Understanding Obamacare, Part 1
When I set out to write a weekly column about Obamacare, I could not have imagined what a daunting task was before me. I thought it would be simple enough to read the entire bill and then break it down, section by section, and explain it so that we could all better understand how the new healthcare legislation will ultimately affect everyone.
Small business owners, health care providers, seniors, patients with chronic illnesses…everyone has a vested interest. I planned to leave the politics out of it, to the best extent possible, and just focus on the facts. However when I interviewed doctors and small business owners, I found that people are so passionate about this issue and have so much to say, that the politics always made its way back into the discussion. Still, I will do my best to present facts only.
I do believe there is some hype and hysteria associated with the healthcare bill, and being afraid or misinformed will not help anyone. We need to understand the truth and what is before us. Nancy Pelosi said, “We have to pass the bill so you can find out what is in it.” Well now that it has passed, we can take a good look at what it means to business owners, those in the healthcare industry, senior citizens, and all of the rest of America. And who knows? Maybe we can go back and explain it to our legislators!
Understand, however, that with contradictions in statutory language, it has become a challenge for the IRS, for example, to even go about implementing various parts of the healthcare law. So if the IRS is confused about the language and understanding of what the law means, I think we can expect to be confused, as well. Therefore, I will do my best to translate what I have read, but I cannot promise that I have interpreted everything 100% correctly.
If you needed to lose 200 pounds, you certainly couldn’t do it in a week—and explaining the entire healthcare bill can’t be done all at once, either. So each Friday, I am going to present you with what I’ve learned and will share it here on PolitiChicks.tv.
Is it necessary? Should you only focus on how the law directly affects you?
Perhaps. But we are all affected directly and indirectly by everything contained in that legislation, so it is my belief that we need to understand it in its entirety. When and if we do, we can go back to the politicians and demand the changes we deserve and expect.
So how do we begin? I thought I would start with the basics. First of all, see if you can answer the following questions:
1. “Obamacare” is a term that stands for what?
2. What was the main purpose of the bill according to legislators?
3. Do you know if any parts of the bill have gone into effect yet?
4. When does everyone have to have healthcare according to the bill?
5. Name 5 changes in the healthcare industry that will go into effect from now through the year 2020 because of this legislation.
If you can answer even ONE of these questions correctly, you are better off than 90% of Americans (and most members of Congress).
“Obamacare” is officially known as the Patient Protection and Affordable Health Care Act (PPACA). It is also referred to as the “Affordable Care Act.” Congress initially passed the healthcare bill, and then President Obama signed it into law on March 23, 2010. On June 28, 2012, the Supreme Court rendered to uphold the law. The stated purpose is to provide affordable health care for all Americans.
In order to make sure everyone has coverage, uninsured Americans will be forced to purchase health insurance or face a fine of $695. According to the Congressional Budget Office’s (CBO) analysis that came out in September of this year, of the 30 million U.S. residents expected to be uninsured in 2016, 18-19 million will be exempt from the mandate or penalty. This is because 10-12 million of these people are illegal immigrants and they are all exempt from paying the fine. People with low incomes, members of Indian tribes and those whose premiums would exceed 8 percent of their income are also exempt.
According to the CBO, that leaves about 11-12 million people who will be subject to this mandate, but they estimate that more than half will take the penalty over buying costly insurance, particularly those who are young and in good health. If this happens, premiums for everyone else will go up, and this will devastate the private insurance market.
So this is where I personally find myself confused. Everyone is supposed to have access to affordable health care because they are all supposed to have paid for health insurance, deterred by the imposing fine. Except that half of the people won’t have to pay any fine since they are exempt, and the rest will choose to take the fine over paying for expensive policies. So who has health insurance in the end? Does anyone have it that didn’t have it before the healthcare law was enacted? And who pays the healthcare for those millions who remain uninsured? Roughly 1/3 of the 30 million uninsured are illegals. Who pays for them?
Remember, I am trying to keep politics out of it, but this mandate is what had Republicans up in arms leading to the Supreme Court ruling that it is Constitutional to levy a fine as long as it is considered a “tax” on the uninsured and not a “penalty” for not buying insurance. Semantics. Fine, penalty, tax…at the end of the day, it is supposed to discourage you from choosing to remain uninsured but it will not solve the problem of what to do with those who do.
Nor does it address the problem of enforcement. Who oversees all of this? That question was not on your quiz, but the answer is the IRS. It will be up to them to determine who is reporting their insured/uninsured status properly and for collecting the fines, penalties, or taxes. More bureaucracy, more government intrusion. But first remember that the IRS cannot even agree yet on how to implement the rules because the language is so confusing!
Click here to read Understanding Obamacare Part 2
