One of the key policy points of the 2016 US Presidential election was the Affordable Care Act. Often referred to as “Obamacare,” Republicans have since promised a “repeal and replace” mechanism to get rid of this healthcare law. For many people, the Affordable Care Act was one of the first opportunities they ever had to be able to obtain health insurance. For others, the rising prices of policies, combined with the individual mandate, made it virtually impossible to afford their insurance.
There are certainly several Affordable Care Act pros and cons that must be considered by all Americans during the Trump Administration and beyond. Here are a few of the most important key points to look at.
What Are the Pros of the Affordable Care Act?
1. It makes healthcare more affordable for a majority of people.
The Affordable Care Act requires insurance companies to spend a minimum of 80% of the premiums they collect on either medical care or improvements. If the insurance company fails to meet this threshold, it must refund premiums to the consumer to the point where that standard is reached.
2. It removes the idea of pre-existing conditions.
Before the Affordable Care Act, insurers could deny health insurance coverage to people who had suffered from a previous health emergency. Even being diagnosed with cancer and then driving it into remission was enough for an insurer to declare that the individual had a pre-existing condition so that coverage could be denied. Serious health issues, such as diabetes, or even a previous surgery, like to repair a knee from a sports injury, could also quality. This law removed the ability of insurers to do this.
3. It removes time limits that are placed on care.
The Affordable Care Act also removed the lifetime caps or specific time frames that people were given to use their insurance coverage. This means people can continuing accessing their coverage, even if their health care requires expensive treatments, because insurers can no longer exclude people due to how much their care actually costs over time.
4. Screenings and preventative services are covered by the Affordable Care Act.
Many preventative services, including care screenings, are included in the policies offered under the Affordable Care Act. Although these services would usually go straight to the deductible under most plans, under this law, the screens and services are generally offered with either a low copay, a no copay, or may be covered outside of the deductible rules.
5. It improves access to prescription medications.
Many Americans are unable to access or afford the life-saving medication that they need. This is due to the rising expenses of many medications. The number of generic drugs and brand name prescriptions that the Affordable Care Act covers makes it possible for more people to get the treatment they need. The amount of savings experienced under the Affordable Care Act in this area alone averages $3 billion per year.
6. It allows children to stay on a parent’s plan until the age of 26.
For young people, obtaining health insurance can be a difficult proposition. Even in the past, employers would often require 3-12 months of consistent full-time employment before offering health care insurance as a benefit. This meant most young people would choose to remain uncovered and avoid going to the doctor as much as possible. By allowing children to stay on a parent’s plan until the age of 26, it has provided millions of young adults with the coverage they need. At the same time, covering these youth provides relatively little risk to the insurance industry.
7. Many families qualify for credits through the Affordable Care Act.
Most families that are defined as being in the Middle Class, or living at or below 400% of the current poverty level, receive tax credits on their premiums. Medicaid expansion was also included in this law so that protections could be extended to households at 138% of the current Federal poverty level, which allowed more adults without children to receive coverage.
8. It increased the tax credits that businesses could claim for healthcare expenses.
Business with 50+ full-time employees would be required to provide health insurance under the Affordable Care Act. In return for this expense, tax credits that covered these expenses became available in the tax code.
9. It reduces the reliance people have on emergency room services.
Because of the coverages that are offered, insured individuals through the Affordable Care Act can access needed services, including treatment for mental health needs, without being required to access a local emergency room. This reduces individual treatment costs since ER services are typically more expensive, while also shifting the costs of services away from taxpayers and towards providers.
What Are the Cons of the Affordable Care Act?
1. It raises the cost of health insurance for many Americans.
The Affordable Care Act was intended to bring in more low income households to the insurance market. Low income individuals could receive government subsidies to make their insurance affordable. For higher income families, those subsidies were not made available. The law also requires a wider range of services and benefits to be covered, which means health insurance plans had to be generic instead of specifically tailored to individualized needs. This has caused premiums to rise dramatically over time.
2. There is an individual mandate which requires insurance or a fine.
Because the Affordable Care Act includes coverage for high risk groups of individuals, a mandate had to be implemented to include healthy individuals to offset the other group. This mandate requires insurance to be obtained or to pay a fine of up to 2% of one’s income. It is a fine that the Supreme Court viewed as a tax, so allow for it to be implemented.
3. More taxes were built into the Affordable Care Act.
Besides the individual mandate, the Affordable Care Act also requires additional taxes on medical devices and pharmaceutical sales. Individuals with high incomes also saw potential tax increases on certain income sources. Part of the funding also came from savings in Medicare payments, which reduced the number of doctors accepting this plan. In essence, the wealthiest in the US are being asked to fund the health care for the poorest.
4. It makes it difficult to access a doctor in some communities.
In rural areas, the Affordable Care Act brought hundreds of previously uninsured families into the healthcare community. This created more appointments for doctors, which reduced physician access for everyone. Even in the first year of the law’s implementation, it was not unusual for a waitlist of up to 6 months to form when accessing optional services from local doctors.
5. Enrolling in the Affordable Care Act is an extensive process.
Since having health insurance is required because of the Affordable Care Act, many are forced to endure a very complicated enrollment process. Public health agencies, hospitals, and other social services or medical providers set up assistance programs to guide consumers through this process, but the complication of finding the right coverage for the right need can be a somewhat tricky process to get right – even with help.
6. Some businesses cut employee hours to avoid the coverage mandates.
Under the Affordable Care Act, any business with 50+ full-time employees is required to offer insurance or make payments to cover employee healthcare expenses. To avoid this coverage mandate, some business owners decided to cut the hours of their employees to less than 30 hours per week, which allowed them to be classified as a part-time worker so that the required costs could be avoided.
7. Many private health insurance plans were canceled because of the Affordable Care Act.
Because the Affordable Care Act requires 10 essential services to be provided, insurers canceled many plans instead of changing them. This caused many families to lose their affordable insurance, being forced to replace it with a higher cost plan that included services that many people didn’t need or want. Maternity care is often the most cited example of the problems this law created in this area.
8. It increased the medical expense deduction for all families.
Before the Affordable Care Act, families could itemize and deduct medical expenses which exceeded 7.5% of their income for that year. In 2013, the law changes this so that deductions couldn’t begin until families spent at least 10% of their income on medical expenses. For a family of 6 earning $100,000 per year, that meant an additional $2,500 that could not be deducted.
The Affordable Care Act pros and cons must be considered in full before any repeal and replacement is offered. There are many benefits that have been experienced, but those benefits do have a very real cost for many families that has been difficult to endure. One thing is for certain: many people who didn’t or couldn’t have health insurance before do have it now. That fact deserves to be recognized, whether one is for or against this law.