What Is Wrong With Obamacare?

11 Problems with the Affordable Care Act

Whats wrong with obamacare
Obamacare is creating a lot more work for doctors. Photo: Jonathan Kirn/Getty Images

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 wanted to repeal and replace it.

  1. It's extremely complicated. It makes already-confusing health care and insurance even harder for the average American to understand. For example, it offers four types of insurance policy levels: Bronze, Silver, Gold and Platinum. So now you've got to figure out which level you want AND compare the co-pays, deductibles and co-insurance levels between the different providers. For more, see How Does Obamacare Work?
  1. The tax you pay if you don't buy insurance is tough to understand. 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. It's explained in Obamacare Taxes.
  2. Experts disagree whether the ACA reduces the deficit. The original projection was $143 billion 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 are eating up the entire budget. That leaves less for programs in the discretionary budget. See Cost of Obamacare to the Nation to find out why estimates vary so much.
  3. President Obama promised that, if you like your plan, you can keep it, period. But health insurance companies canceled plans for 1 million people because they didn't comply with the ACA’s 10 essential health benefits. For more, see The Truth About Obamacare.
  1. The ACA changes how Medicare reimburses hospitals. It started a switch from a fee-for-service to a value-based payment. Instead of being paid for every test, exam and procedure, hospitals and doctors will be paid based on how well the patient does. Although this should cut costs in the long run, it's creating a painful transition in the short term.
  1. Requirements to computerize all medical records are making life miserable for doctors' offices. The government first introduced this mandate in 2009 as part of the Economic Stimulus Act. After the ACA passed, hospitals began transitioning faster. Their records need to comply with the new Medicare value-based payment system. Since October 1, 2013, doctors must choose from 140,000 codes (up from 18,000) when entering data about a diagnosis. (Source: "Walked Into a Lamppost? Help Is On the Way," The Wall Street Journal, September 13, 2011.)
  2. It increased health care costs over the short term. That's because many people received preventive care for the first time in their lives. Tests for cancer, cholesterol and diabetes raised costs for insurance companies. (Source: "2009 Study on Preventive Health Care," Congressional Budget Office, August 7, 2009.)
  3. Families lose some tax deductions for uninsured medical costs. The ACA raised the deductible level from 7.5 percent of adjusted gross income to 10 percent.
  4. Higher income families pay additional Medicare taxes. That affects 1 million individuals and 4 million couples who make more than $200,000 and $250,000 respectively. It can affect both income taxes and capital gains taxes. Here's more in How Much Does Obamacare Cost Me?
  1. Between three million and five million people lost their company-sponsored health care plans. Many businesses found it was more cost-effective to pay the penalty and let their employees purchase their plans on the exchanges.  Many small businesses found their workers could get a better plan through the state-run exchanges. (Source: "The Effects of the Affordable Care Act on Employment-Based Health Insurance," Congressional Budget Office, March 15, 2012.)
  2. Health care and health insurance companies paid additional taxes to help pay for Obamacare's benefits. This cost could eventually be passed on as higher premiums. Medical device manufacturers and importers were assessed a 2.3 percent excise tax in 2013. Indoor tanning services were assessed a 10 percent excise tax. (Note: Congress suspended the medical device tax for 2016-2018.) Businesses have already passed some of these costs onto customers. Drug companies will pay an extra $84.8 billion in fees over the next 10 years to pay for closing the "doughnut hole" in Medicare Part D. Worst of all, insurance companies will be assessed a 40 percent excise tax on "Cadillac" health plans in 2020. These plans are for people in high-risk pools, such as older workers or those with dangerous jobs. (Source: "Cadillac Tax Explained," Kaiser Health News, March 18, 2010.) 

    More on Obamacare

    For problems with the Affordable Care Act, see my book The Ultimate Obamacare Handbook (2015 - 2016).