This is the second in my three part series on how the Affordable Care Act impacts all of us.
In this Part, I present how Obamacare affects groups of which you might be a part.
In the third Part, I will present the basics of changes required by Obamacare that you can expect in coming years, including taxes, insurance premiums, health insurance coverage, and medical practice. Here’s the second Part:
Part 2: Obamacare’s Effects on Groups Affecting You
• Seniors. Senior citizens are significantly affected by Obamacare, good and bad.
Good. Medicare coverage for prescription drugs and some preventive care programs has been increased.
Age-based health insurance premiums have been capped.
Bad. Medicare payments have been reduced by over $700 billion through 2022 to help pay for Obamacare.
The Medicare Advantage program has been effectively eliminated (see my Part 1).
Obamacare’s Independent Payment Advisory Board is given broad power to cut the Medicare budget and withhold approvals for individual treatments.
Price discrimination on premiums against seniors will continue under Obamacare, but the differential will be capped at no more than three times the rate charged the middle-aged.
• Children. Obamacare does not have much of an effect on the situation for children one way or the other since children are already guaranteed health insurance under Medicaid (if not covered under a parent/family plan).
Good. Private insurance plans can no longer reject coverage to children with pre-existing conditions.
• Ages 18 – 29. People in this age range are affected positively and negatively by Obamacare.
Good. The age of single children eligible for their parents’ health care plan coverage is now 26 (up from 18), as they now must be covered as dependent children, as long as that plan covers dependent children. Bad news accompanies this provision, though (see below).
More people in this age range will end up being covered by health insurance.
Bad. Dependent children up to age 26 will not be covered: 1. If the parent is retired and under 65; 2. If the parent is already on Medicare; or 3. If the dependent child is able to get health insurance through their employer.
People in this age range are least likely to want health insurance. They will pay at least $2,000.00 either through the penalty (see my Part 1) or through the health insurance that they are coerced to buy in avoidance of the penalty.
• Currently Insured. Obamacare has pluses and minuses for the currently insured.
Good. The policy holder will have new benefits (see this Part and Parts 1 and 3).
Bad. Your premiums will increase.
Your employer’s premiums will increase. This may force your employer to discontinue providing health insurance.
If you make non-allowable health care purchases using a Health Savings Account, the penalty will go up to 20%.
If you have a Flexible Spending Account, your employer will be allowed to contribute no more than $2,500.00.
Medicare benefits will be cut and Medicare reimbursement rates will be cut, forcing some plans and providers to stop providing care to Medicare recipients.
So many more people will be on Medicaid that providers will likely be overwhelmed and availability and quality of care will likely be compromised.
• Currently Uninsured. Overall, Obamacare is good for people who now have no insurance and want to be insured.
Good. Low income earners will be able to get health insurance through Medicaid or a subsidized plan through a State or Federal Exchange.
High income earners will be able to get health insurance through an Exchange at a rate lower than what they would be able to get as individuals shopping on the open market for themselves alone.
Bad. Only if you don’t want to have health insurance (see my Part 1).
• Taxpaying Public. Obamacare imposes a number of new taxes over and above the penalties it imposes. These taxes are estimated at over $400 billion in the next ten years.
Capital Gains. An additional 3.8% on capital gains for families earning $250,000 and above. While the gain is offset at least in part by the homeowner’s exemption, the effective rate goes from 15% to 18.5% when you sell your house.
Medicare. Tax rate goes from 1.45% to 2.3% for higher earning families.
Premium Insurance Plans. A tax of 40% will be applied to the premiums of premium health plans, regardless of income level.
• Middle Class. The impact of Obamacare on the middle class will depend on the income level of each family. On average, it is estimated that health insurance premiums will go up by $2,500.00 (Congressional Budget Office).
• Unemployed. Those looking for work are likely hurt by Obamacare. With the costs of Obamacare to them as yet uncertain, employers have reported being reluctant to hire more employees.
• Illegal Aliens. Obamacare has increased the funding of community health centers that illegal aliens use for health services. Illegal aliens will be unable to participate in the health insurance exchanges, Medicare or Medicaid. However, neither will they be subject to the individual mandate (penalty).
• Large companies. Large cost increases have led to waivers granted to selected companies. These waivers are short term and the costs may encourage many companies to drop insurance and pay the $2,000.00 penalty as the cheaper alternative. On the other hand, in order to compete for the best employees, some companies may keep health insurance and adjust pay rates accordingly.
• Small business. Small businesses are defined by Obamacare as 25 or fewer employees (down from the traditional 50). Those companies will benefit in the short term from the tax credit (see my Part 1). Once the credit expires, they will have to depend on the health insurance exchanges to reduce costs. Exchange-based health insurance policies will be transferable from one employer to another.
• Union members. Of the over 1,600 waivers granted by the Administration, nearly 1,000 have gone to unions. These waivers have buffered union members from increases in insurance premiums. These waivers expire in 2014 and, unless they are extended, union members will be faced with the same cost increases as non-union workers.
• Doctors. Despite public support by the AMA, doctors as a larger group suffer under Obamacare. Rates for Medicare services are reduced, but more importantly, Obamacare imposes a different payment system (Accountable Care Organizations) that would replace the current system. Polls have shown that up to 40% of doctors would retire and/or get out of the patient care business.
• Patients. With fewer doctors and up to 30 million additional patients seeking service, quality of care is likely to go down, waiting times are likely to go up and approvals of treatment are likely to be withheld.
• Allied Health Professions. Their jobs will be harder, but more secure and better paying. The demand for lower cost service providers will increase as doctors leave the profession or forego routine procedures. However, Obamacare will impose additional documentation requirements on the support teams.
• End of Life. Obamacare’s program for end-of-life care (CLASS) had to be scrapped because of costs. Nursing homes were the winners, as were their residents. CLASS called for a stitched-together plan that would have kept more people at home… and away from needed 24/7 supervision and emergency care.
These seem to be the main Obamacare provisions that affect most of the groups with which we are associated. There are others, no doubt, that will come to light as the law is understood, interpreted, massaged by regulations, and, perhaps, amended. This entire area of public policy is likely to change, perhaps dramatically, as more people begin to find out what is in it, so attention to the news from Washington is strongly advised. Be an informed citizen.