Obamacare Pros & Cons

Healthcare is an expensive service, even in a developed and industrialized country like the United States. Hospital admission for one day in the U.S. would cost an estimated amount of $10,000. According to an analysis done by the Organization for Economic Co-operation and Development (OECD), the United States spends more (16.9% of gross domestic product) on healthcare than any one of the high-income countries. Obamacare may address the subpar outcomes in terms of:

• Life expectancy rates (the lowest among its peer countries)
• Suicide rates (the highest)
• Obesity rates (the highest)
• Chronic disease burden (the highest)
• Supply of physicians (low)
• Disease morbidity (highest from preventable causes)
• Mortality rates (highest from avoidable causes)

This is even though the United States has access to expensive technologies (e.g., MRIs) and specialized therapeutic procedures (e.g., hip replacements).

Yet, the U.S. sets an example to its other developed peers when it comes to disease prevention. America boasts the highest screening rates for breast cancer and second-highest rates for flu vaccination in the elderly.

Points To Note About The U.S. Healthcare System

To understand what Obamacare changed about the U.S. healthcare system, let us have a sneak peek into the primary outlines of the American healthcare system.

• In the United States, there is no universal healthcare. This means that the government does not provide health benefits to its citizens. You need to pay for medical care when you need it.
• Facilities providing healthcare in the U.S. are primarily owned and operated by private sector businesses. 58% of the community hospitals are non-profit, while 21% are for profit. The government owns 21% of such community hospitals 
• Healthcare coverage is provided via private health insurance companies or public health coverage (e.g., Medicare, Medicaid, the Children’s Health Insurance Program, and the Veterans Health Administration) or both
• Individuals under 65 are either insured or buy insurance. The health insurance purchases are made either on their own or via their or a family member’s employer, getting assistance from the government or service based on their income or any particular disease condition. The government pays for the health insurance of the public sector employees due to their role as employers
• To get health insurance in the U.S., regular payments (called “premiums”) are paid to a health insurance company. According to the rules and regulations of that health insurance company, the insurance is paid against some or all of your medical bills if you get sick or require medical treatment
• A primary care provider (PCP) caters to any medical treatment that you may require. That PCP is part of the particular insurance healthcare system.
• Urgent cases are seen under emergency care by the PCP. For routine and follow-ups, you need to make an appointment

What Is Obamacare?

The number of (health) uninsured people in the United States is more than 27 million. This is a huge red flag for the advocates of the health reforms in the U.S.

According to a study report, about sixty thousand deaths could be prevented every year, cutting back on the disease mortality rates if more people had health insurance.

Another study done at the Harvard Medical School showed that about 45,000 patient deaths per year occur due to lack of health insurance. The study also compared the mortality rate between uninsured and insured working Americans. It reported that the mortality (death) risk multiplied 40% in insured, working American than their counterparts who had private health insurance.

Why? Because the person who succumbs to disease has no way to consult a PCP and get the medications required. And although the U.S. has access to some highly advanced and expensive treatment technologies, people are dying because they do not have the means to acquire them when needed.

It is here that any more talk on healthcare and health insurance would be incomplete without Obamacare. Formally known as the Patient Protection and Affordable Care Act, the Obamacare or the Affordable Care Act is a law of the United States to regulate healthcare and health insurance. Signed on 23 March 2010 by the former president of the United States, Barack Obama, the law is the most significant refurbishment of the healthcare system of the U.S., preceded only by the Medicare and Medicaid of 1965. The act aims to improve the cost of healthcare and to make it more affordable for everyday Americans. The law not only tackles the issue of health insurance but focuses on changing the health delivery system all across the country.

The Principles Of Obamacare

Obamacare’s main driving force is to cut the ever-rising cost of healthcare amenities. It meant health insurance was both affordable and available to the most in need. The act extended Medicaid to the population that hit 138% of the federal poverty level.

The act also made it obligatory to get health insurance; otherwise, the rule applied; pay a tax penalty. Also, the act made it mandatory for health insurance companies to include and cover individuals with pre-existing health conditions. This was a huge step in reducing the number of people visiting hospitals because the individuals with pre-existing conditions could not access preventive care.

Before the Affordable Act, the insurance companies were at liberty to exclude people with chronic disease from their health insurance plans. This chunk of the population had to resort to stay uninsured or settle for subpar insurance policies. This did not make their disease settle down in any way. This portion of the population needed regular doctor visits, without which they ended up in hospital emergency departments. All of it resulted in increasing the burden and increasing the cost of healthcare resources.

Obamacare aimed to help cut the cost of healthcare and the burden on healthcare resources by catering to preventive medicine. It also removed the restriction applied on healthcare amenities for the American people.

Obamacare instructs the insurance companies to permit parents to include their children (aged up to 26) in the plans. This was in addition to the following ten essential services the insurance companies needed to cover.

• Outpatient care
• Emergency or urgent care services
•  Hospitalization
• Preventive care, including chronic disease management
• Mother (pre and post-natal) and child care (before and after birth)
• Mental and behavioral health treatment, including substance abuse therapies
• Rehabilitative services for people with injuries, disabilities, or chronic conditions
• Lab tests
• Pediatric care
• Prescription drugs

Some additional healthcare amenities recommended to be covered in insurance plans include:

• Birth control
• Breastfeeding
• Dental
• Vision
• Medical management for specific needs like weight loss, diabetes, body pain, etc.

The Pros And Cons Of Obamacare

Obamacare helped deliver health insurance to many; those who were too poor or unemployed had a disability or personal obligations that stopped them from working, or those with chronic disease conditions. But where there are advocates, there is opposition as well. And Obamacare had its share of criticism and opposition.

The Ace Points Of Obamacare

1. Health Insurance For Everyone

Obamacare made it mandatory for everyone to get health insurance. As a result, a rise in the number of applicants was seen within the first five years of the Affordable Care Act. Around sixteen million new subscribers made it to get health insurance. A majority of them were young Americans.

2. More Affordable Health Insurance

The ACA also made it mandatory for health insurance companies to use 80% of their premiums on providing medical care. The insurance companies cannot increase the premiums’ costs on their own. Besides, they are also obliged to provide coverage for a wide range of healthcare amenities.

3. Health Insurance For Chronic Disease

The Affordable Care Act has extended the health insurance coverage to include chronic disease states. Earlier, the insurance companies could deny insurance for chronic diseases like diabetes, cancer, chronic pain conditions, etc., by saying that the illness happened before acquiring the insurance plan. Now, they do not have this option, which is good news.

4. Unlimited Insurance Coverage

Obamacare also dictates the insurance companies to provide insurance without placing a fixed budget on an individual’s healthcare requirements. It means that the ACA eliminates lifetime and annual coverage costs. It is an excellent convenience for clients with chronic disease as they do not face the risk of running out of health insurance.

5. Inclusion Of Preventive Care In insurance Policies

This was a significant step in reducing the cost of healthcare. The ACA included preventive healthcare facilities to cut the morbidity and mortality rates and decrease the chronic disease prevalence. There will bear less burden on insurance companies through the practice of self and preventive care. The results will bear results in the long term.

For example, if a person suffers from pre-diabetes, it is unnecessary to treat the condition with medication. Adopting healthy lifestyle changes can prevent the progress to full-blown disease. Similarly, early detection of breast or colon cancer via screening tests covered by health insurance can improve the quality and save one’s life. So mortality rates come down.

6. Reduced Prices Of Prescription Drugs

The number of prescription and generic drugs included in the ACA is growing because it has made room for it. The elderly, especially in their post-retirement years, cannot afford to buy all of their medications. Obamacare tries to ensure that it happens.

7. Retardation Of Overall Healthcare Cost

The ACA rule to provide health insurance for all and to include preventive care significantly cuts back at total healthcare cost. An individual gets the necessary treatment for a disease before ending up in the emergency and paying hefty amounts for urgent care.

8. Extended Provision Of Insurance

Obamacare extends the insurance and includes ten essentials in healthcare coverage plans. Also, since children can stay on their parent’s health insurance plans till age 26, it has increased revenue for the insurance companies. The results were evident by the enrollment of young Americans in the sign-ups. The middle class receives tax credits on their premiums, which has enabled Medicaid expansion to 138% of the federal poverty level. It has made it possible to provide insurance coverage to adults without children for the first time.

The Downsides Of Obamacare

1. Penalty For Not Acquiring Health Insurance

Obamacare believes that the cost of a person not being insured is passed on to others having the insurance. Some may find the rule of having health insurance mandatory as an intrusive action on the part of the government. That is why, though the mandate remains; the individual mandate penalty ceases to apply from 2018 to date. However, in some areas of the country, the rule still applies if a person chooses to remain uninsured or does not avail of exemption. As of 2021, these areas include:

• Massachusetts
• New Jersey
• California
• Rhode Island
• District of Columbia

These states have implemented their mandates and penalties in response to the ACA.

2. Payment Of Higher Premiums                     

Because the insurance companies have to provide coverage for a range of healthcare amenities, old and newly added, the cost of the payable premiums has gone up. This is a disadvantage as far as people who already had health insurance.

3. More Taxes

Several new taxes were imposed on healthcare amenities involving medical devices and pharmaceutical products. People with high incomes were also required to pay more taxes. For instance, the ACA raised the income tax rate (from 1.45% to 2.35%) for individuals with incomes above $200,000 in 2013. The wealthy also paid an additional 3.8% Medicare tax on investment income.

4. Short Window Period For Enrollment

The online website for the ACA had technical shortcomings when launched for the first time. It led to delays and the sign-ups were lower than expected. People had no or less knowledge of the sign-up procedures. The short window period for enrollment (about six weeks) does not help either. Getting enrolled for health insurance regarding family or business is tricky enough.

The problem has been dealt with quite effectively. It has allowed new businesses and help-centers to pop up that guide consumers through the sign-up process. Hospitals and public health agencies have also taken up the task of guiding their clients.

5. Reduced Employee Hours

According to the Affordable Care Act, a business with 50 or more full-time employees must offer insurance that complies with ACA health coverage. A business employer can go for that or make payments to cover healthcare expenses for a company’s employees or pay the penalty to the IRS. The full-time employee definition according to the ACA standard is the one who regularly works for thirty hours per week.

This wasn’t good for the full-time employees. Between three to five million people lost their employment-based health insurance. They lost their full-time employee status as well as their healthcare coverage.

Though full-time jobs have increased in numbers, the business owners are cutting employees’ work hours to sideways the health insurance or payment for healthcare services. This enables the businesses to get by the 30-hour-per-week definition of a full-time employee.

The ACA is subject to change and it has gone through amendments. The opposition may seem a lot because of the overwhelming negative publicity against the ACA, but the law is here to stay. If 54% opposed it, then the rest of the 46% applauded Obamacare and tables can be turned owing to the changing governments and the ever-changing budget decisions.

References

1. https://www.commonwealthfund.org/publications/issue-briefs/2020/jan/us-health-care-global-perspective-2019
2. https://www.commonwealthfund.org/publications/fund-reports/2017/jul/mirror-mirror-2017-international-comparison-reflects-flaws-and
3. https://www.aha.org/statistics/fast-facts-us-hospitals
4. https://news.harvard.edu/gazette/story/2009/09/new-study-finds-45000-deaths-annually-linked-to-lack-of-health-coverage/
5. https://www.healthcare.gov/young-adults/children-under-26/
6. https://www.healthcare.gov/coverage/what-marketplace-plans-cover/
7. https://aspe.hhs.gov/system/files/pdf/139211/ib_uninsured_change.pdf
8. https://www.healthcare.gov/medicaid-chip/medicaid-expansion-and-you/
9. https://www.hhs.gov/sites/default/files/ppacacon.pdf
10. https://www.cbo.gov/publication/43090