The Truth About Obamacare

14 Obamacare Myths: What's the Truth Behind Them?

The Truth About Obamacare
Did Obama lie? Here's common myths and facts. Photo: Giorgio Majno/Getty Images

A lot of the following 14 Obamacare myths came up again during the debate over the Republican's health care bill. It's surprising that a lot of these myths still persist, since the facts say otherwise. Make sure you know the truth about the Affordable Care Act so you aren't misled.

Myth 1: Health insurance costs are rising thanks to Obamacare.

Truth: Health insurance premiums have been rising, but not because of the ACA.

Premiums for company-sponsored family plans, for example, increased 4.8 percent annually between 2005 – 2010. Since the ACA was enacted, they've gone up at a slower rate of 3.8 percent a year.

Premiums for privately-bought plans rose 15 - 20 percent a year between 2005 - 2010. In 2013, the health insurance exchanges opened, and 39 percent experienced an increase. But 46 percent of enrollees saw lower premiums. (Source: “Obama Mixing and Matching Insurance Stats,” FactCheckorg, March 18, 2014. “Survey of Non-Group Health Insurance Enrollees,” Kaiser Family Foundation, June 19, 2014.)

Many people across the board experienced higher rates because their plans now had to add the 10 essential health benefits. But health insurance costs were rising even without Obamacare. 

Myth 2: Under Obamacare, I’m being forced to pay higher premiums for services I don’t need, such as pregnancy, childbirth, and maternity care.

Truth: In any health insurance plan, someone is paying for services they know they'll never need. A marathoner will never need diabetes care, women will never need prostate testing, etc. Obamacare requires childbirth coverage to lower overall healthcare costs.  That's because Medicaid pays for 50 percent of all childbirths.

It costs the taxpayer less to make sure those women receive prenatal care. That is cheaper than the emergency room treatment that results from botched home deliveries.

Myth 3: Obamacare is socialized medicine, like in Canada or the UK.

Truth: Not really. In the UK, doctors are employees of the federal government. In Canada, the government pays most medical bills, which is similar to Medicare and Medicaid. The ACA does expand Medicaid to middle-income families, but most of the expansion is in the private insurance market.

Why do more than half (57 percent) of Americans think it is socialized medicine? President Obama’s initial proposal included government-funded health coverage for Congress. Congress rejected his proposal. Ironically, Obamacare now forces Congress onto the private exchange, just like everyone else. So, in that particular case, the ACA is reducing socialized medicine. (Source: “Americans Still Have Big Misperceptions About Obamacare,” ThinkProgress, March 21, 2013.)

Myth 4: If you like your plan, you can keep your plan, period.  President Obama promised this. He meant that the ACA itself did not cancel anyone’s plans. It also allowed plans to be “grandfathered in” if they existed before the ACA was passed, as long as certain minimal requirements were met.

Truth: One million people lost their plans because their insurance companies dropped them. Some companies that didn’t comply with the ACA’s requirements chose to drop plans rather than change them. Even some “grandfathered in” policies were dropped. In 2014, Kaiser Permanente canceled grandfathered in policies for 3,414 customers in Maryland and Virginia. Humana did the same for 6,544 plans in Kentucky. They decided it didn't make business sense to maintain a broad variety of plans at different costs. (Source: “Some Insurers Cancel Plans,” Wall Street Journal, October 3, 2014.)

Many employees lost their plans because their companies decided to pay the penalty, knowing their workers could find cheaper plans on the exchanges.  (Source: “Debunking Four Obamacare Myths: Both Sides Get It Wrong,” CNN.com, November 5, 2013.)

Myth 5: Obamacare intrudes into the doctor-patient relationship by allowing government bureaucrats to decide your treatment, not your doctor.

Truth: Your relationship with your doctor hasn't changed. Bureaucrats have always been involved. Your doctor decides on the treatment. Then, an insurance company staff person decides whether it will be covered, how much will be covered and how much the doctor will be paid for it. For Medicare and Medicare, the government is involved in this decision by acting as the insurance company. The ACA didn’t change any of this. 

Myth 6: 

Obamacare cuts benefits for those on Medicare.

Truth: Benefits aren't cut, although 44 percent of people believe they are. That’s because the ACA cuts funding for Medicare by $716 billion over ten years. The cuts affect providers in these three areas:

  1. Hospitals receive $260 billion less because the ACA changes the way they are paid. Before, they were payed “fee-for-service” for every test and procedure. Now they're switching to value-based care. This pays based on successful outcomes. You should receive better care at a lower cost.  
  2. Medicare Advantage insurance providers receive $156 billion less. This is because the ACA restricts cost increases to one percent above the rate of economic growth. Plans had risen 5.9 percent a year over the last five years, costing enrollees 17 percent more than regular plans. (Source: “Romney’s Right: Obamacare Cuts Medicare by $716 Billion. Here’s How,” Washington Post, August 14, 2012.) 
  3. Home health care, skilled nursing services and hospice receive the rest of the cuts.

The ACA increased Medicare benefits. Medicare now includes free preventive care, like physicals and mammograms. It will eventually receive 100 percent funding for the Part D “doughnut hole” prescription drug costs.

Myth 7: All your personal and medical information will be combined into a giant database so the government can keep better track of you.

Truth: The health insurance exchanges ask for a lot of personal data. You need to enter things like your Social Security number, your income and whether you smoke. The IRS uses this data to check against its records to make sure you qualify for the subsidy. The smoking question is because insurance companies can charge more for smokers. The government has most of this info already.

The ACA requires the healthcare providers to computerize their records, which could one day be connected to the info on the exchanges. Could a despot use this database to control your life? Probably, but there is already so much data about you that your privacy is already compromised.

Myth 8: My tax dollars go toward providing immigrants who are in the country illegally with free health insurance.

Truth: Almost half (47 percent) agree with this statement. In fact, undocumented immigrants are prohibited from getting Obamacare. They can get preventive care at community health centers. That is supposed to lower healthcare costs. As before the ACA, emergency rooms must treat everyone. When more people in the country illegally use community health centers, there are fewer expensive emergency room bills.

Myth 9: 

By offering free childbirth coverage, Obamacare creates incentives for those in the country illegally to come to the United States so their children will be American citizens. These so-called anchor babies then make it easier for the parents to become citizens themselves.

Truth:  Hospitals must treat anyone who shows up in the emergency room. Medicaid refunds around $2 billion a year to hospitals that treat at least 100,000 people here without legal permission. $1 billion goes to California alone. But, this existed before the ACA. Does it create an incentive for people without documentation to give birth in the United States? Maybe, but it's more likely that the primary motivation is jobs. That's clear because there were fewer people here illegally during the recession when jobs were scarce. (Source: “Medicaid Helps Hospitals Pay for Illegal Immigrants’ Care,” Kaiser Health News, February 12, 2013.)

Myth 10: Businesses aren’t hiring because of Obamacare.

Truth: Probably not, because the requirement to provide insurance affects only a few companies. Businesses with fewer than 50 employees are exempt. Those are the companies that create 65 percent of all new jobs.

More than 95 percent of companies with more than 50 employees already offered insurance. Of those that didn't, only 10 percent said they are reducing their workforce, cutting their hours or hiring more part-time, temporary or contract workers to avoid the requirement. (Source: “Top 16 Myths About the Health Care Law,” PolitiFact.com, September 24, 2013.)

Myth 11: The Affordable Care Act is much better than Obamacare.

Truth: They are two names for the same thing. Many people think they are different. Forty-five percent of Americans polled in a 2012 Gallup poll approved of the ACA, while only 38 percent approved of Obamacare. (Source: "Obamacare vs. Affordable Care Act: Does the Name Matter?" USA Today, November 29, 2013.)

Myth 12: Most Americans think that Obamacare should be repealed.

Truth: More than half (54 percent) of Americans are opposed to Obamacare. But only 35 percent think it should be abolished. Sixteen percent believe it’s too conservative. Twelve percent think it's already been repealed, and 7 percent think the Supreme Court ruled against it.  (Source: “Poll Shows 54 Percent Against Obamacare,” Politico, May 2013.)

Myth 13: Obamacare establishes “death panels” that allow the government to make decisions about end-of-life care for people on Medicare. 

Truth: The ACA initially proposed that Medicare provides 100 percent free coverage for doctor appointments with recipients who wanted to discuss do-not-resuscitate orders, end-of-life directives and living wills. Thanks to the controversy, the provision was dropped. Forty percent of people believe it exists. 

Myth 14: The ACA creates “Taxmageddon,” a massive tax increase of $800 billion over the next ten years.

Truth: Obamacare tax increases will take in $76.8 billion a year when they are all up and running. That's the highest amount in history. It does slow economic growth at a dangerous time in the business cycle. The next largest increase was the 1993 deficit reduction bill. It raised $65.9 billion a year. The 1982 tax hike is third. But this doesn’t take into account inflation, population growth, income growth and economic growth. For more, see Obamacare Taxes

If you take inflation into account, then the 1982 tax increase was the largest, bringing in $85.3 billion. If you compare the tax increase as a percent of the total economy, then the 1942 tax increase to fund World War II was the largest. It was 5.04 percent of total economic output. That’s over ten times larger than the 0.43 percent for the ACA. (Source: “Biggest Tax Increase in History?” FactCheck.org, July 10, 2012.)   

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