The Affordable Care Act (ACA), or what is colloquially known as Obamacare, is a federal statute of the United States that was signed into law on March 23, 2010 by President Barack Obama. It is one of the most significant regulatory overhauls of the U.S. healthcare system, together with the Amendment of the Health Care and Education Reconciliation Act, since Medicare and Medicaid was passed in 1965.
ACA was designed for specific reasons:
- To increase the quality and affordability of health insurance.
- To reduce the number of people who are uninsured.
- To ensure that healthcare cost for individuals and the government is reduced.
For all its good intentions, however, ACA is not widely received with open arms. In fact, the number of negative messages conveyed to Americans regarding the act is 15 times more than the positive messages. It is true, however, that Obamacare has its share of pros and cons, which people should know and understand in order to fully make an informed decision about the act.
List of Pros of the Affordable Care Act
1. Access to low-cost insurance.
Those in favor of the health care legislation called ACA a “landmark legislation” and a “historic victory” that reformed the U.S. health care system, by making health care more affordable. Through subsidies that will help cover the costs, people who cannot afford health insurance will now be able to do so. Health insurance companies are also mandated to implement the 80/20 rule where they spend 80% on patient care and quality improvements, while keeping their profits and other costs at 20%. Affordable health insurance is also made possible through Medicaid expansion, the employers, and the health insurance marketplace. What is even better is that limits on coverage are eliminated.
2. Prevention of several diseases.
Under Obamacare, preventive care is free. Health insurance plans must cover a long list of preventive services, including screening for some cancers or diabetes, at no cost to you. Gynecological exams, lab work, and other and well-woman visits are now fully covered. There are also 26 preventive services for children that are covered, such as screening for autism or obesity, immunization and counseling.
Through the preventive services, people will be preemptively tested for possible ailments, especially because insurance policies now need to include the 10 essential health benefits. When an ailment is discovered earlier, expensive treatment can be avoided or reduced.
3. More people will qualify.
Through ACA, all insurance plans are required to cover the 10 essential health insurance benefits, which are emergency room services, lab test, hospitalization, maternity and newborn care, mental and behavioral health treatment, pediatric care, preventive and wellness visits, prescription drugs, outpatient care, and services and devices for people with injuries and other chronic conditions.
Patients that had been denied insurance before because their illness disqualifies them can now be covered. The act further widened the scope because insurance companies are no longer allowed to deny coverage to anyone with pre-existing conditions. They are also forbidden from dropping them or raising the premiums once a policyholder becomes sick.
Those whose do not qualify for Medicaid with an income of less than 400% of the federal poverty level will get tax credits instead.
4. Added coverage for children.
Children up to age 26 can now be added to their parent’s health insurance plans, providing them protection while they still can’t afford to pay for their own insurance. Even if they have preexisting health conditions, they would still be covered because Obamacare prohibits insurance companies from denying them protection. Coverage must also continue long after a policyholder gets sick, even when they were healthy when the policy was in place. In this instance, insurance companies will enjoy an increase in profit, since they receive premiums for children that are considerably healthier, and would stay healthy for a long time.
5. Business benefits.
The makeover on individual health insurance proves beneficial for small business owners. This is because employees now have the option to keep their old policy, even when they switch jobs, have the option to choose the coverage and the provider that best fit their needs, and be generally healthy because insurance plans now cover the 10 health benefits, regardless of pre-existing conditions. What is even better is that employers may be eligible for premium tax credits.
List of Cons of the Affordable Care Act
1. Massive cancellations of existing insurance plans.
An estimated 2.6 million people had their health insurance cancelled because it did not comply with Obamacare standards, according to Health Affairs. Cancellation is mainly because their old policy doesn’t meet the 10 essential health benefits. This made healthcare insurance more expensive to some people, because they now have to transition to other plans, shop for another insurance, and have services added, which were previously not included in their old plans.
Worst case scenario, 3 to 5 million people are at risk of losing their company-sponsored health care insurance, because businesses will find the new policy more expensive, what with all the inclusions. They would rather pay the penalty, than allow their employees to purchase their private insurance.
2. Initial high-cost burden.
During the first few years under Obamacare, the nature of the coverage will have high cost. After all, preventive testing and care is very expensive. Since it is given for free under ACA, many people would opt for it. This would mean high medical spending at the start.
3. Tax burden.
Remember that ACA is able to offer affordable health care insurance because of subsidies that will cover the rest of the cost. Where does the money come? From the new taxes imposed on high-income earners and the health care industry. The new taxes are sure to affect the individual mandate and the employer mandate.
People who do not have insurance or don’t qualify for Medicaid will be assessed a tax of 1% or $95, whichever is higher. This would mean that 1.2% of the population will end up paying the tax. Even more bad news, taxes have already been raised in 2013 on individuals with incomes exceeding $200,000 and couples filing jointly an income of $250,000. They also pay an additional Medicare tax at 3.8%. No wonder opponents of Obamacare called it an “unconstitutional” takeover on the health care system.