How the healthcare law may benefit you

There has been so much disinformation about the ACA (Affordable Care Act) from it's opponents that almost no one knows what the basic elements of the law are. It is a law that will be beneficial to almost everyone in the country. I will try to clear up what I see as some of the main misconceptions about what is happening and why it has already been good for you. 

The first thing you should know is that the law has been in effect for several years. The reason you have heard so much about it lately is that the final piece of the law went into effect on Oct 10th of this year. This is likely the least significant part of the law but it is in effect the cornerstone on which the rest of the ACA is based. 

The easiest way to think about this large scale bill is that it has three main components.

1. Federal Industry regulation for all medical insurance policies
2. Medicaid expansion to cover poorest residents (individual state's choice)
3. State healthcare exchanges (operated by states if they so choose)   

The part of law impacting the greatest amount of people is. 
"Part 1", (this, it must be noted) has already been in effect for several years. It is the section of the law that will reaches everyone who now has health insurance. Insurance has been largely state regulated and often almost unregulated because of these insurance companies wealth, influence, and power. Some examples of this were policy limitations, preexisting condition exclusions and lifetime beneifit caps. Basically the companies held all the cards and they determined what was inside a policy and what would be included in a policy and even how they might deny coverage for a claim. 

The federal law has now determined basic minimum standards for the industry. Some examples are: not charging women higher premiums because of their gender. Birth control will now be covered for anyone who wants it. No lifetime disease caps, previously you were only covered to a certain dollar level and then you were on your own after expenses hit this amount. The practice of seeking legal exclusions for coverage had been limited. A base amount of policy premiums must be used for medial care or returned to policy holders. Young adults may now remain on an their parents policy until the age of 25.

But, the price of my insurance has not gone down this year.  If you did not get a check from your insurer last year (and millions of people did) then your provider spent more than 80% of premiums on coverage expenses, and you probably have a well run plan.  The cost of healthcare did go up this year so insurers are paying out more to providers.  The cost of healthcare has been rising at about 9% per year for the past 10 years. The ACA cannot immediately reverse things and make healthcare costs go down. What it can do and already had done is to "bend the curve" of healthcare cost increases. In the past two years we have seen the cost increases halved to about 4 1/2% per year. When everything is fully implemented we will likely see further reductions.  Will we see long-term costs go down? That is difficult to predict at this point but by cutting increases in half there has already been major savings for all policy holders.

So how am I better off now under the ACA?  
There are much stronger protections from being denied coverage on your policy, you or your children can't be capped out by lifetime limits of a policy. Federal guidelines set minimum policy coverage standards. Females cannot be charged higher rates based on gender. Insurers must now spend 80% on healthcare expenses or return excess to policy holder's.  Children can remain covered on their parents plan until age 25. If you lose your job or your current coverage you will now have an option to remain covered regardless of your health condition (see exchanges in part 3).

You will hear two consistent complaints about the ACA in the debate about the law: 
1) It will cause your policy costs to go up. Your employer is still getting healthcare the way they always have on the private market, they can shop and get the best rates for their employees exactly like in the past. Other than the stronger industry regulations there are no extra costs imposed by the ACA on employers. Small businesses with less than 40 employers are are exempted from having to provide coverage. Healthcare costs are still going up so policies will reflect these cost but, the increase rate has been cut in half the last two years. Chances are very good that rates will rise even slower once the ACA is fully implemented. 
2) It will cause great unemployment. 
This argument is based on the idea that companies will limit employee hours to less than 30 per week to avoid having to provide insurance.  The problem with this argument is companies can and are doing this right now, just as they have been doing for many years. Companies make decisions based on money.  It is very simple if they think it is in their interest to offer healthcare to their employees then they will find a way to do it.  If they think they can save money not providing it then they will go that route.  The "Free Market" is at work here so don't blame the ACA for this one.  Remember that anyone who cannot get employer coverage is still eligible to find policies on the healthcare exchanges. 

  

Part 2 of the ACA involves covering the poor. Any type of plan to address healthcare issues must have one vital component, the ability to offer some type of coverage for everyone. Failure to do this will mean huge losses for hospitals which will eventually be passed on to insurers. This is one part of the ACA that has been modified since it's passage. Originally  Medicaid has been the purview of the  State's to administer. The ACA needs to try to cover as many of these people as possible to make the model as efficient as possible. 

The Federal government told the states that they would cover 95% of the state costs for enrolling new people in Medicaid. Some states accepted the offer and some did not agree. They eventually went to the courts to stop the program finally the Supreme Court decided to let states make determinations for themselves on whether or not to expand coverage. This was seen as a loss for the ACA, but many states have decided to take the Federal dollars and protect their poorest residents. 

Now even Republican led states (like Arizona and Ohio) are agreeing to join the program, the big push will eventually come from the hospitals that are providing unreimbursed treatment to indigent residents. Texas with almost 1/3 of the state uninsured and Florida too will be forced by economics to add medicaid coverage for their poorest residents. 

This part of the ACA gets the least publicity because there is almost no one to speak up for the poor and disenfranchised. This is however, very important to making the whole plan successful by reducing increasing costs.

The table shows that bringing people into Medicaid means a lower overall increase in healthcare spending and more control of costs. This part of the ACA will be the most difficult to finalize but all the states will eventually fall in line.

The final Piece of the healthcare puzzle 

3) Healthcare exchanges

If you add everyone up who is currently covered by insurance figure in those and who will potentially covered by Medicaid expansion and subtract that from our 330 million population you will have about 29 million people left over. These folks are the most difficult to deal with because they may be working for a small employers, be independent contractors, or they may have a preexisting condition preventing them from getting any insurance. One thing they have not had, is, bargaining power. Large employers or state governments can use their size to help get better rates but, for this group their was not much hope.

The plan was to have individual states set up healthcare exchanges for their residents and many of them have done so. It is important to stress these are all private insurance companies many of them are the same people who insure the corporate giants in each state but, because all of this group is pooled together all of a sudden they become valuable clients for the insurers.  Because the ACA has been so controversial for Republicans they have almost all chosen to fight against the law. This has left the field to the Federal government to manage their states.

We are currently in the pre-enrollment period for the exchanges. The policies at the exchanges do not go into effect until Jan 1, 2014 and Uninsured residents have until March 15th to find an insurer and pick some type of policy or they will be levied a small fine on their tax return.  To help encourage enrollment in the program tax credits are offer to those people who earn less than 150% of the federal poverty level. 

A tale of two systems 

Many people are extremely pleased with the operation of the state exchanges and they have already been successful at signing up many of their eligible residents. 

The rollout of the website for the Federal exchanges has not gone smoothly in its first weeks.  Initially it was overburdened by requests for information but then problems with the website programming and infrastructure surfaced.  The problems are being corrected but because the system ties so many government databases together it is extremely complex. 

I have been on the federal exchange for Texas and it is not really user friendly. I was able to get registered after several attempts and I am extremely pleased to be able to finally qualify for health coverage. 

P.S.

A final thought

The ACA is not a perfect solution for the US healthcare crisis, just reading this you can see how it has been altered from it's original design.  It is however, far better than the system that has given us the worlds most expensive healthcare. The expense is not justified by results (US is13th in the world by average longevity). I know people who hate government will just see this as another federal social program. Please do remember this is still an almost all private insurance system with minimal government intrusion. It will undoubtedly have it's growing pains but it can certainly be further adapted adjusted. 

To the skeptics I say, give this a chance to succeed. We have had a vacuum  in this area for so long and the unfettered "Free Market" has not served us well.  Let us try and see if we can't make this a success for the good of the country and it's people.