is the largest tax increase in history. Some claim Obamacare is unwanted and unconstitutional - even since SCOTUS made their ruling. I would argue that there is a bit of evidence on this subject. Real life evidence in fact - as in Massachusetts - where literally less than one percent of residents choose to pay a tax penalty rather than procure themselves insurance coverage they could readily afford. And I believe the SCOTUS and Chief Justice Stevens addressed the constitutionality aspect, putting to rest any 10th Amendment concerns on the subject. “Original intent” is an altogether different conversation - I digress...

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Realities

Maybe I should back up a little and take a meta approach. Let me start with the problem - the what; the U.S. spends roughly a third more than any other country on health care, or roughly 18% GDP at this point.

And we are the only civilized western nation without universal health care. Not for a lack of effort mind you, there have been attempts to adopt universal health coverage since Presidents Roosevelt and Truman.

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E.R.

The EMTALA Act of 1986 says that if a hospital (excluding military hospitals) wishes to accept Medicare payments - which they do - they must provide emergency care regardless of coverage. Good luck with your cancer.

While that model is horrible, since the costs are passed along to the paying customers...

The good news is that this is the key to implementation of Obamacare - hospitals will be required to give the care and states will pay the taxes - so Republican governors will feel great pressure to cave on their intransigence.

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Social Contract

We have decided as a country - by enacting Medicare, Medicaid, and Social Security - that we must care for the poor, the elderly, and the disabled.

As a benevolent people, we understand that the care of the poor and disabled should not be dependent upon their family's wealth.

As a reasonable people, we have determined that the private insurance market has no profit, nor any interest, in covering health care needs of the elderly. And why would they? Our health costs while we are young and strong are relatively minimal - while the largest chunk is absorbed in our twilight years.

Most of us agree that we need these programs - what people must not assume is that they are free. We want the benefits, so we have to pay the cost. Our problem now is that our economy tanked by way of the housing market - at the same time health care costs have gone out of control. So yes, we need to find health care savings to ease the budgetary strains - but don't make the mistake of blaming our social programs for the problems with our healthcare system.

Primum Non Nocere

While some have been opposed to our social safety net since inception, these are the most popular programs in our country. And for good reason; Medicare has remained steady at about 6% GDP - while annual double digit rate increases for health insurance in the private market have pushed the cost to 12% GDP.

Perhaps most telling is this - insolvency projections for Medicare have remained relatively static at roughly 11 years - for literally decades now. While those opposed to the safety net are once again crying wolf - we must reform these programs to save them - this is simply their modus operandi.

The GOP want a Democratic president to cut our most popular programs - which I fear will happen- so that they can then turn around and blame Dems in the next election cycle for doing just that.

The response to this should be that Obama spent all of his first-term political capital on passing Obamacare - so let's see how that works out. It won't be fully in place until 2017, so give it a chance. It has already served to slow the rise in costs - if not yet enough.

Also, seniors should be able to negotiate for lower prescription drug prices.

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Bad Ideas

We should not raise the eligibility age. While it seems reasonable since we are living longer - unfortunately poor people are not, in fact, living any longer. Bad idea. Plus, all that would accomplish would be to shift the burden from the federal gov't onto 60-somethings with outrageously expensive health care costs. Same difference with the voucher plan - it's just pushing costs onto senior citizens just to make the budget numbers look better. Likewise with the chained-CPI proposal; Worse Ideas yet. And no block grants. That is just a way for states to try and pocket the money and use it for other things while leaving the needy out in the cold.

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Obamacare

Obamacare says if you already have insurance, you can keep it. Along with some new bonuses. Parents can keep kids of up to 26 years of age on their plans. Insurance companies can no longer discriminate against people with pre-existing conditions. Insurance companies can no longer put annual limits or lifetime caps on an individual’s medical costs. Insurance companies will also be required to spend 85% of your premium on your medical costs, or you get a rebate to covering the difference. Insurance premiums will be capped at 2% of annual income for the less fortunate among us (up to 133% of Federal Poverty Level) and capped at 9.5% for people making at least 400% of FPL. Medicaid is expanded to allow parents and children making less than 133% of FPL with Federal Medical Assistance Percentage. Also, the “donut-hole” in seniors coverage is filled while brand-name prescription-drug prices are reduced. Purchase health insurance, you get a tax credit. Small businesses also get a tax credit under Obamacare. Penalties for Medicare-fraud will be increased. Women will no longer be subject to price discrimination on their premiums. Plus, government health programs will be persuaded to save themselves more money by purchasing cheaper generic drugs.

And there seems to the rub, “government health programs.” Big government all up in my business. All up in my healthcare.

To be clear, the mandate encourages people to acquire health insurance for themselves. From a private insurance company. Either through employers or otherwise. The government is not taking over any private insurance companies, they are nudging more people into the health insurance market. Increased market for private companies. This is not a government takeover of private industry.

Obamacare offers choices. If you would like, you can choose to forgo the current system of pooling our resources with employer-based coverage, and you can choose to instead enter an insurance pool at the state level through a state exchange program, and you still purchase your coverage from a private insurance company through the state.

So. Brass tacks (brass… tax. Sorry, I digress…), you can choose to procure health insurance for yourself, and show proof of your health insurance in your tax filing, or else you are assessed a tax penalty of $95 (or 1% of income) beginning in 2014 (and is capped at either $695, or 2.5% of income after 2016). Strangely, there's no punishment enumerated in the Affordable Care Act if you don't pay the tax penalty. That’s simply the mechanism and the amount of the tax penalty associated with the individual mandate that we are so afraid of, and in Massachusetts, a mere 1% opt to pay the penalty. Band-aid removed. Now, that wasn’t so bad, was it?

Thus...

Weighed separately, the provisions in the Patient Protection and Affordable Care Act are exceedingly popular. It’s the “pay for”, the prospect of “mandated” change, and the very scary name of “Obamacare”, that has yet to sink in with people. It’s really not a scary story, we just need to shine more light on the subject so we all can see exactly how our lives will be positively effected going forward, and then share that info with our conservative friends. Obamacare is not a single-payer expansion of Medicare, but it's a step in the right direction. Remember, until people saw the real-life benefits, Social Security and Medicare were derided as “the end of freedom” and “the rise of socialism” in their times, too. I’d say Obamacare is in pretty good company.

8/16/12

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    • Justin Earick profile image
      Author

      Justin Earick 3 years ago from Tacoma, WA

      By the way, I m personally affected by Obamacare. In case you were wondering, I qualify for Washington Apple Health under Medicaid expansion. While finding a doctor who takes said insurance represents a task, the coverage is admirable.

      More germane to your concerns, my personal job has also been affected. The business has a few hundred employees at most (among multiple locations). Unfortunately, the owner relies upon her sister for accounting. Both of them are right-wingers. They actually believe that no employee can ever go over 30 hours all of a sudden, or else the Employee Mandate (Obama!).

      As you know, the employee mandate has been delayed by a year (if ever, honestly), so this makes little sense (average, not ever)... Regardless (and to your point), the employer mandate applies to business with fewer than 1500 total hours worked (30 hours x 50 full-time equivalent employees). My specific employer does require over 1500 hours worked, so we definitely apply. Yet employer somehow thinks that no employee can ever go above 30 hours, or else penalties (which already definitely apply, given 1500 threshold) . People have quit. We've lost quality employees because our boss/sister doesn't understand the law... Thanks Obama!

      So again, I agree. Partisan misunderstanding can be consequential.

    • Justin Earick profile image
      Author

      Justin Earick 3 years ago from Tacoma, WA

      You are correct - Obama said, not Obamacare says. Fortunately, I've already addressed this issue for your convenience.

      https://hubpages.com/politics/Obamas-Keep-Your-Ins...

      A grandfather clause is not a complicated concept. And yes, there are many plans you can no longer purchase - plans failing to cover prescription drugs, mental health, maternity care, or contraception, for instance. Insurance plans are now required to provide more comprehensive coverage (without a surcharge for being a woman, or for being mentally disabled, for instance), and that was one of the main points of the law. If you change(d) you insurance plan after the grandfather clause (when the law was signed), then said grandfather clause no longer applies by very definition. Again, not a complicated concept. Complications emerged from a lazy (and admittedly lazily repeated) talking-point, not the policy itself (though I personally prefer single-payer, or at least a public option).

    • Jester Financial profile image

      Dan McGrath 3 years ago from Boston, MA

      Have you read the bill? You quote that Obamacare states you can keep your health insurance, but it doesn't, the President said it, but the law doesn't.

      In fact on page 41 it lists the reasons why you can't keep your incurance.

      How about mentioning the Medicaid Expansion that also ties into the Medicaid Recovery Act on the fed level, which leads directly into the 29 states that have Filial Laws.

      Please, read the law from a non-biased point of view and see where this all headed

    • Justin Earick profile image
      Author

      Justin Earick 4 years ago from Tacoma, WA

      Al - Congressfolks do not read any of the bills. Their staffers read the bills for them and explain. They actually develop codes to condense legislative language so the staffers don't actually need to read the entire text of bills.

      Politicians who rock the boat are then castigated.

      We don't have a single-payer option; and we don't have the expanded Medicare option , because the insurance industry is too wealthy & thus too powerful to allow real reform.

    • profile image

      Al jehning of mountain View, 4 years ago

      Sorry you DoNot Have all the correct Facts,Employers do not understand the code and are looking for way to avoid this law. Please go back to review all aspect of this much complacate law for future years. I am no expert but have read and heard too many that have read the law. And do you also know that not one senator nor congress member has read this law. Isn't time they do if they truly rep us?

    • profile image

      SassySue1963 5 years ago

      There are good things in the plan. The pre-existing conditions clauses, kids staying on their parents' health plans until age 26. No one argues that these are good things.

      I do have to point out though, that the mandate tax is not capped at all. The $695 figure you quote is the final flat tax figure, that is true. However, after 2016, the percentage rises dramatically and increases every year after that.

      from the Law itself:

      "INDEXING OF AMOUNT.—In the case of

      any calendar year beginning after 2016, the dollar amount shall be equal to $695,

      increased by an amount equal to—

      ‘‘(i) $695, multiplied by

      ‘‘(ii) the cost-of-living adjustment de9

      termined under section 1(f)(3) for the cal10

      endar year, determined by substituting

      calendar year 2015’ for ‘calendar year 1992’

      in subparagraph (B) thereof."

      Notice the "multiplied by" term for the base $750. Further there is a sort of cap at 300% times the $695. You can do the math. So it really equals no cap at all.

      I disagree that it encourages anyone to do anything. Those who can afford insurance, have it for the most part. Who wouldn't? Only those who already can't afford it will be punished for not purchasing it. Even if the Medicaid rolls are expanded (and 17 states have already opted out) that only covers 133% of the poverty line. That is only $30,000 for a family of 4 and $13,000 for a single person. Do you think those people can afford an insurance premium? Those are the people who will be paying this new tax.

    • sapphire99336 profile image

      sapphire99336 5 years ago from Kennewick, WA

      Nice hub. It's so frustrating how many people continue to misunderstand "Obamacare." They say they hate Obamacare, but then if you ask them if things in it separately, like insurance companies not being able to discriminate against people with pre-existing conditions, etc., they say they like those things. Some people just need to calm down and think about what the bill actually says. Hopefully some of these people will read your hub.