The Good and Bad of Obamacare

May 28, 2018     About this blog:  click here

The Good and Bad of Obamacare

”Obamacare,” also known by its official title, the Affordable Care Act – or ACA – Has been a subject of intense controversy ever since it was first proposed back in 2009.

It’s also very complicated, with many parts.  That makes it hard to understand in full, and easy for people to get misinformed about it.

One common question is:  What does it do to Medicare?  The answer is:  Not as much as you might assume, but it does have some effects on it.

First, let’s sketch out, in brief, the major aspects of the ACA as a whole, and then after that, look at how it makes a difference with Medicare.   We won’t go into all the details – that would take months.

Obamacare – the Big Picture:

The basic idea was to make health care coverage affordable for many more Americans, and reduce the number of people with no health insurance at all.  The ACA states a goal of making it affordable for everyone, but it’s only aimed partway at that goal.

Most – but not all — of the ACA is aimed at people who are NOT on Medicare.  People on Medicare are deemed to be “insured,” even though there is a lot of expense that Medicare does not cover.

Affordable health Coverage:

The ACA deals with this chiefly in two ways:  (1) Increasing the income limits to be eligible for the government Medicaid program; and (2) Providing government subsidies to many other people, to help pay for insurance premiums.

These changes have made health coverage affordable for tens of millions of people, although there are still 40 million uninsured (about 12% of the population).

Most people who get insurance from their employer, especially bigger companies, are NOT affected by the ACA.

One problem with the ACA is that it is optional for states to increase the eligibility for Medicaid, and 18 of them did not do it.

Some other, very important ACA changes are:

  1. It forbids insurance companies from denying, delaying or limiting coverage because of your medical condition.
  2. It reduced how much more older people (age 50 to 64) must pay for coverage compared to younger ones.
  3. It lets young people stay on their parent’s policies up to age 26.

The ACA also created on-line insurance “marketplaces” to make it easier for people to compare insurance choices, enroll in a plan, and apply for financial help (if you qualify).

And, it set up “Navigator” services for people to get free help to apply for all of this.

What’s not so great?

The ACA does not do a whole lot to hold down the cost of health care.  That, in turn, hurts the goal of affordable care, because there’s only so much money the government will hand over to pay for Medicaid and insurance premium subsidies.

Many more people have insurance than before, but many of them are underinsured – with high-deductible polices that don’t cover the first several thousand dollars of expense.  So, they end up paying out a lot, unless they’re pretty healthy.

Speaking of cost, we’re still using up a large amount of health care dollars, 15% to 25% or more, on administrative paper-pushing, plus ads, high executive compensation, and big profits, thanks to all of the insurance companies.

This in turn requires huge expense for all the work hospitals and clinics have to do to keep up with the insurance companies, and trying to get paid by them.

And, the ACA did nothing to deal with the ever-rising cost of prescription drugs for most people.

The ACA and Medicare

Here’s what the ACA did for people on Medicare:

The big item is it reduced what people have to pay for their drugs while in the “donut hole” of Part D drug insurance.  (This is only thing the ACA did about drug costs.)

It also eliminated co-pays for certain preventive screening tests, like mammograms and colonoscopies.

Behind the scenes, it tackled some health care costs:  It reduced some reimbursement amounts to hospitals.  And, it reduced the Medicare Advantage payments to insurance companies, since they were getting paid too much, with money wasted as extra profits.

What about “cutting our Medicare benefits?   No, that was not part of the ACA. False alarm.  As stated above, it reduced Medicare money going to insurance company profits; and it increased, not reduced, some benefits.

What about “death panels?   That, too, was pure misinformation.  It refers to Medicare offering to pay doctors for their time to explain, at their patient’s request, options for end-of-life care.

Our country ought to retain the positive improvements of the ACA (such as more affordability, and letting everyone get covered despite their medical condition) – and then make changes to overcome its shortcomings.

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