Running head: OBAMACARE; HOW GOOD IS IT?

Project one: OBAMACARE

Abel N'dri
Public Finance
Dr Chavez
February, 19th 2016

OBAMACARE; HOW GOOD IS IT?

According to the businessdictionnary.com, healthcare is the act of taking

preventative or necessary medical procedures to improve a person's well-being. It may be
done a number of ways such as surgery, the administering of medicine, or other
alterations in a person's lifestyle . These services are typically offered through a health
care system made up of hospitals and physicians.

In fact, in 2010, President Obama passed a law that, he said, would be beneficial to all
americans especially the ones from the middle and lower classes who lack of means to
obtain insurance and the one needing to improve theirs. Obamacare is a national law that
has two goals. One is to make health insurance better for people who already have it and
the other is to get health insurance for more of the 60 million people who are uninsured.
In order to do so, the law makes lots of new rules for private insurers (like Aetna and
BlueCross/BlueShield), public insurers (like Medicaid), employers, and everyday
citizens. This concept was piloted by Massachusetts in 2006 under then-Gov. Mitt
Romney. (Kevita Patel, 2013; slate.com
Obamacare,Healtcarehttp://www.slate.com/articles/health_and_science/medical)
At this point, the question we need to ask ourselves is does everyone value Obamacare
the same? Well for some people the affordable care act of Obamacare isn't really
affordable and others believe otherwise. In this paper we will first define how it is funded
then allows ourselves to go through the pros and cons of this law.

OBAMACARE; HOW GOOD IS IT?

Obamacare was estimated to be $1.207 trillion trillion dollars by year 2025 which,
according to Forbes Business Magazine will increase spending for a family of 4 by about
$7450 between 2014 and 2022. which sots of goes against what the president says when
he said the same families would achieve an annual saving of $2,400 dollars. This does not
sound affordable all of the sudden. Most importantly let's address this question. How will
the healthcare be funded? ( Chris Conover, Pharma and healthcare 2013, Forbes
Magazine)
The law is funded in part by this penalty/tax and also by increased taxes on other health
and non-health related items and services.
Besides the Individual Mandate penalty/tax, there are lots of other taxes and fees to fund
all that is required by this law.
We have the +.9% Increase in Medicare Tax Rate ,3.8% New Tax on unearned income
for high-income taxpayers= $210.2 billion ($200,000 for individual and $250,000 for
joint filers). Not to mention the new Annual Fee on health insurance providers = $60
billion (For calculation - Sec 9010 (b) of the PPACA.), the 40% New Tax on health
insurance policies which cost more than $10,200 for an individual or $27,500 for a
family, per year = $32 billion (inland tax as opposed to an importation tax)
when it comes annual fees we have the new Annual Fee on manufacturers and importers
of branded drugs = $27 billion (For calculation - Sec 9008 (b) of the PPACA)
2.3% New Tax on manufacturers and importers of certain medical devices = $20 billion
+2.5% Increase (7.5% to 10%) in the Adjusted Gross Income floor on medical expenses
deduction = $15.2 billion

OBAMACARE; HOW GOOD IS IT?

Limit annual contributions to $2,500 on flexible spending arrangements in cafeteria plans

(plans that allow employees to choose between different types of benefits) = $13 billion
All other revenue sources = $14.9 billion
10% New Tax imposed on each individual for whom indoor tanning services are
performed.
3.8% New Tax on investment income. Includes: gross income from interest, dividends,
royalties, rents, and net capital gains. Investment income does not include interest on taxexempt bonds, veterans benefits, excluded gain from the sale of a principle residence,
distributions from retirement plans, or amounts subject to self-employment taxes. (The
lesser of net investment income or the excess of modified Adjusted Gross Income over a
the dollar amount at which the highest income tax bracket, typically $250,000 for married
filing jointly and $200,000 filing as an individual). ( Obamacarefacts.com). Even Adam
claimed in a big title on October 2013 that the president wants to get rich off Obamacare.
So It seems like people have a really bad appreciation of the law.
On one hand, Tens of millions of uninsured people will get access to affordable, highquality health insurance through Medicaid expansion, their employers, and theHealth
Insurance Marketplace, while to be able to get the money to help insure all these people,
there are the new taxes listed above that are mostly on high-earners and the healthcare
industry. Also the taxes that may affect you directly are the individual mandate and the
employer mandate but let's not forget that over half of uninsured Americans can get free
or low cost health insurance, and even some of them can get help on out-of-pocket costs
using their states Health Insurance Marketplace. Thirdly, we have the individual mandate

OBAMACARE; HOW GOOD IS IT?

says all Americans who are abel to pay for health insurance have to obtain health
coverage, get an exemption, or pay a fee which can create more complication with
regards to filing taxes. people who just barely miss the Federal Poverty Level limit of
400% are hit the hardest as they dont qualify for assistance and those who do get cost
assistance will need to adjust tax credits on the 8962 Premium Tax Credit form. There
are also more private coverage options than ever, and all major medical coverage options
must provide minimum essential coverage.Over 20 million will be exempt from the fee
by 2016. Those with exemptions can often still get cost assistance. Exemptions also
qualify you for special enrollment. In order to get many of the exemptions, youll need to
submit a form toHealthCare.Gov or file the 8965 Exemptions form.
ObamaCares many protections ensure that you cant be dropped from coverage when
you get sick or make an honest mistake on your application. You also cant be denied
coverage or treatment for being sick or get charged more for being sick. Additionally, you
cant be charged more for being a woman. Other protections ensure that you have the
right to a rapid appeal, that health insurance companies cant make unjustified rate hikes,
and that these companies must spend the majority of premium dollars on care, not paying
executives. The Insurance companies have to cover sick people, and everyone else has to
pay for insurance now. In order to ensure people dont just buy coverage when they need
it, most people have to obtain coverage or pay a per-month fee. Besides that, coverage
can only be obtained during annual open enrollment periods. A person can owe the fee
due to forgetting to pay a premium, and then not be able to get coverage until next open
enrollment. some men in good health who have no pre-existing conditions, who were not

OBAMACARE; HOW GOOD IS IT?

responsible for anyone but themselves, and who remained healthy, were benefiting from
being in a low risk group but on the other hand they may have had cheap limited
coverage before the premium hikes took place in 2014. All major medical coverage must
count as minimum essential coverage. Generally, this means that coverage must offer
ObamaCares protections, cover essential health benefits such as free preventative
services, limit deductibles and out-of-pocket-maximums, provide minimum actuarial
value, and not have annual or lifetime dollar limits.Minimum essential coverage can only
be obtained during open enrollment unless you qualify for a special enrollment period.
Those who dont understand how to compare plans or didnt have coverage before the
ACA may be shocked by how cost sharing works on higher deductible plans. Also many
may get non-minimum essential coverage like short term because of their confusion.
Small businesses with less than 25 full-time equivalent employees can get tax credits for
up to 50% of their employees health insurance premium costs. Employee health benefits
can be expensive. Lower wage workers may end up getting better value through the
marketplace, but having employer-sponsored coverage means that they cant get cost
assistance. Also, dependents of employees with coverage are unable to use the
marketplace. Young Adults can stay on their parents plan until 26. 82% of uninsured
adults will qualify for free or low-cost insurance. Insurance helps everyone get lower
prices on healthcare and protects them in an emergency. ObamaCare retains a free
market and allows our $3 trillion dollar healthcare industry to thrive. We know that
young people tend to be healthy and do not need coverage as often as older Americans.
However, because of low premiums and the benefits of having a plan, they have some of

OBAMACARE; HOW GOOD IS IT?

the best deals of everyone under the ACA when purchasing care.
At the end of the day, Obamacare could be good for all of us. Of course it will
cost the government some kind of money. Trillions of dollars to be precise and all this
will be added to our taxes and even the people who believe they do not need it will have
to pay. Just like anything that is publicly given by the government, people do not hold the
same values. The right thing to do would be to make sure that the people who want it
actually understand how it might affect their wallets and the economy then make a
decision upon that affect doing their own cost benefits analysis.

OBAMACARE; HOW GOOD IS IT?

8
References

NATIONAL FEDERATION OF INDEPENDENT BUSINESS ET AL. v. SEBELIUS,

SECRETARY OF HEALTH AND HUMAN SERVICES, ET AL. (2012), pg 811
NATIONAL FEDERATION OF INDEPENDENT BUSINESS ET AL.v. SEBELIUS,
SECRETARY OF HEALTH AND HUMAN SERVICES, ET AL. (2012), pg 806[3][3]
http://www.medicaid.gov/AffordableCareAct/Provisions/Financing.html
Health Insurance Reform at a Glance: Shared Responsibility, House Committees on
Ways and Means, Energy and Commerce, and Education and Labor, MARCH 18, 2010,
Pg 1.
http://www.bcbsm.com/healthreform/pubs/premium_credits_and_costsharing_subsidies.pdf, pg 1
http://www.bcbsm.com/healthreform/pubs/premium_credits_and_costsharing_subsidies.pdf, pg 2
NATIONAL FEDERATION OF INDEPENDENT BUSINESS ET AL. v. SEBELIUS,
SECRETARY OF HEALTH AND HUMAN SERVICES, ET AL. (2012), pg 119
http://www.lao.ca.gov/reports/2010/hlth/fed_healthcare/fed_healthcare_051310.aspx
http://www.acscan.org/pdf/healthcare/implementation/background/HealthReformPremiu
mCostSharingSubsidies.pdf
http://www.bcbsm.com/healthreform/pubs/premium_credits_and_costsharing_subsidies.pdf
http://www.lao.ca.gov/reports/2010/hlth/fed_healthcare/fed_healthcare_051310.aspx
Obamacarefacts.cow
Forbes.com
Newyorktimes.com
Chris Conover, Pharma and healthcare 2013, Forbes Magazine
Kevita Patel, 2013;
slate.comObamacare,Healtcarehttp://www.slate.com/articles/health_and_science/medical