The Truth About Obamacare

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

The Truth About Obamacare
••• Photo: Giorgio Majno/Getty Images

A lot of the following 13 Obamacare myths came up during the debate over President Trump's health policies throughout his time in office. 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 Care Costs Are Rising Thanks to Obamacare

Truth: Health care costs have been rising, but at a slower pace since the ACA was launched. Since 2010, total health care spending increases year-over-year has remained in roughly the same area as in 2009.

Myth 2: Obamacare Forces You to Pay Higher Premiums for Services You Don't Need

Truth: Many people were upset that they had to pay for pregnancy, childbirth, and maternity care. In any health insurance plan, someone is paying for services they know they'll never need. A marathoner is not likely to 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% 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

Truth: Not really. In Canada, the government pays most medical bills. In the United Kingdom, doctors are employees of the federal government. 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 many Americans think the ACA is socialized medicine? President Barack Obama’s initial proposal included universal health care. Congress rejected this proposal, preferring one based on America's health insurance model. 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"

Truth: First, Obama meant that the ACA itself did not cancel anyone’s plans. Plans were “grandfathered in” if they existed before the ACA was passed and minimum requirements were met.

Millions of people lost their plans because their insurance companies dropped them. Many of these plans didn't offer basic services. For example, 75% didn't completely cover maternity care. 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. 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

Truth: Many people were worried that Obamacare would allow government bureaucrats to decide their treatment, not their doctor. Their relationship with their doctor didn't change. 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 Medicaid, the government is involved in this decision by acting as an insurance company. The ACA didn’t change any of this. 

Myth 6: Obamacare Cuts Benefits for Those on Medicare

Truth: Benefits weren't cut, although 44% of people believe they were. That’s because the ACA cut funding for Medicare by $716 billion over 10 years. But the cuts affected 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 paid “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 1% above the rate of economic growth. Plans had risen 5.9% a year over the last five years, costing enrollees 17% 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% funding for the Part D “doughnut hole” prescription drug costs.

Myth 7: All Your Medical Information Will Be Combined Into a Giant Database Which the Government Will Use 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: Obamacare Will Give Immigrants Who Are in the Country Illegally Free Health Insurance

Truth: 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 Maternity Benefits Encourage immigrants to Enter Illegally Just to Have "Anchor Babies"

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 and studies suggest that less than 10% of small businesses with fewer than 50 employees claimed they would have to reduce their workforce because of Obamacare.

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% approved of Obamacare. 

Myth 12: Most Americans Think that Obamacare Should Be Repealed

Truth: More than half (54% ) of Americans were opposed to Obamacare in 2013. But only 35% think it should be abolished. Sixteen percent believe it’s too conservative. Twelve percent think it's already been repealed, and 7% 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% 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.