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What’s to inform about Obamacare

What’s to inform about Obamacare

What’s to inform about Obamacare: A User’s Guide on How to Inform Your Friends and Rivals about the Policy.

President Barack Obama’s signature on the health insurance reform bill at the White House, March 23, 2010. (Photo credit: Wikipedia)
The President’s much maligned health care law was passed and signed into law March 23, 2010. Since the law was passed, the Congressional mid-term elections saw a rush of Republican wins in the House of Representatives, which controls how laws passed are funded and thus enacted. Several of the reforms enacted by this law cannot be overridden by funding mandates in Congress, thus they will go in effect when the law requires them, but several portions of the law will undoubtedly be stopped via funding measures in future Congressional budgets. Below is a list of major effects of the law, and what they entail. I will make note within each portion how and when this piece of the puzzle can be enacted. Keep in mind. Only small portions of this law have already gone into effect. Large portions have yet to be enacted, and may be blocked by Republicans in Congress, especially if they win a larger majority in the upcoming elections.

1.) It allows parents to keep their children on their health insurance longer.

Enacted September 23, 2010, this provision allows parents to keep their adult (up to 26 years of age) children on their health insurance. This increases the age limit on most existing health insurance plans by two years, and allows college students who wish to stay in college to attain post-graduate degrees to stay on their parents health plan. This isn’t as huge a boon as Democrats typically make this out to be, as the previous maximum was 24 years of age, but it will still help a statistically significant number of people. Fortunately, as this is a law that does not require funding, Republicans won’t be able to do away with this unless they are able to get a large enough majority in future Congresses to repeal the entire law.

2.) It stops insurance companies from denying coverage based on pre-existing conditions.

Also enacted September 23, 2010, a portion of this provision stops insurance companies from denying health insurance or charge higher premiums for children under the age of 19 with pre-existing conditions. January 1, 2014, the remainder of this provision will go into effect, making it illegal to deny health insurance or charge higher premiums for all individuals with pre-existing conditions. This is the real halmark part of this legislation that would be devastating to lose. If Congress were to repeal the whole law, as Republicans continue to promise they would do, this portion of the law would be the greatest loss. People with cancer, AIDS, and other chronic debilitating diseases would most likely die at a much higher rate if this gets repealed, as their drugs are extremely expensive without good health insurance. Thankfully, though, as with above, this law does not require funding in order to work, so Republicans could not block its implimentation via funding changes.

3.) It sets up a health insurance exchange that will lower costs associated with getting health insurance, thus allowing people who previously couldn’t afford health insurance to get it.

This portion is one of the two pieces of this law that can most easily be sabotaged by funding limits imposed by Congress. This part puts into effect an exchange that uses a combination of government price controls and free market cost saving measures to keep prices down for customers seeking insurance. There, however, is an additional reform in this that is not at all talked about often. Many states in the United States have only one or two health insurance companies offering private health insurance. This exchange would change that by offering health insurance from different states to all customers via a national exchange, which would be apart from the state-wide exchanges set up by the various state governments. As of January 1, 2014, these exchanges will provide lower cost alternatives to small businesses as well, thus lowering health care costs for small businesses. These exchanges will also benefit from subsidies which will help citizens who make between $22,050 and $88,200 to purchase these plans. This part of the law, as with the part below, is most especially susceptible to funding measures future Congresses may use to defund this law.

4.) It greatly expands Medicaid and Medicare coverage for millions of Americans.

As with part 3) above, this section of the new law is greatly susceptible to defunding threats by Republicans in Congress. First, we see an increase in funding mandates and discounts available for seniors and disabled people via Medicare. This part has received a lot of press coverage over the fact that it cuts Medicare by $500 billion over 10 years. The part that is not mentioned is the fact that large proportion of these savings are achieved by cracking down on Medicare/Medicaid fraud, which is a massive problem. Doctors frequently charge exhorbitant fees for office visits and needlessly send patients to much more costly specialists. Additionally, this law increases the maximum income level for Medicaid to 133% of Federal Poverty Level for a family of 4, thus adding millions of children and adult parents, who ordinarily would not be able to afford insurance, to the Medicaid rolls. Finally, childless adults at or below Federal Poverty Level will be able to get Medicaid in 2014, thus adding further millions to eligibility. This portion of the law is, of course, the most expensive piece of this legislation. This is not to say, however, that it is not paid for. In fact, it is paid for via another piece of this legislation that began with this fiscal year. In 2012, a new Medicare Payroll Tax was implemented that taxes investment income at 3.8%. Considering the ups and downs of the Stock Market, its debateable whether or not this new tax will fully pay for everything the law newly covers, but does it matter? With these new laws, millions upon millions of Americans will have access to stable and quality health care. These Americans will be healthier and more productive. And isn’t that what’s most important?

Source: HgTransEcon


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