What Is Obamacare And Why Don’t People Know After Almost 8 Years?
“We have come up with a solution that’s really, really I think very good,” Trump said at a meeting of the nation’s governors at the White House.
“Now, I have to tell you, it’s an unbelievably complex subject,” he added. “Nobody knew health care could be so complicated.”
Really? From what we know now, most people did not like this bill and everyone knew healthcare was complicated but that’s neither here nor there.
The Affordable Care Act (ACA) also known as Obamacare (yes they are the same thing) has been a source of controversy since its inception. After 8 years, people still don’t know what is it and how it works. Let’s try to get to the bottom of it.
ObamaCare doesn’t create health insurance. It regulates the health insurance industry and helps to increase the quality, affordability, and availability of Private Insurance and expands and improves public health insurance options like Medicare, Medicaid, and CHIP. It also helps expand private coverage options inside and outside the workplace through subsidies, mandates, and taxes. The law does this by creating new rules for insurers, expanding Medicaid eligibility to tens of millions of Americans, and improving Medicare, expanding employer health insurance. It also created a Health Insurance Marketplace where Americans can buy subsidized, regulated health insurance in a competitive private market. There are also more reforms to the health insurance and health care systems.
ObamaCare doesn’t create a government-run healthcare system or Government insurance. It greatly expands business for the private for-profit health insurance industry, creating about 12 million new customers. ObamaCare regulates the “free market” and expands existing public programs; it doesn’t create new types of insurance.
Obamacare Is Mandatorily Funded
As explained by Sarah Kliff in the wake of a possible government shutdown in 2013, the law uses mandatory funds for its really big programs. That includes the exchanges where uninsured people will be able to shop for coverage. The Medicaid expansion is funded with mandatory funding, as are the billions in federal tax credits to help with purchasing coverage.
Those mandatory funds were appropriated in the Affordable Care Act and, without repealing Obamacare, legislators cannot touch them. Even in the face of a government shutdown, this is the spending that sticks around.
So, Obamacare is largely insulated from yearly budget negotiations. Health and Human Services could rely on “sources of funding other than annual discretionary appropriations to support implementation activities, including multiple-year and non-year discretionary funds still available for obligation as well as mandatory funds” according to the Congressional Research Service.
Putting the mandatory funding aside for a moment, the Congressional Research Service also points out that Health and Human Services isn’t really counting on additional funding from Congress. The agency has requested – and Congress has repeatedly denied – additional money to set up the health-care law. Without that, it’s identified other funding sources that it can use to make implementation work.
This includes everything from money in the Public Health and Prevention Fund (which has permanent appropriations for the next decade) and transfers from other HHS accounts. In other words, HHS already operates under the presumption that it’s not getting additional Obamacare funding from Congress. Agency officials know that Republicans aren’t going to help fund a law they want to repeal. So they’ve already built a budget that doesn’t rely on additional federal funds.
Obamacare Is Not In A Death Spiral
Reed Abelson and Margot Sanger-Katz outline how Obamacare is not in a death spiral, an actuarial term that refers to a vicious cycle when rising insurance costs force healthy customers out of the marketplace, resulting in still higher prices, which cause even more customers to bail, etc., until the system collapses. new estimates from the Congressional Budget Office contradict this long-held talking point. According to the budget office, the Obamacare markets will remain stable over the long run, if there are no significant changes.
The Obamacare market has endured hardships. It isn’t as competitive as many of its advocates had hoped, and shoppers in many parts of the country have only one insurer to choose from. Prices, which were lower than expected in the first few years of the program, spiked this year by an average of 22 percent across the country. There have also been some high-profile exits from insurers like Aetna, UnitedHealth Group and most recently Humana. Rural counties have been particularly hard hit.
But those recent woes are not the same as a death spiral. Growing evidence suggests that the markets are far from collapse. Because of how the subsidies work, people were generally shielded from this year’s higher prices, and enrollment is steady. Several recent analyses argue that this year’s increase was a market correction, and that a smoother market would follow in the years ahead.
Many insurers had been struggling to make money but now seem closer to breaking even, said Deep Banerjee, an analyst with Standard & Poor’s. This includes Health Care Service Corp., which operates Blue Cross plans in numerous states and recently reported that financial results improved in 2016. The industry should do even better this year because of higher premiums and other changes the insurers have made.