Up First, Obamacare

So why dilly dally with the small stuff?  Let’s tackle one of the most controversial topics first.  I will likely do follow up blog posts on things like the myth of Repeal and Replace, how there is no such thing as state line restrictions on selling health insurance, and what can be done to fix our health care system, this entry is going to provide a simple description of what Obamacare really is.

There are few topics that have more misinformation thrown about than Obamacare.  It seems to me that most people really have no idea what it is and what it is not.  So let’s go over some of the facts and fiction.  Hopefully this information can help some people deal with the nonsense that constantly thrown their way regarding this complicated topic.

Let’s start with the fiction.

Fiction 1 – Obamacare is NOT a government takeover of our health care system.   About half of the changes that Obamacare implemented were changes in the completely government run single payer system known as Medicare.    The other half of Obamacare is designed to help create a market for PRIVATE insurers to provide insurance to people who can’t get insurance through their employer.    These people represent about 5% of the working age population.

Fiction 2 – Obamacare is making health care costs sky rocket.   Since Obamacare was signed into law this country has seen its LOWEST health care cost increases in decades.  While that does not necessarily mean that Obamacare was the cause(correlation is not correlation) it does mean that people claiming that health care is skyrocketing because of Obamacare are either telling falsehoods or falling victim to recency bias.   For those looking for numbers here is a handy graph from Price Waterhouse Coopers…

10 year health care inflation trend
10 year health care inflation trend

Fiction 3 – Obamacare is going to cost us a fortune.  This one is probably the biggest doozy.  Obamacare had two primary objectives.  Provide a way for the uninsured to get insurance and address the looming insolvency of Medicare.  It achieved both objectives, somewhat.  Whether it was the best way to do it can be argued but compared to what was the status quo it most certainly is NOT going to cost a lot of money.  The Congressional Budget Office, which is task with projecting the economic impact of government policy, is pretty clear on this…

CBO projections on repealing Obamacare

Now let’s move on to some facts.

Fact 1 – There has been a 138% increase in health insurance coverage for people at or near the poverty line.  Prior to the implementation of Obamacare there were 41 million people that did not have health insurance.  After the implementation that number dropped to 28.5 million people.  Kaiser Foundation Stats

Fact 2 – While the term Obamacare continues to be fairly unpopular among Americans, the individual aspects of the Obamacare(aka the Affordable Care Act or ACA) are very popular. Even a strong majority of Republicans like most of the provisions of Obamacare.

People don’t like the individual mandate.  The individual mandate requires that all adults be covered by health insurance.  This is necessary to avoid what is known as a free rider problem where people choose not to have insurance until a serious medical problem hits them and then sign on.

Fact 3 – Obamacare got rid of useless health insurance policies.  Health insurance is one of the most complicated choices that we have to make.  Trying to figure out which plan is right for you requires coming up with a way to balance premiums, deductibles, out of pocket liabilities, and coverage.  For people on the individual market that could be close to impossible to decipher and many insurance companies exploited these people and gave them expensive plans that did very little.  Obamacare changed that by requiring that all plans include 10 mandatory benefits.  It also set a limit on your maximum out of pocket expenses for a given year. Currently those limits are $7100 for individuals and $14,300 for family plans.

Hopefully this brief primer can help people better understand what Obamacare really is rather than what it is portrayed to be.

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