For years, health-care reform legislation has been one of the most talked-about subjects in the U.S. It's almost impossible for the public to ignore; the president, pundits and protesters put the health care debate front and center. You'd think that after all that talking, everyone would have a good idea about what's actually in the health care bill that was signed into law in March 2010. However, three years after the law took effect, only 25 percent of Americans claimed to understand the law's impact on themselves and their families -- and as many as 33 percent admitted they had little to no knowledge of the law [source: Page].
Myths and speculation abound regarding the law's actual contents -- what exactly is in the more than 2,000 pages of legislation? The Patient Protection and Affordable Care Act is supposed to reform insurance company policies, including things like making sure you're not refused coverage for pre-existing conditions or given a lifetime cap on service once you get sick. The law also requires that every American have health insurance coverage, and that every employer provide it. It's not always that black and white, though, and the law also outlines subsidies and exemptions to these rules. It also requires each state to set up an insurance exchange for individuals and small businesses to select their coverage. But what do such reforms mean for you? And can the government even do that?
The Law is Unconstitutional
Bill number HR 3962 became law when it passed the House of Representatives and the Senate. Since President Obama signed it on March 23, 2010, the Patient Protection and Affordable Care Act has been the subject of multiple lawsuits challenging its constitutionality. Republicans in the House of Representatives have tried more than 40 times to repeal the Affordable Care Act since it went into effect (each effort has failed in the Senate) [source: Graves]. According to the law, every American is required to buy health insurance, and every state is required to set up a health insurance exchange for them to do so. The U.S. Supreme Court upheld the law's constitutionality in 2012, but that didn't end the debate. In 2013, for example, a D.C. Circuit Court judge (among other federal courts) concluded the act's requirement for employers who provide group insurance to provide birth control at no additional charge impedes on the religious freedoms of private-sector employers who oppose contraception, under the Religious Freedom Restoration Act. That opens the door to another Supreme Court review.
All Americans Will Have Health Insurance
Yes, it is true that under the health-care reform laws all Americans have access to health insurance. And yes, it's true that more Americans will have coverage because of the legislation. But notice we said "more" in the latter statement, not "all." Why? Because it's also true that not all Americans will be insured.
Most Americans -- as many as 3 in 4 -- will continue to be part of group insurance plans offered through their employers, or they'll be part of public health care programs (Medicare and Medicaid) [source: Sebelius]. The remaining 20 to 25 percent can use the state and federal health insurance exchanges (that includes Healthcare.gov) to sign up for coverage.
Health-care reform is expected to expand insurance coverage to about 25 million previously uninsured Americans by 2020. But 25 million doesn't account for all remaining Americans [source: Klein]. It may be that they won't find an affordable coverage option, despite subsidies -- and those who can't find a plan that costs less than 8 percent of their income are exempt from having to buy insurance. Some may not be eligible for Medicaid. Still, some may just choose to opt out of buying insurance -- that's right, you can choose not to buy coverage, but you'll be charged a tax penalty each year you're not covered.
If You Like Your Plan, You Can Keep Your Plan
That statement got the president into a bit of hot water when it turned out not to be entirely true. While nothing in the Affordable Care Act mandates that you choose a new health plan, some insurance companies opted to cancel plans that did not include coverage for services that are now mandatory under the law. So anyone whose plan was cancelled by their insurance company does have to switch.
There are no guarantees the health insurance company holding your policy won't discontinue or make changes to the plan you wanted to keep, and there's also no guarantee that your employer won't change or discontinue what benefits they offer or increase your contribution to the costs. But these were issues before health-care reform laws took effect in 2010, not necessarily because of new law's standards.
For the 5 percent of Americans who were insured through the individual market, this statement is a myth [source: Cohen]. The roughly 1 million Americans who in 2013 received letters from their private health insurance companies detailing the changes to or cancellation of their insurance policies, though, found out that the statement from the White House is not true. A small percentage of these plans will be modified to meet the minimum requirements of the Affordable Care Act, which may or may not come with a cost of coverage increase -- or the plan itself will be discontinued entirely [source: Cohen, Robertson].
In an effort to smooth the problem over, the president announced on Nov. 14, 2013 that plans that were cancelled could be extended for one year. That doesn't guarantee that companies will choose to extend those policies, though. As of this article's publication, the effectiveness of this new plan has yet to be determined.
Medicare Benefits Will Be Slashed
Medicare's budget will be cut under the Affordable Care Act, by as much as $716 billion. That cut will primarily come from Medicare reimbursements to doctors and hospitals, but more than $100 billion will be cut from the Medicare Advantage program by 2017. It's expected this will result in the loss of some Medicare Advantage benefits, but four years into the budget cuts, the program's benefits have remained stable. In fact, between 2010 when the new law took effect and 2013, the program's enrollment rose 30 percent [source: Pickert].
It's important to note, though, that Medicare Advantage differs dramatically from traditional Medicare. Medicare Advantage is more akin to private insurance because it's administered by a private company, yet subsidized by the government. That subsidy costs the government an additional 14 percent per person in Medicare Advantage compared to a person with traditional Medicare. With that subsidy, insurance companies may provide extra perks to beneficiaries like a gym membership or slightly cheaper prescription drugs, but it doesn't provide any "essential benefits" that affect the overall health of the individual. When the cuts to Medicare Advantage occur, some of those perks may disappear, but such cuts won't affect those with traditional Medicare, which is about 75 percent of Medicare beneficiaries [source: Kaiser Health Service]. The beneficiaries of Medicare Advantage will receive the exact same care as those in traditional Medicare without costing the government 14 percent more.
Taxpayers Will Fund Abortions
The right to an abortion is one of the most divisive issues in the U.S., so naturally, the role of pregnancy termination in our country's health care system is contentious as well.
Abortion coverage is elective under the Affordable Care Act; some states and health insurers may choose to cover abortions of all types, while others may choose to cover only those in cases that fall under the Hyde Amendment. (Those are the abortions performed in cases of rape, incest and in instances when a woman's life is in danger -- and most, but not all, offer this.) Some states may choose not to offer plans that cover abortions, elective or otherwise. No public funds -- that's your taxes -- though, are used to pay for elective abortions performed under private insurance plans. Funds are made available for those permitted under the Hyde Amendment, though.
A federal court has confirmed that taxpayers funding abortions is a myth, ruling in 2011, "The express language of the Patient Protection and Affordable Care Act does not provide for tax-payer funded abortion. That is a fact, and it is clear on its face" [source: Baker].
The Plans Hurt Small Businesses
The Patient Protection and Affordable Care Act includes a mandate that all employers must provide health insurance for their employees. If businesses don't provide health insurance, they must pay a penalty for every uninsured employee, funds that will go to provide subsidies to individuals.
Coverage rules differ depending on the size of the business. For example, small businesses with fewer than 50 employees are exempt from this requirement. If a small business does want to provide health insurance, though, it will receive tax credits for its efforts, and may shop in the insurance marketplace. Within that marketplace, a small business owner should be able to find plans at rates more affordable than the ones available before health-care reform, as small businesses with few employees have historically represented a high-risk group for insurers.
We Face Higher Taxes to Pay for Reform
The health care overhaul is estimated to cost $938 billion over 10 years [source: Congressional Budget Office]. That's a lot of money. For comparison, the International Space Station cost $150 billion to build. When the New Deal was rolled out, it cost $50 billion in taxpayer's money between 1933 and 1940 -- and that doesn't even count funding the State Department or the Postal Service [sources: Minkel, Powell]. So how will we pay for health care reform?
The majority of the tax burden falls on individuals who make more than $200,000 per year and married couples who make more than $250,000 per year in combined income. These high-earners pay an increased Medicare payroll tax on wages and investment income, and these taxes are expected to account for about 50 percent of new revenue raised during the first 10 years of health-care reform [source: Pear].
Health Care Will Be Rationed
Rationed health care, in which you may not be eligible for a service that you want or need, is a scary prospect, and it's often treated as an inevitable consequence of reform. As it turns out, the U.S. already had rationed health care before any health-care reforms laws took effect; insurance companies do the rationing.
Consumer protections in the new legislation prohibit insurance companies from denying coverage based on a pre-existing condition (as well as mental health or substance abuse), revoking coverage when someone gets really sick or capping annual expenditures, thus forcing families to choose whether to pay their medical bills or their mortgage.
In addition to tighter controls on health insurance companies, the law established a nonprofit research institute, the Patient-Centered Outcomes Research Institute, and tasked it with determining the comparative effectiveness of medical procedures and treatments. The institute is comprised of doctors, hospital officials, drug and medical device manufacturers and various health experts, and it evaluates whether certain treatments are worth the cost in comparison to other alternatives. The institute's research comes into consideration when deciding what treatments should be covered, but it can't be the only criteria for denying service. To what extent the institute's research and recommendations will be used remains to be seen.
The Plans Represent a Government Takeover of Health Insurance
Critics of health care reform often suggest that the health care reform overhaul is the first step to a government takeover of health insurance and socialized medicine. Say good-bye to America, these critics say; soon, it will be a socialist country.
To answer his critics, President Obama is fond of pointing out that the government has previously handled a fair amount of health insurance in the form of programs like Medicare, Medicaid and the Children's Health Insurance Program (CHIP). Under the new legislation, the federal government's role is larger than these programs; insurance marketplaces are government-run, as are oversight boards that evaluate the effectiveness of certain treatments. The government also has a role in defining the "essential benefits" that all insurance plans must offer.
There is no Medicare-for-all plan, though -- no single public insurer, which is the best way to understand a single-payer system. The government won't be paying for everyone's health insurance, nor will the government hire our doctors and run our hospitals -- that's socialized medicine, and such is the way things operate in Britain. There is also no public option under the Affordable Care Act; all of the new insurance customers who sign up for plans through the marketplace will be served by private insurance companies.
The United States Can't Afford Health Care Reform Right Now
It may seem like the wrong time to pursue health care reform; after all, the U.S. is more than $17 trillion in debt [source: U.S. Debt Clock]. The Obama administration maintains, though, that the cost of doing nothing is much higher than the cost of reform.
The U.S. spends more than $2 trillion on health care each year, which is about one-sixth of the economy [sources: Abelson, Leonhardt]. About $700 billion of that $2 trillion is spent on needless treatments that don't actually make the country's citizens any healthier [source: Tumulty]. In fact, the U.S. spends almost $3,000 more per person each year than any other industrialized country, yet it has higher infant mortality rates and lower life expectancies [source: Kane]. These costs are projected to grow more and more steeply each year, particularly in comparison to an average paycheck's growth. Health-care reform is designed to keep this growth in check, and though the initial 10-year cost of implementing the new legislation is $938 billion, reform will also reduce the deficit, reducing our country's health care costs by more than $200 billion over the first decade, and more than $1 trillion during its second decade [source: White House].
Executive orders are directives from the president without input from the legislative or judiciary branches of government. HowStuffWorks explains.
Author's Note: 10 Myths About U.S. Health Care Reform
I didn't expect most Americans to know the ins and outs of the Affordable Care Act. It's 2,000 pages of health reform law, after all, so maybe most of us just know the parts that apply to our own situation and our families. So I was surprised when a CNBC poll showed so many individuals didn't know the Affordable Care Act and Obamacare are actually the same thing -- 46 percent opposed Obamacare while only 37 percent opposed the Affordable Care Act -- and that's three years after the law took effect. - MT
More Great Links
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