What Is Wrong With Obamacare
11 Problems With the Affordable Care Act
What is wrong with Obamacare, otherwise known as the Patient Protection and Affordable Care Act? Here are 11 problems with the most comprehensive piece of legislation since the Social Security Act and Medicare. Many of these reasons are why Trump wants to repeal and replace it.
- It's tough to understand how much Obamacare taxes you pay if you don't buy insurance. In 2016, it increased to 2.5 percent of adjusted gross income. Your minimum payment is $695, and your maximum amount is the cost of a Bronze plan. Your minimums could be higher depending on how many family members you have.
- Experts disagree whether the ACA reduced the deficit. The original projection was $143 billion in savings. Others forecast it will add $1.76 trillion to the debt. That would be bad because Congress passed the ACA to reduce the cost of Medicare and Medicaid. Federal payments for these benefits eat up the entire budget. That leaves less for programs in the discretionary budget. It's difficult to understand the true cost of Obamacare to the nation when even the experts disagree so much.
- President Obama promised that, if you like your plan, you can keep it. But health insurance companies canceled plans for 1 million people. That's because they didn't comply with the ACA’s 10 essential health benefits. That was their decision, not Obama's. But many people lost insurance as a result.
- The ACA changes how Medicare reimburses hospitals. It's switching from a fee-for-service to a value-based payment. It will stop paying for every test, exam and procedure. Instead, it will base payments on how well the patient does. This should cut costs in the long run. But it creates a painful transition for hospital systems in the short term.
- It requires doctors' offices to computerize all medical records. The government first introduced this mandate in 2009 as part of the Economic Stimulus Act. It's making life miserable for doctors' offices. As of October 1, 2013, doctors must choose from 140,000 codes when entering data about a diagnosis. It's up from 18,000 codes. Hospital records need to comply with the new Medicare value-based payment system.
- It made health care available to millions more. But that increased health care costs over the short term. Many people received preventive care for the first time in decades. Tests and treatments for cancer, cholesterol, and diabetes raised costs for insurance companies.
- Families lost some tax deductions for uninsured medical costs. The ACA raised the deductible level from 7.5 percent of adjusted gross income to 10 percent. Trump's tax plan restored the deductible level for 2017 and 2018.
- Higher income families paid additional Medicare taxes. It affected 1 million individuals and 4 million couples who made more than $200,000 and $250,000 respectively. It affected both income taxes and capital gains taxes.
- Between 3 million and 5 million people lost their company-sponsored health care plans. Many businesses found it was more cost-effective to pay the penalty than provide health insurance benefits. Many small businesses found out their workers could get a better plan through the exchanges.
- Health care providers and health insurance companies paid additional taxes to help fund Obamacare's benefits. They may pass these costs on to consumers as higher premiums. Indoor tanning services were assessed a 10 percent excise tax. Drug companies will pay an extra $84.8 billion in fees over the next 10 years. That will pay for closing the "doughnut hole" in Medicare Part D. Medical device manufacturers and importers were assessed a 2.3 percent excise tax in 2013. Congress suspended the medical device tax for 2016-2018. Insurance companies will pay a 40 percent excise tax on "Cadillac" health plans in 2022. These plans are for people in high-risk pools, such as older workers or those with dangerous jobs.
- Buying health insurance is still complicated. For example, the exchanges offer four types of insurance policy levels: Bronze, Silver, Gold and Platinum. So now you've got to figure out which level you want. You must also compare the copays, deductibles, and co-insurance levels between the different providers. On the other hand, the exchanges gave consumers more control over the shopping process. Before the ACA, you had to rely on a broker and hope for the best.
For more problems with the Affordable Care Act, see my book, "The Ultimate Obamacare Handbook."