Raul was licensed to offer health insurance in 11 states, and has spent years helping people enroll in insurance through the ACA.
What's the Difference Between the ACA and Obamacare?
Of course, the ACA and Obamacare are the same thing, but many Americans don't know it. In December of 2015, only 37% of Americans polled by Gallup approved of the Affordable Care Act, also known as "Obamacare." In April of 2017, this same poll showed 55% of Americans approved of the bill. The plan hasn't changed, so why the difference in opinion?
In 2013 and again in February, 2017, Jimmy Kimmel took to the streets to ask random people which was better, the Affordable Care Act or Obamacare. I am reminded of a women who said the ACA was better than Obamacare because, and I quote, "I don't like Obama."
Of course, the segment was edited for entertainment, but having spent the past two years helping people from all corners of the country enroll in insurance through the Affordable Care Act, the results are not exaggerated. There is a great many people who are simply not informed on the issue. I couldn't count the times a client would aggressively tell me they did not want Obamacare, but were more than willing to enroll when I told them we would be enrolling them through the Affordable Care Act instead.
Approval ratings went up because people began to understand more about their healthcare system. Obamacare/ACA was one of the hottest topics of the election, which dragged on for more than a year, and the recent possibility that the system could be repealed and maybe replaced has forced many Americans to take a closer look at what they stand to lose or gain without the ACA .
So, to understand our place in health-care history, we may need to look at how we got here.
Health Care in America: A Brief History
In the early twentieth century hospitals began offering prepaid plans for their medical services. According to bcbs.com, in 1929, Justin Ford Kimball of Baylor University, created a "prototype," from which Blue Cross established plans offering pre-paid hospital care. in 1930 these plans began covering physician services. In 1935 employers were encouraged to offer insurance by the National Labor Relations Act. In 1973, the Health maintenance Organization (HMO) Act was passed to help lower health insurance costs. in 1996 the Health Insurance Poratability and Accountablility Act (HIPPA) was passed to protect the Americans privacy, and...
Along the way Medicare, Medicaid and Chip were passed into law. As you can see, we have been "tweaking," as a friend of mine recently noted, the health care system for almost 100 years. I venture to argue that the ACA is another step on that path. So what are we doing about it? What should you do about it? Maybe, we shouldn't decide until we have had the chance to maybe understand the system a little better. So, here's hoping I can help clear things up.
ACA or Obamacare?
The Invention of Health Insurance
When hospitals offered pre-paid plans for their services, the goal was to help people pay their medical costs before they were incurred. Once private insurers became the prominent providers of pre-paid health plans, corporate profits had to be become part of the cost of medical treatment. Like an old boss once told me, "nobody goes into to business to lose money." Because of this, the government needed to ensure those most vulnerable were not left behind.
President Lyndon Johnson signed The Social Security Amendments (commonly known as the Medicare bill) on July 30, 1965. The bill established Medicare for the elderly and Medicaid for the poor.
In 1972, the law assured people age 65 would be automatically covered along with the disabled. In 2003, the law was amended again. This time creating Part D; prescription drug coverage.
There are 4 parts to Medicare: Part A: Hospital insurance, for which people age 65 are automatically enrolled at no cost. Part B: Medical insurance, which will usually deduct a little over 100 dollars from their social security retirement check. Part C: Optional coverage that replaces parts A,B and D with a private insurance company, used to help lower out of pocket costs. And Part D: Prescription drug coverage through a separate insurance company.
Medicaid and Chip
Initially signed into law to provide insurance to families receiving cash assistance, Medicaid now covers Pregnant women and people in need of long term care as well as the poor.
In 1997, after an effort to introduce universal health care failed in congress, the Children's Health Insurance Program (CHIP) was passed. According to the Centers for Medicare and Medicaid Services, 1 in 7 children are covered through the CHIP. That's more than 11 million American children. CMS.com states "many of these children come from uninsured working families that earn too much to be eligible for medicaid."
The Growing Need for Health Insurance in the US
A study published in the American Journal of Medicine in 2009 "revealed that 62.1% of all bankruptcies had a medical cause. By comparison, an article published January 12, 2016, by the same journal, states "as recently as 1981, only 8% of families filing for bankruptcies cited medical reasons." Rising medical costs and the quest for larger profit margins for insurance companies over the past 36 years forced the burden onto working families.
As we entered the 21st century, the United States had fallen behind 32 countries that had already established working forms of universal healthcare. While the "greatest nation in the world," was allowing millions of its citizens to lose their homes, or even die because they couldn't afford health insurance. When they could afford it, insurance companies could refuse services that were too costly. Most people that claimed medical reasons sent them into bankruptcy, had insurance. All the while countries like New Zealand (since 1938), Japan (1938), Germany (1941), Belgium (1945), United Kingdom (1948), Sweden (1955), Canada (1966), and Norway, who started a single payer system in 1912, proved universal health care could work. There are many more, but the list is long, and the point is made.
Theodore Roosevelt believed "no country could be strong whose people were sick and poor." Although Roosevelt may not have pushed for universal healthcare, the progressive association that first proposed some sort of insurance for all, at least all working families, was formed during his presidency: The American Association of Labor Legislation. Pnhp.com (Physicians for a National Health Program) described the bill in an article "transcribed from a talk given by Karen S. Palmer in 1999." In the article pnhp.com states the bill was "drafted in 1915...limiting coverage to the working class and all others that earned less than 1200 per year. Costs were to be shared between workers, employers and the state." Obviously, "opposition from doctors, labor, insurance companies, and businesses contributed to the failure." By 1930, the plan was dead.
Whether it was Medicare, Medicaid, or Chip, progressives have been pushing for Universal health care for over 100 years, and each program, including the Affordable Care Act, is a step in that direction.
Patient Protection and Affordable Care Act
Increased political pressure and struggling Americans during the recession and the Election of a progressive minded president created the opportunity to get some sort of health care reform passed through congress. It took 18 months of negotiation for the bill to pass congress, but on March 23, 2010, the Patient Protection and Affordable Care Act became law.
The ACA is a law. It is a set of guidelines put forth to ensure insurance companies provide true medical coverage for their clients. It provides help, in the form of tax credits to help lower costs and insure more people. The most critical of those guidelines are the 10 Essential Health Benefits each insurance company must provide if they want to receive payment from clients in the form of their tax credits.
10 Essential Benefits Covered by the ACA
- Ambulatory patient services (outpatient care). Coverage through doctors offices or clinics, hospice or home health.
- Emergency Service (Trips to the emergency room)
- Hospitalization (treatment in the hospital for inpatient care)
- Maternity and newborn care
- Mental Health services and addiction treatment
- Prescription drugs
- Rehabilitative services and devices (speech, physical or occupational therapy)
- Laboratory services
- Preventive services (counseling, physicals, immunizations, and cancer screenings like mammograms
- Pediatric services (care for infants and children)
(You can find the complete list and descriptions on healcare.gov or Obamacarefacts.com.)
These benefits are possibly the reason insurance premiums have gradually increased. Many of these, plus the portion of the law that mandates insurance companies cover pre-existing conditions, have forced the insurance companies to pay expenses they previously could deny.
Along with the essential benefits, the ACA also mandated states expand Medicaid to cover anyone below 138% of the poverty limit (FPL). For a family of 4 that's an annual income of $33,948 dollars. Before the bill could be passed the supreme court ruled that the federal government could not force states to expand Medicaid. What this means, is that if a state expanded medicaid (which 31 states have done, as of April 2017), then in those states anyone who earns less than 138% federal poverty limit qualifies for medicaid. In states that have not decided to expand medicaid, anyone below the FPL does not qualify for any insurance unless they earn little to no income. They fall into the income gap. For example, Texas has not expanded medicaid leaving over 764,000 people without insurance who would have it otherwise. Texas had the highest uninsured rate at 17.1% compared to Massachusetts at 2.8%.
Before the ACA and medicaid expansion, States were responsible for about 40% of medicaid funding while the federal government funded the other 60%. Now, with medicaid expansion the federal government funds 100% of medicaid for the first 3 years and 90% every year after that. Its no surprise that states that have refused to expand medicaid are struggling to balance their budgets while states like Minnesota are thriving economically. Medicaid expansion has eliminated many of the medical costs of the uninsured, and mental health and drug and alcohol rehabilitation costs covered under the ACA. Not to mention the jobs created for state Health and Human Services, insurance advisers and insurance company growth.
Tax Credits (APTC)
Perhaps the most complicated portion of the law revolves around how the ACA attempts to make insurance more affordable.
People earning less than 400% of the Federal Poverty Limit qualify for some sort of help from the IRS. For most people that comes in the form of Advanced Premium Tax Credits (APTC). This is money that is paid directly to Health insurance companies on your behalf. Since they are based on a percentage of your income, when premiums go up, so do the credits.This is how some people can pay little to nothing for health insurance.
This is also where many people get into trouble. Many people may feel they can get a lower monthly price by understating their income. While this might be true, the IRS will compare the income claimed on your tax return for the year of coverage (usually the following tax year) to the income claimed on the ACA application. If the IRS finds that you took an advanced tax credit that you did not qualify for, the IRS will attempt to recover it from your tax return. Unfortunately this isn't always the clients fault. There are many agents out there on a commission based salaries that sell on price and leave the client to reap the consequences. In my experience, most people blame "Obamacare" for this.
In an attempt to keep costs down, young healthy people have to also sign up for health insurance. This creates premiums for the insurance company with little expense. In order to achieve this a penalty was put in place to encourage people to enroll. For 2017 it is just under $700 dollars per adult or 4% of total income (whichever is higher).
To enroll, an exchange was created online to streamline the process. After several hiccups, mostly do to extremely high volume, the exchange is fairly easy to use. This exchange is called the Federal Health Insurance Marketplace, usually referred to as just the marketplace. Its purpose is to help people apply for the tax credits, then find an insurance provider that will use those credits to help lower your premiums.
In an attempt to reduce the number of people dropping their insurance, an open enrollment period was set. For coverage to count for the following year enrollment must be completed between November 1st and January 31st.
Federal Poverty Limit
What's not Working?
The largest negative impact is being felt by older Americans that earn an income just above 250% of the Federal Income Limit. These middle-class Americans earn too much to qualify for tax credits, which leaves them paying for their own insurance. Also, because they are older they are more likely to use their insurance which allows insurance companies to raise premiums on older clients. How is this possible? you ask. The law mandates that insurance companies spend no more than 20% of premium payments on administrative costs (salaries, wages, business expenses). All other money must be spent on the clients medical costs. Since older people have more costs, insurance companies can raise premiums based on age.
Another problem is that while premiums rise, people are finding it less expensive to pay the penalty than actually buying insurance. This hurts cost because the majority of people buying the insurance are using it. As silly as that sounds, the hope was healthy people would pay into the insurance to lower costs since they were not using it.
Now What? Single Payer, Repeal and Replace, or just Repeal
Hopefully we all have a better idea of what our health care system actually looks like; how it works and how it doesn't. So what now? When introduced, the ACA looked very different than it does now. During the 18 months of negotiation parts were removed while other parts were added. The ACA became something different because of compromise.
One of the compromises was the removal of Medicare, which was first included as a marketplace option to hopefully add competition. When that was removed, the medicare qualifying age was lowered to 55 to combat the expected rise in costs with age. But, that was also removed. Now, Senator Bernie Sanders is pushing for a Medicare for all option to replace Obamacare. In his plan, Medicaid would be expanded in every state, while taxes would be raised on the higher income taxpayers, and existing tax credits would be applied to Medicare instead of being paid to insurance companies, which would essentially be hurt most by this idea.
Repeal and Replace is the current plan being pushed by congress. The current congress has struggled to find middle ground on the "replace" portion of the bill. Some want a complete repeal of all aspects of the ACA, while others want to keep most of the essential benefits. Some want to eliminate tax credits while others want to issue vouchers to help citizens pay for their insurance through insurance companies. The other possibility would be to simply repeal the ACA, without a replacement option. The idea here is to repeal the law effective 2020. Allowing congress time to create and finalize a replacement.
100 Years of Progress
Imagine how difficult it was to live as a low income 67 year old man or woman in 1960, having to live with chronic back pain, cataracts and diabetes who can't afford treatment. Or what it was like to be the parent of a child with a temperature in a poor neighborhood in 1995. Or what it must of felt like to fight with the insurance company over pre-existing conditions while your mother was dying of cancer in 2007. Imagine...
Now re-imagine the people from each scenario in 2016. The 67 year old man or woman has Medicare, The sick child is at the clinic because he or she has CHIP, and Your mother is being treated for her cancer because it is against the law for the insurance company to deny her because of pre-existing conditions.
We have made progress. Slow and tedious, but progress none the less. Medicare has been amended several times over the past 50 years. Sometimes its gotten better sometimes it hasn't, but it has always done more good than bad. 20,000,000 more people have health insurance in 2016 than did in 2010. We should learn from our past successes and work to improve on what we have.
Want to do something about it? Vote, get involved, contact your congressman. Make your voice heard.
Families USA: Federal Poverty Guidlines, February 2017
Physicians for National Health Program: A Brief History: Universal Health Care Efforts in the US,
Obamacarefacts.com: Cost Sharing Reduction Subsidies
www.governing.com: Health and Human Services; States with the highest uninsured rates, by Mattie Quinn September 13,2016
U.S. News and World Report, by Richard Lopez, March 2, 2017; USNews.com
CNBC Dan Morgan, May 29th 2015, Don't Mess with Medicaid Expansion
truecostblog.com, January 21, 2013 List of countries with Universal Healthcare
The Atlantic, June 28, 2012, Here's a Map of Countries that provide Universal Healthcare (America Still Not On It), by Max Fisher
The American Journal of Medicine,January 12, 2016, amjmed.org, Under #ACA Medical Bankruptcy Continues
CNBC Dan Morgan, June 25 2013 CNBC.com Medical Bills are the Biggest Cause of US Bankruptcies: Studies
www.CMS.Gov: Centers for Medicare and Medicaid Services; History
Obamawhitehouse.archves.gov:Healthc coverage before the ACA
wwww.bcbs.com: Blue Cross Blue Shield, Health Insurance from Invention to Innovation
www.gallup.com: July 10 2015, Jeffrey M. Jones; Americas Views of healthcare law improve
CNN Money, money.cnn.com: Tahmi Luhby april 5 2017; More than half of Americans approve of Obamacare now.
www.aol.com, February 5 2017, Obamacare reaches highest ever approval rating as GOP prepares for repeal
© 2017 Raul Sierra Jr
FlourishAnyway from USA on April 24, 2017:
This was a thorough article on a very complex topic. I recall the days of pre-existing conditions and it was not a good thing.
Raul Sierra Jr (author) from El Paso, Texas on April 23, 2017:
Good Point. Sources have been included.
Kathleen Cochran from Atlanta, Georgia on April 23, 2017:
Very informative. Wish you'd include your sources for this great work. Thanks for the effort you've made. It shows.
Raul Sierra Jr (author) from El Paso, Texas on April 23, 2017:
Thanks. Lets hope an informed electorate can continue applying pressure to improve on what we have, not eliminate it.
Howard Schneider from Parsippany, New Jersey on April 23, 2017:
Excellent analysis of this complex subject, Raul. Our current Affordable Healthcare plan is far from perfect but at least people have true access to this vital need. This will end if president Trump and Speaker Ryan have their way. Great job.