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 have come up during the debate over Trump'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 and 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 to 20 percent a year between 2005 and 2010. In 2013, the health insurance exchanges opened, and 39 percent experienced an increase. But 46 percent of enrollees saw lower premiums, according to a Kaiser Family Foundation survey

Many people experienced higher rates because their plans now had to add the 10 essential health benefits. But health insurance costs were rising even faster before Obamacare. 

Myth 2: Under Obamacare, you are forced to pay higher premiums for services you 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 health care 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 United Kingdom.

Truth: Not really. In the UK, doctors are employees of the federal government. In Canada, the government pays most medical bills. That's similar to America's 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 the ACA is socialized medicine? President Obama’s initial proposal included government-funded health coverage for Congress. It rejected his proposal. Ironically, Obamacare now forces Congress onto the private exchanges, just like everyone else. So, in that particular case, the ACA reduced socialized medicine. 

Myth 4: President Obama promised that "If you like your plan, you can keep your plan, period."  He meant that the ACA itself did not cancel anyone’s plans. Plans were be “grandfathered in” if they existed before the ACA was passed and minimum 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. 

Many employees lost their plans because their companies decided to pay the penalty. They knew their workers could find cheaper plans on the exchanges. 

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.

The insurance company also determines how much it will cover and how much it will pay the doctor. 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 cut benefits for those on Medicare.

Truth: Benefits weren't cut, although 44 percent of people believe they were. That’s because the ACA cut funding for Medicare by $716 billion over 10 years. But the cuts affect providers, not recipients, in these three areas:

  1. Hospitals received $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 that pays based on successful outcomes. You should receive better care at a lower cost.  
  2. Medicare Advantage insurance providers received $156 billion less. 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. The government decided to stop overpaying. 
  3. Home health care, skilled nursing services and hospice received the rest of the cuts.

The ACA increased Medicare benefits. Medicare now includes free preventive care, like physicals and mammograms. In 2020, beneficiaries will 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. The government will use it to 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 information already.

The ACA requires health care providers to computerize their records. This could one day be connected to the data 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, immigrants in the country illegally are prohibited from getting Obamacare. They can get preventive care at community health centers. That is supposed to lower health care costs. Emergency rooms must continue to treat everyone. When more people in the country illegally use community health centers, there are fewer expensive emergency room bills.

Myth 9: Obamacare's childbirth coverage benefits makes people come to the United States so their children will be American citizens. These "anchor babies" 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. California alone receives $1 billion. 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 in America illegally during the recession when jobs were scarce. 

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

Truth: The requirement to provide insurance affects only a few companies. More than 95 percent of companies with more than 50 employees already offered insurance. Of those that didn't, only 10 percent said they were reducing their workforce or cutting their hours. Some of them admitted to hiring more part-time, temporary or contract workers to avoid the requirement. Businesses with fewer than 50 employees are exempt. Those small companies create 65 percent of all new jobs.

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 survey approved of the ACA, while only 38 percent approved of Obamacare. 

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.  

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

Truth: The ACA proposed that Medicare provide 100 percent free coverage for doctor appointments to discuss end-of-life care. That included beneficiaries 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 created “Taxmageddon,” a massive tax increase of $800 billion over the next 10 years.

Truth: Obamacare tax increases take in $76.8 billion a year. That's the highest amount in history. 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. 

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 10 times more than the 0.43 percent for the ACA. (Sources: (Source: “Americans Still Have Big Misperceptions About Obamacare,” ThinkProgress, March 21, 2013. “Some Insurers Cancel Plans,” Wall Street Journal, October 3, 2014. “Biggest Tax Increase in History?” FactCheck.org, July 10, 2012.)   

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