The law is entitled The Patient Protection and Affordable Care Act. It is an attempt to modify an untenable, unaffordable and unsustainable healthcare system that now leaves many citizens without healthcare and often exposed unnecessarily to more serious illness or even an early death.
In spite of ideological arguments and regardless of whether you believe health care is a human right or a saleable commodity, we have a system that the country cannot afford.
Eighteen cents of every dollar spent in the United States today goes to the healthcare system. That equals an annual expenditure of $8,000 per man, woman and child in the country or a total yearly expenditure of $2.5 trillion. This cost has doubled in the last decade and continues upward.
More than 50 million people are without health insurance and probably 25 million more are underinsured. These people will often wait until their illness is very serious or life- threatening before seeking help. This usually involves hospital emergency departments where the care is often hurried, temporary and much costlier.
Unlike every other industrialized country, the United States does not provide comprehensive healthcare, and one-fifth of its population does without. This is a total cost twice that of the next most costly country. Switzerland spends $4,000 per person per year and furnishes care for all its citizens. All other industrialized nations offer comprehensive health care to all at much less cost. Japan, one of the least costly, has the most comprehensive system and enjoys the longest life expectancy (83 years).
Life expectancy in he United States (79 years) is less than the world average, and the overall quality of health care is judged by the World Health Care Organization to be significantly below that in other industrialized countries. Two-thirds of bankruptcies in our country begin with a serious illness, and most of these people had health insurance.
The new law is to begin to modify these extremely serious and unsustainable problems. The law tries to work within the current system to limit costs and broaden the scope of healthcare for the majority of people. It falls short of a complete solution, but it is an important beginning. The Congressional Budget Office estimates the law will lower the budget deficit $210 billion in 10 years.
What it Does
The law provides for a sliding scale of subsidies to help buy health insurance for people who cannot afford the premiums.
If you had health insurance as of March 2010, the only change will be added protection from cancellation or any limit of benefits due to illness or use of policy.
Medicaid is expanded to cover all those under age 65 with an annual family (of four) income less than $32,000. The added costs will be paid by the federal government for four years. States must then pay 10 percent of the total increase. This would affect 290,000 people in Kentucky. Kentucky has not yet committed to expand its Medicaid program, but the state would benefit (estimate $12 billion) to a greater extent than most other states due to the number of people affected, which is a large portion of the uninsured.
Everyone with pre-existing health problems previously not insurable must be offered health insurance. This applies to children now and adults in 2014.
Children of insured adults will be continued on family policies until age 26. Females cannot be charged higher premiums than males for health insurance.
The law provides for preventive check-ups and immunizations and forbids any co-pay charges for these services.
The “donut hole” in Medicare Part D was adjusted with a $250 subsidy in 2010 with yearly increased discounts and closure by 2020. It provides $11 billion over 10 years to support current Community Health Clinics and to help establish new ones.
Health Insurance Companies can no longer cancel policies for illness, nor set annual or lifetime limits on benefits.
The law supports employer paid health insurance by tax credits for small businesses with less than 25 employees (35 percent this year – 50 percent in 2014). Small businesses may also form groups for the purpose of negotiation with health insurance companies. Businesses with more than 100 employees must offer paid health insurance policies.
States are required to establish a Health Insurance Exchange program by 2014. This new program will offer an independent market of health insurance plans. This will add competition to the health insurance market and assist businesses and individuals to compare plans and obtain coverage. The Congressional Budget Office has estimated this will lower premiums about 4 percent.
Health Insurance overhead expense will be limited. The law requires 80-85 percent of premiums to be used for benefits. Limits are also set on overhead expense for executive compensation. The benefits equal those of health insurance plans of current federal employees. Members of Congress will also be required to have a similar policy. The law limits subsidies to Medicare Advantage companies and requires them to pay benefits equal to those of the basic Medicare plan.
How to Pay for It
In spite of many false claims, the tax increase affects only 10 percent of the population. People with annual incomes of more than $200,000 (joint filers $250,000) will have an added tax of 3.9 percent only on their investment income. An increase of 0.9 percent will be added to the Medicare Payroll Tax.
There is a 40 percent tax on “Cadillac” Health care policies. These cost more than $27,500 a year (family) with extraordinary benefits for a few people.
The fine for those who do not purchase health insurance is 1 percent of their federal income tax. The minimum is $95 in 2013 increasing to $695 per adult in 2016. The fine is levied and collected by the Internal Revenue Service. If not paid, there will be no arrest or other legal action. Unpaid fines will be deducted from future income tax refunds.
Exempted from this requirement or any fine are those who do not pay income tax, religions who oppose health insurance, Indian tribes, anyone in prison, undocumented immigrants and anyone who cannot obtain health insurance for les than 8 percent of their annual income.
Where The Law Needs Help
The law will add $475 billion to health insurance companies due to the requirement for all to buy health insurance. It does not control Health Insurance Companies future increases in premiums or in co-pays. 32 million people will gain new healthcare from the law, but 23 million will still be without health care in 2020.
This law is only a beginning, but it is a significant one. There has been no realistic alternative offered by those who favor repeal, and there is not likely to be one. We should scrap the current “misinformation contest” and concentrate on modifying this law to achieve a comprehensive high quality healthcare system for all the people of the United States.