Health care reform (Part 1): What really is the Affordable Care Act (aka ObamaCare)?

Despite being signed into law over three years ago, the Patient Protection and Affordable Care Act combined with the Health Care and Education Reconciliation Act, more disaffectionately known as Obamacare, have not ceased to be part of a national debate – and a sticking point for Republicans. Republicans have vowed to repeal the Affordable Care Act since it was passed, and they took the administration’s delay of the employer penalties until 2015 as a sign of defeat. It has been particularly salient in the news recently as Republicans have threatened to continue the government shutdown in order to remove funding for the Affordable Care Act from the budget for the upcoming fiscal year.

So what is this debate really about, and why is there so much antipathy towards the Affordable Care Act (and why do people seem to like the Affordable Care Act more than Obamacare, even though they are the same thing)? I hope to spend a little bit of time looking at the law, projected costs and savings, and public opinion over the next few blog posts. (Throughout these posts, I will refer to Obamacare by the abbreviated title of one of the two main pieces of legislation – the Affordable Care Act)

First of all, it is clear that there is widespread uncertainty of exactly what is included in the 906-page law and the rationale behind it. The nickname “Obamacare” alone has biased many consumers against the program even though they are likely benefiting from it.

 

To me, it seems that opinion on the Affordable Care Act is in part fueled by a vast misunderstanding of both the intent and the expected consequences of it, and in part by misleading portrayal of the law in the media. The law is actually not as complicated as it may seem, if one boils it down to a few basic principles. President Obama wanted to accomplish two primary goals in health care reform, which are included in this law:

1)      Making insurance coverage fairer and more affordable

• Insurance companies cannot deny coverage or charge higher premiums based on pre-existing conditions.
• Young people can stay on their parents’ plans until they are 26.
• Tax subsidies, restrictions on premium increases, closing the “donut hole,” prohibiting lifetime and annual spending caps, and many other provisions

2)      Everybody in the United States must have some form of health insurance, whether on the private market, through an employer, or through a public exchange.

The second point, expectedly, has been the most contentious. But I would be astounded if anybody said to me that they oppose either of those first two bullets in (1). In my many conversations with people over health care, some claim they staunchly oppose the Affordable Care Act and yet are still taking advantage of the provision which allows their children to stay on their parents’ health insurance until they are 26. Hell, I’m one of the people taking advantage of it, and gratefully so. But let’s put down our partisan blinders and really ask whether the Affordable Care Act is really so bad.

What I hope to accomplish in this series of posts is to explain why the law is more reasonable than people think. The Affordable Care Act is actually one giant compromise. The first group of provisions here (1) impose a significant burden on insurance companies in order to improve health care coverage, and the second provision (the individual mandate) is meant to offset the cost to insurance companies of allowing young people to stay on family plans and guaranteeing fair coverage even if one has a pre-existing condition.

In my next few posts, I will go more into detail on specific provisions in the law and the individual mandate, but for now it suffices to say that since the passage of the Affordable Care Act, many people with pre-existing conditions are now guaranteed affordable health insurance, and many young people can forgo insurance premiums by staying on their parents’ plans.

This is only the tip of the iceberg on a discussion on the Affordable Care Act, so stay tuned for my next post. (I also welcome any corrections!)

– Anthony

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