Benefits of Obamacare: Advantages of the ACA

What You Will and Won't Lose If Obamacare Is Replaced

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Man with spinal cord injury in wheelchair at family picnic. Photo: Huntstock/Getty Images

Obamacare has a lot of benefits that most people don't know about.That's because Americans have been hit with fifteen times more negative than positive messages about the Patient Protection and Affordable Care Act. As a result, most people don't know the truth about Obamacare

The main purpose of the ACA is to lower health care costs over time. Congress realizes that the cost of Medicare, Medicaid, and employee health benefits is eating up the federal budget.

That's why they agreed that reforming health care was a priority.  President Donald Trump's plan to repeal and replace Obamacare contains different strategies to reduce the costs. 

The ACA lowers costs in three ways.

  1. It makes health insurance affordable by providing subsidies. Trumpcare changes this.
  2. It emphasizes preventive care. Trumpcare changes some of this.
  3. It improve how health care itself is delivered. Trumpcare doesn't change this.

Obamacare's three strategies mean more people can get treatment before they need expensive emergency room care.

Why is this so crucial? A day in the hospital costs between $2,000 to $20,000. Most people assume their insurance pays most of this. Some may be unprepared to pay a high deductible. But before the ACA, they could also get hit with another bill. Many found out their plans had a low maximum. They were responsible for any costs above that. That's one reason why health care became the No. 1 cause of bankruptcy.

Once a patient declared bankruptcy, the hospital had to declare a loss on any unpaid treatment. To make up the profit, they passed this cost onto everyone else. 

Obamacare reduced the number of bankruptcy filings. In 2010, 1.5 million people filed. That dropped to 770,846 by 2016. The ACA forced insurance companies to cover all costs by eliminating annual and lifetime limits.

That

Obamacare's strategy is working to slow the increase of health care costs. Between 1990 and 2008, health spending rose 7.2 percent a year. After the exchanges opened in 2014, spending on health care rose more slowly. It grew 5.3 percent in 2014 and 5.8 percent in 2015. 

That's one reason why the ACA could reduce the deficit by $143 billion over its first 10 years. In addition to reducing healthcare costs. It also shifted cost burdens to health care providers and pharmacy companies. Last but not least, it raised taxes on those earning at least $200,000 a year. Those taxes will be repealed under Trumpcare. That's why an Obamacare repeal will increase the debt.

Make Insurance Affordable

The ACA provides tax credits for insurance to the middle class (below 400 percent of the poverty level). It limits out-of-pocket costs to $7,150 for an individual plan and $14,300 for a family plan in 2017. It expands Medicaid to 138 percent of the federal poverty level and provides this coverage to adults without children for the first time. Trumpcare eliminates the expansion by 2020.

In 2014,states were required to set up insurance exchanges or use the federal government's exchange to make it easier to shop for insurance plans.

You can use them to compare prices and purchase health insurance online.You can also compare doctors, hospitals and other providers in your area. They also provide local face-to-face or telephone help in applying for insurance. Make sure you know how to get Obamacare. Each year,  the enrollment period starts on November 1

In 2010, parents were allowed to add their children up to age 26 on their plans. That lowers costs for everyone else by adding the premiums from these relatively healthy people to insurance company revenues. Trumpcare kept this popular feature.

The ACA eliminates the Medicare Part D “doughnut hole” by 2020. This benefit was phased in over time. It gave seniors a 55 percent discount on prescription drugs (42 percent for generic) in 2016. That amount increases until they only pay 25 percent in 2010.

Businesses with more than 50 employees must offer health insurance. Small businesses get a tax credit worth up to 35 percent of their contribution to employees’ health insurance. Non-profits receive a 25 percent credit. Employees receive a uniform summary of benefits, and a 60-day advance notice if anything changes in their coverage. 

Small market plans must cover essential health benefits with limited deductibles (initially $2,000 per individual, $4,000 family). But for each person, Obamacare will cost something different.

Emphasize Prevention

The ACA further cut costs by requiring all insurance plans to cover 10 essential health benefits. Much of it is preventive care that must be provided at no cost. These include well-woman visits, domestic violence screening and chronic disease management. It also covers lab tests to diagnose diseases, including mammograms and colonoscopies. In addition, maternity and newborn care, and dental and vision care for children is free. Mothers receive time from work and a private room to nurse their babies/express milk. Preventive care cuts costs by identifying and treating diseases before they become emergencies.

This includes treatment for mental health, addiction and chronic diseases. These patients can be the most expensive to treat, which is why insurance companies try to avoid coverage. If left untreated, many ended up homeless or in prison, which costs the government much more. Because it's so expensive, this treatment will probably be cut under Trumpcare.

The ACA covers services and devices to help people with injuries, disabilities or chronic conditions. It covers more drug benefits. Of course, traditional insurance coverage, such as emergency room, hospitalization and outpatient care, is also included.

Trumpcare allows states to choose which benefits to cover. Corporate health insurance plans are allowed to pick any state's coverage plan. Most corporate plans will probably default to the state with the least coverage. That means Trumpcare will reduce coverage for everyone, not just those on Obamacare plans.

Another way the ACA provides a safety net is by eliminating lifetime and annual limits. That helps those with chronic conditions get enough insurance to cover treatment. This safety net is critical for hemophiliacs and children with heart problems or cancer.  This would probably be repealed.

Obamacare prevents insurance companies from denying you a policy because you have, or get, a health condition. That's known as a pre-existing condition, and it kept millions from getting coverage. Companies can't drop your coverage because you made a mistake on your application, or because you’ve entered a clinical trial for cancer or another life-threatening disease. Plans can’t make you wait more than ninety days before coverage starts. You can appeal claim rejections or other health insurance decisions through your state regulator. Trumpcare retained this portion of the ACA.

The ACA requires that insurance companies spend 85 percent of all premium dollars for large employer plans on health care services and quality improvement. That drops to 80 percent for plans sold to individuals and small employers. If insurers do not meet these goals, because their administrative costs or profits are too high, they must send rebates back to consumers. You might have already received it, and not known it was because of Obamacare. This part of the law probably won't be repealed.

The ACA charges the National Prevention Council to coordinate all federal health efforts to promote an active, drug-free lifestyle. It adds $15 billion to the Prevention and Public Health Fund to invest in proven public health programs, from smoking cessation to combating obesity. This part of the law won't be changed, but the funding will probably be cut.

Improve How Health Care Itself Is Delivered

The ACA authorized Medicare to change how it pays doctors and hospitals. It used to pay for every test and procedure you get. It will transition to a system that bases payments on how well you get. That forces hospitals, doctors and pharmacists to work together in a comprehensive approach. So far, these so-called Accountable Care Organizations have shown significant results. The ACA encourages more of them. Since this is under Medicare, it won't be repealed by Trumpcare. 

You probably assumed your primary care physician already coordinated the care you receive from hospital visits, specialists and tests. But the former system didn't paid more for doing that. Doctors today must focus on activities that generate income. That means even the best practices can't afford to coordinate care.

The ACA works with prior legislation to make sure all medical records are put on computers so they can be transferred electronically. You probably thought that also happened, but medical records have been traditionally kept on paper records. That meant test results had to be mailed or faxed. The ACA is working toward a system that keeps one electronic record. That will allow all your doctors to share their diagnoses and treatments as well as your clerical and payment information. Once implemented, electronic records will further lower health care costs.

That's the big change. Here's a list of other benefits.

  • The ACA requires states to make sure the Medicaid payments doctors receive are no lower than payment rates for Medicare. It funds scholarships and loans to double the number of health care providers in five years. It adds funding to attract doctors to the 68 percent of medically underserved communities in rural areas.
  • Obamacare establishes a new Center for Medicare & Medicaid Innovation to create a national strategy to improve health care and lower costs. It creates the Independent Payment Advisory Board to advise Congress on how to extend the life of the Medicare Trust Fund. The Board will target waste in the system. It will recommend ways to reduce costs, improve health outcomes and expand access to high-quality care. 
  • The ACA also targets fraudulent doctor/supplier relationships. It provides $250 million to states to crack down on excessive insurance rate hikes. It also requires background checks of all nursing home staff, to prevent abuse of seniors. Obamacare creates the Community First Choice Option. It encourages states to offer home and community-based services to physically challenged individuals through Medicaid. That lowers costs by keeping them out of nursing homes.

There are also 10 disadvantages of Obamacare

More on Obamacare

Pros and Cons | How Does It Work? | How Universal Health Care Failed | What's in the ACA Bill

To make sure you are getting all your Obamacare benefits, see my book The Ultimate Obamacare Handbook (2015 - 2016).