EFFECTS OF OBAMACARE MBAA 2014

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5 Big Efects of Obamacare

THE LATEST ON THE ACA
EFFECTS OF OBAMACARE MBAA 2014
For the past few years, features and
benets from the A!ordable Care
Act have been methodically rolled
out and implemented, changing the
United States Healthcare system as
we know it. Along with these
changes undoubt edl y came
opinions and emotions ranging from
extreme disgust to extreme joy
regarding each and every facet of
the new law.

One of the most notable changes came in 2010 when the A!ordable Care Act began
a!ording young adults the opportunity to stay on their parents insurance until their 26
th

birthday.

In 2011, many options to aid seniors in getting the care they need were implemented.
Then, in what many perceive to be the mother of all changes came along in 2013 when
open enrollment began, and the majority of the American public was given a deadline
to enroll in a healthcare plan.

At rst it appeared as though the open enrollment period was a bust, many people
were up in arms about the di#culty in signing up for plans, the cost associated with the
plans and the overall unfamiliarity many felt with this new system.

Some consumers publicly stated that they were planning to opt for nes rather than the
una!ordable coverage they found to be among their healthcare choices.

Now that the proverbial dust is starting to settle, though, a clearer picture is emerging,
showing the actual, real-life e!ects of this big shift and the way Americans utilize and
benet from the new healthcare laws.
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At rst it appeared as though the open
enrollment period was a bust, many people
were up in arms about the difculty in signing
up for plans, the cost associated with the plans
and the overall unfamiliarity many felt with this
new system.

EFFECTS OF OBAMACARE MBAA 2014

Individuals with incomes less than four times the federal poverty level qualify for
subsidies to help pay for their insurance coverage. As it stands, almost 90 percent of
those who signed up for a plan on the federal exchange qualied for assistance.

Nearly 70 percent of those who qualify for assistance by way of subsidies are paying
less than $100 per month. In fact, the average full-priced premium per month is $346,
and the average premium for
those qualifying for subsidies is
$82.

While this staggering statistic is a

good indicator that healthcare was
made more a!ordable for many
(made obvi ous by the l arge
number of low-income enrollees),
the cost of these subsidies is no
laughing matter.

The federal government will likely

spend upwards of $11 billion on
these benets, and this includes
those who enrolled at the last minute
and will only receive assistance for a portion of the year.

These numbers also do not include about 33 percent of new enrollees whose
exchanges are run by their individual states. According to federal o#cials, data is
unavailable for those states. It is reported that if the states that run their own
exchanges have comparable numbers, subsidies could wind up costing the federal
government a whopping $16.5 billion.

Furthermore, the Congressional Budget O#ce estimates that the cost of subsidies per
year will top $95 billion by 2024. This blow, however, was cushioned with the
condence that additional revenue and cuts in other areas of healthcare will likely
balance this number out.
As previously mentioned, millions of young adults are benetting from the provision in
the A!ordable Care Act that allows them to stay on their parents insurance plan until
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Efect on Subsidies
Efect on Young Adults
EFFECTS OF OBAMACARE MBAA 2014
their 26
th
birthday. The Center for Disease Control reported an estimated drop in
uninsured young people of one-sixth its original number, which equates to 1.6 million
more young people becoming insured. This is the largest drop on record since the
Center for Di sease
C o n t r o l s t a r t e d
gathering such data 17
years ago.

Another win for this

category is that 6.2
percent more young
adults reported being
in excellent physical
health and 4 percent
more reported being in
excellent mental health
t h a n i n p r e v i o u s
studi es. The same
group al so saw a
decline in yearly out-
of-pocket expenses.

Whats more, strong

opponents of Obamacare, including Mitt Romney and John Boehner, would like to see
Obamacare repealed, but would like to keep this part of the law in e!ect. So, no matter
what happens in the future with Obamacare, it has likely set a positive trend
considering the healthcare of young adults.

States that elected to expand Medicaid in order to provide relief to those who fall in the
coverage gap (individuals with incomes too low to qualify for Obamacare subsidies
and too high to qualify for Medicaid) are seeing surges in Medicaid enrollment.

Enrollment numbers were up by 15 percent, with six million new enrollees, in the states
that expanded Medicaid. Included are the states of Oregon, West Virginia and Nevada,
which saw enormous enrollment increases of 40 percent each.

While this surge was to be expected, states that did not expand Medicaid are also
seeing a rise in enrollment. With all the coverage of Medicaid, some people are just
now realizing they qualify with or without expansion. Some o#cials cited this
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Efect on Medicaid Enrollment
EFFECTS OF OBAMACARE MBAA 2014
woodwork e!ect as a large reason for rejecting the expansion of Medicaid in the rst
place, so this is denitely an increased and unexpected cost. South Carolina is one
state that saw a large increase 14 percent to be exact. It was reported that this was
not due to the woodwork e!ect but more so because o#cials were actually seeking out
individuals who were previously eligible but not enrolled.
Although the employer mandate has not gone into e!ect yet, some companies have
already reported putting a stop to hiring or even downsizing and cutting hours to stay
under the radar and avoid having to provide insurance to all full time employees when
the time comes.

When (and if) the employer mandate goes into e!ect, companies with 50 or more
workers must o!er insurance to all full time employees or face a penalty. Even
proponents of the A!ordable Care Act reportedly want this whole mandate to
disappear, and hope that the delays in implementation are a sign of its fate.

If the employer mandate is implemented, some employers who have no way around it
have already said they will opt for the penalties because they are less expensive than
providing insurance for everyone.

They have also said that what should be a simple act of reporting employee status and
numbers to the government is too cumbersome with the A!ordable Care Act and that it
will be too costly and will drain more resources than they are willing or able to sacrice.

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Efect on Businesses
When (and if) the employer mandate goes into
efect, companies with 50 or more workers must
ofer insurance to all full time employees or face a
penalty. Even proponents of the Afordable Care Act
reportedly want this whole mandate to disappear,
and hope that the delays in implementation are a
sign of its fate.

EFFECTS OF OBAMACARE MBAA 2014

Contrary to many of its proponents predictions, insurance companies are beginning to

move toward, rather than away from, o!ering plans in the exchange. With a sort of
watch-and-wait year under their belt, insurers may be starting to see a chance to
prot, allowing them to feel more comfortable approaching the market.
Data from 10 states has been collected and shows that 27 new insurance companies
will be o!ering plans under the A!ordable Care Act next year. There has been no word
of current insurers pulling out of the exchange, so each new provider will be adding
positively to the number of
options rather than replacing
those that are pulling out.
Previous reports gave daunting
f orecasts about i nsurance
companies impending refusal
to o!er plans or backing out of
the exchange, creating a lack of
competition in the exchanges.
So, the great news for the
A!or dabl e Car e Act and
consumers is that insurance
companies are beginning to le
in. Experts say insurers really
dont have much of a choice and
would be unwise to opt out of participating when more than 8 million people in 2014
signed up.
Good news for consumers is that more insurers mean more competition, and some
companies are already proposing rate decreases. According to the numbers that are
currently available for 2015 premiums, it seems as if previous doomsday predictions
about rising premiums could have been dramatized.

Some insurance companies, however, have% reported% that they'll have larger increases
in the premiums they o!er, but the numbers are not denitive as of yet.

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Efect on Insurers
EFFECTS OF OBAMACARE MBAA 2014
Overall, the e!ects of Obamacare are still on a proverbial seesaw, and there are still
many kinks to be ironed out. It does appear as if it is fullling its purpose of making
healthcare more accessible to the general population.
Is it sustainable, especially considering the high cost subsidies and volatile premium
prices? As made obvious by some of the surprise results weve seen thus far, only time
will tell.

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