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. For more, see The Truth About Obamacare

The main purpose of the ACA is to lower healthcare costs in the long run. Congress realizes that the cost of Medicare, Medicaid and employee health benefits is eating up the entire budget.

Trumpcare also has strategies to reduce the costs. For more, see Why Reform Health Care.

The ACA lowers costs by:

  1. Making health insurance affordable. This will be eliminated under current repeal efforts.
  2. Emphasizing prevention. Congress wants to retain this aspect.
  3. Improve how healthcare itself is delivered. These changes will remain. 

By providing insurance for millions, making preventive care free, and changing how hospitals treat patients, more people will be treated before they need expensive emergency room care.

Why is this so crucial? A day in the hospital can cost between  $2,000 to $20,000 a visit. Many people only found out they had a high-deductible plan, or a plan with a low maximum after they got the bill from the hospital. These costs are one reason that health care is the #1 cause of bankruptcy. The hospital had to declare a loss on any unpaid treatment. To make up the profit, they passed this cost onto everyone else.

It seems to be working. Between 1990 and 2008, health spending rose 7.2 percent a year. The recession slowed the growth of health spending to 4 percent annually between 2008 and 2013. Cost are expected to rise 5.6 percent in 2014, but slow to 4.9 percent in 2015, according to the Centers for Medicare and Medicaid Services.

 (Source: Mark Landler and Michael D. Shear, “Enrollments Exceed Obama’s Target for Healthcare Act,” New York Times, April 17, 2014.)

As a result, the ACA was projected to reduce the deficit by $143 billion over its first ten years. In addition to reducing healthcare costs, it also shifts cost burdens to health care providers and pharmacy companies, as well as raising taxes. For more, see How an Obamacare Repeal Will Add to the Debt.

Make Insurance Affordable

The ACA provides tax credits for insurance to the middle class (below 400 percent of the poverty level). Your out-of-pocket costs can’t exceed $6,600 for an individual plan and $13,200 for a family plan in 2015. It expanded Medicaid to 138 percent of the Federal poverty level, providing this coverage to adults without children for the first time. Trumpcare eliminates this expense after 2020.

States were required to set up insurance exchanges or use the Federal government's exchange to make it easier to shop for insurance plans. They allow you to compare prices and purchase health insurance online.You can also compare doctors, hospitals and other providers in your area. You get local face-to-face or telephone help in applying for insurance.

Find out How to Get Obamacare and make sure you know When Does It Start? 

Parents can 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 feature.

Medicare Part D beneficiaries will find the “doughnut hole” has been eliminated by 2020. For more, see Health Care Reform Timeline. .

Businesses with more than 50 employees must offer health insurance. Small businesses get a tax credit worth up to 35 percent of your contribution to your employees’ health insurance.

 Non-profits receive a 25 percent credit.  Employees receive a uniform summary of benefits and coverage to participants, and a 60-day advance notice if anything changes in your coverage. 

Small market plans must cover essential health benefits with limited deductibles (initially $2,000 per individual, $4,000 family) using a form of community rating. For more, see How Much Will Obamacare Cost Me?

Emphasize Prevention

One way the ACA cuts costs is by requiring all insurance plans to cover 10 essential health benefits. These include a lot of preventive care, much of which is 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. This will probably be repealed.

It also covers treatment for mental health, addiction, and chronic diseases. These patients can be the most expensive to treat, which is why insurance companies tried to avoid coverage. If left untreated, many ended up homeless or in prison, which costs the government much more.

It also 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.

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

It also 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 for a wide variety of conditions. They also can't drop your coverage because you’ve 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. Congress wants to keep this portion of the ACA. 

The ACA requires that at least 85 percent of all premium dollars collected by insurance companies for large employer plans are spent on health care services and quality improvement. For plans sold to individuals and small employers, at least 80 percent of the premium must be spent on benefits and quality improvement. If insurance companies 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. 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 Healthcare Itself Is Delivered

The ACA authorized Medicare to start changing how doctors and hospitals are paid. Instead of being paid by for every test and procedure you get, they will get paid based on how well you get. To make this possible,  hospitals, doctors and pharmacists must work together to get you better faster. These Accountable Care Organizations, where in place already, have shown significant results. The ACA encourages more of them. Since this is under Medicare, it probably won't be part of the repeal process. But it could be tweaked under a new plan.

You probably think your primary care physician already coordinates all the care you receives from hospital visits, specialists, and tests, but he or she doesn't get paid more for doing that. In many practices, it just doesn't happen.

One big reason is because medical records have been traditionally kept on paper records. Test results have to be mailed or faxed.

To fix this, the ACA works with prior legislation to make sure all records are put on computers so they can be transferred electronically. The result is one record that allows all your doctors to share their diagnoses and treatments as well as your clerical and payment information. Once implemented, electronic records will save doctors a lot...savings that can be passed onto you.

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. Adds funding to attract doctors to the 68 percent of medically underserved communities in rural areas.
  • Establishes a new Center for Medicare & Medicaid Innovation to create a national strategy to improve healthcare and lower costs. Creates the Independent Payment Advisory Board will begin operations to develop and submit proposals to Congress and the President aimed at extending the life of the Medicare Trust Fund. The Board is expected to focus on ways to target waste in the system, and recommend ways to reduce costs, improve health outcomes for patients, and expand access to high-quality care. 
  • Cuts down on fraudulent doctor/supplier relationships. Provides $250 million to states to crack down on excessive insurance rate hikes. Requires background checks of all nursing home staff, to prevent abuse of seniors. Creates the Community First Choice Option to encourage states to offer home and community-based services to physically challenged individuals through Medicaid. That lowers costs by keeping them out of nursing homes.

For the disadvantages, see What Is Wrong With Obamacare? 

More on Obamacare

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