It seems that almost everyone has a list of misconceptions about Obamacare. It is not surprising since Republicans in Congress are so confused about it that they are willing to shut down the Government by October 1st in order to delay or eliminate Obamcare or the Affordable Care Act (ACA).
It was not useful for President Obama to promote the term “Obamacare” since it has taken up pejorative connotations and ties the act to him personally. While he was the champion of this legislation, many others contributed to it and such a general law should be not be personalized.
The one big misconception is that if the Government is shut down Obamacare will disappear. In fact, as President Obama said in a speech today, the ACA health care exchanges will start operating on October 1st whether the 2014 budget is passed or not and the provisions of the law are continuing to go into effect. Some provisions of ACA have already been implemented such as children up to age 26 being included in their parents’ health insurance program.
Perhaps, the simplest misconception is that ACA is a government take-over of health care. In fact, there will be no government-provided insurance. The act only mandates that everyone should have health insurance, but except for seniors who are on Medicare and veterans, all insurance will be provide by private insurance companies.
Another big misconception is that ACA will destroy Medicare. In fact, while ACA takes away some funds from the Medicare Advantage program which operates like an HMO, its effect on standard Medicare can only be considered as positive. A full discussion of the effects of ACA on Medicare can be found here.
The principal effects are that ACA dictates better preventive care and wellness visits for seniors without additional costs, closes the “donut hole” which may bankrupt some seniors who use very expensive medicines and in general does not increase costs except for the most wealthy seniors. While it takes some funds away from the Medicare Advantage program, it also requires these programs to spend no more than 15% of their expenses on administration, resulting in a more efficient operation.
The requirement that everyone must have medical insurance is another point of confusion. Those who do not obtain insurance may be liable to penalties. But, initially these penalties will be small and those who cannot afford insurance will be exempt from penalties.
Another source of confusion is that the premiums for Obamacare will be extremely high. In fact, in general the premiums will be lower for many people and those in lower income brackets will get substantial subsidies.
Costs will vary by state. Current estimates range from $144 in Minnesota to $425 in Wyoming. The additional good news is that rates for women and older people or those with pre-existing conditions cannot be higher than those for younger and healthier males.
To sign up for healthcare under Obamacare or ACA, go to Healthcare.gov. To estimate potential subsidies, Kaiser has provided a free calculator here.