Obamacare or the Affordable Care Act (ACA) is an overhaul of the U.S. healthcare system that is designed to increase the quality and affordability of health insurance, lessen the number of uninsured people, and ensure that costs of healthcare for individuals and the government are reduced. Years after its implementation, it has encountered successes and challenges, making it one of the most debated topics in American politics. But like any new law, it has its positive and negative parts. Below is a list of the pros and cons of Obamacare presented in an unbiased manner.
List of Unbiased Pros of Obamacare
1. On the price ratio
With the Obamacare health insurance, healthy, younger and richer (those with a decent job) individuals will pay more, while unhealthy, older and poorer ones will pay less. This may seem unfair depending on which bracket you fall into, but if you are healthy and can afford to be insured, it is only fair that you pay more. Or so, the law states.
2. On child care coverage
Children under the age of 19 are guaranteed insurable under ACA. This means parents can now afford to keep doctor’s appointments for their child, enabling them to take advantage of preventive care options, such as vaccinations, at a reduced cost or free of charge. Child protection is further widened with the extension of children on parents plans that is increased from age 24 to 26.
3. On healthcare coverage
Pre-existing conditions would no longer factor in whether or not you qualify for a health insurance, because Obamacare prohibits any insurance company from denying coverage because of pre-existing illnesses. All plans under ACA also include free preventive and wellness office visits, and free contraception for women. There’s also no lifetime limit on health insurance coverage, and denied claims would have a better appeal process.
4. On group plans
The insurance industry used to be focused on individual coverage, but Obamacare has shifted that to group plans, enabling households with self-employed workers to be insured with a better coverage at better rates. For individual plans, health insurance companies must pay at least 20% overhead expenses to provide 80% on health benefits. But with group plans, only 15% overhead expenses are involved for health benefits of 85%.
List of Unbiased Cons of Obamacare
1. Tax penalties are enforced
Individuals with no health insurance will have to pay tax penalties with the IRS. As of 2015, penalty is at $325 per person per year or 2% of their income. By 2016, the cost will increase to 2.5% of the income or $695 per person per year. If a person still doesn’t have health insurance by 2017, the amount of tax penalty will be based on the rate of inflation. Anyone who doesn’t want to be burdened with these penalties would be forced to buy health insurance.
2. Tax implications on various entities
Because Obamacare is made affordable to everyone, new taxes are imposed on high-income earners and the healthcare industry to cover the rest of the cost. Indoor tanning will have an associated 10% excise tax, manufacturers of medical devices will be taxed by 2.3% of their gross sales, U.S. drug manufacturers will be charged with annual fees based on their gross sales, Medicare tax of people earning above $200,000 for singles and $250,000 for married people is increased from 1.9% to 2.45 %, and capital gains tax is increased to an additional 3.8%. Tax deduction on health insurance expenses will also increase from 7.5% of an individual’s income to 10%, which makes a huge difference.
3. Impact on business owners
There’s no getting away from the health insurance law, especially for business owners with more than 50 workers. Although the first 30 workers are excluded, they would have to pay a federal fee of $2000 for each employee working full-time but is not provided with a company sponsored healthcare coverage. Because of this, business owners would resort to increasing its part-time workforce, which will have an adverse effect on employment and the living conditions of a worker and their family members. You have to admit that part-time salary would be lower, and people would have to get more jobs to compensate.
The good news is smaller businesses that will purchase coverage will enjoy tax credits of up to 35%. If companies feel this is enough to cover their overhead expenses, Obamacare would prove beneficial.
4. Negative effects on Medicare
Even before ACA, the future of Medicare was already uncertain, but the new healthcare law has made it worst. Obamacare will reduce Medicare reimbursement by $716 billion over the next 10 years, based on a report by the Congressional Budget Office. This will affect Part A providers, such as nursing homes, hospices, and skilled nursing facilities. Along with sizable reductions in payment, access to care will also shrink.
The so-called Medicare savings and payroll taxes, which are supposed to increase the solvency of Part A trust fund, are actually spent paying for Obamacare’s new entitlement costs. Under the circumstances, Medicare’s Part A trust fund is projected to be insolvent by 2026.
5. Has hidden implications
There are a lot of things about Obamacare that the government doesn’t want the people to know; one of these is the limit on eligibility for cancer treatment. At 76, when healthcare is most important, cancer care will no longer be available.
Although it is great that everyone will have access to affordable healthcare insurance, this can have a negative impact on the kind of services that will be provided. Because more people can now afford to visit a doctor, long queues and waiting hours are to be expected. There will be a natural tendency to cut corners just to accommodate everyone. You can only hope the clinic or hospital that you are visiting would stick to the oath they made and maintain their integrity.
In order to make an informed decision, it is best to look at the facts associated with the pros and cons of Obamacare. Sure, people will say that taxes will be increased, but by how much? It is important to get all the facts before taking sides.