President Barrack Obama is perhaps immortalized forever in American history with the passage of Obama Care or “Patient Protection and Affordable Care Act (PPACA)”, much like Bush Jr. , who is now famous for his legendary (perhaps insane) tax cut.
What is Obama Care?
I was recently wondering about it. Scanning through a lot of online material and videos later I somehow cracked Obama care. I am trying to bring my knowledge and judgement about this healthcare reform bill. I hop my ignorance and biased approach (if any) would be pointed out by informed readers.
being born in a country where 98% of population are not insured for health, it’s difficult to fathom a state rule which dictates that every citizen should be covered under health insurance. What is the rationale behind this dictum?
We now pay over $7,000 a year for our insurance coverage (with $3,800 out of pocket maximum), even after employer subsidy towards the premium. This is too much money for most, to pay on yearly basis. Why then health insurance should be made mandatory?
The answer lies below.
Recently our close friend had a baby boy who unfortunately had to be placed in NICU for more than a week (the baby is doing absolutely fine now). The cost that the hospital billed their insurance company is staggering $65,000 at the end of it. How many in this country (even though the richest country in the world) could have afford this bill without an insurance?
There’s something seriously wrong in America’s health care system. Obama care is trying to fix some of the flaws. Obama care is an attempt towards making health care affordable to public.
The crux of the law is to set up a health care exchange in every state, where individuals and small businesses can shop for health care policies. Sometimes with government subsidy.
The main constituents of Obama care that directly affects us
1. Every body should be insured or pay the penalty – Those who are not covered by employer sponsored health care plan should arrange for a coverage on their own, except those who have religious believes or living in extreme poverty.
2. Government will subsidize health insurance premiums for some – In case you live under federal poverty line, you will have to pay no more than 2% of your income towards insurance premium.
3. Insurer can’t discriminate people based on past illness - health insurance companies will no longer refuse to renew coverage unless you have committed fraud. They can’t simply drop your insurance or refuse to renew based on your prior year’s medical records. Health insurance providers, under Obama care, can’t have different premiums for people in same age group and living in same geographical place.
4. Your children will be covered till age of 26 – a 4 years more of coverage for them would ensure a longer time for paying off student debt while they will continue to enjoy parent’s insurance policy.
5. Free preventative care – Obama care (PPACA) requires health insurance providers to provide free of cost immunization and preventive care to insurers. No longer paying for flu shots or yearly medical checkup. There will be no co-payment or deductible.
6. Removal of life time maximum limit – If you have an illness for which your insurance provider has a life time maximum limit, there’s a good news for you. Obama care requires insurance providers to completely remove this clause from the policies.
7. Larger Small businesses (who are mostly against PPACA) have to contribute towards employee’s health insurance cost - Firms employing 50 or more people but not offering health insurance will also pay a shared responsibility requirement if the government has had to subsidize an employee’s health care.
Some of this would go in to effect very soon and the majority, including the mandatory coverage clause would come in to effect from 2014 onward.
How would a broke government pay subsidy for insurance premium? Main revenue sources are mentioned below.
- Increased medicare tax deduction from rich people (joint earning more than $250,000 a year).
- Increased fee for health insurance providers
- 40% excise tax on unusually high cost health plans (more than $27,000 a year for family coverage)
- Reduced limit for HSA contribution, thus reducing tax breaks.
- Increased fee for Drug manufacturers and importers
I am wondering why cigarette manufacturers are exempted from bearing the burden?
If I were running an insurance company, the first thing I would do is to increase the insurance premium to cover for the potential revenue losses as I would be paying more money to hospitals and doctors towards free preventative care, increased medical coverage and removal of life time maximum and other benefits Obama Care brings in for the people.
So, at the end it’s the poor us who have to bear the burden again.
We will pay more towards higher premium, costlier medicines and lesser tax breaks to fuel better health care coverage.
Actually this is how economies run. It’s our money that come back to us. You pay more money to save money when you would fall sick.
For me, I don’t think this law brings any significant change, unless I develop a serious illness which now has a life time maximum amount set. Every day we hear stories about medical condition related bankruptcy, this could never happen again in post life time maximum era.
People with existing chronic illness would get benefited. Many insurance companies refuse to provide coverage to them now. Refusal would no longer be legally allowed, once the states enact the law.
Our insurance does provide all preventative care for free, many are not that fortunate. They pay out of their pocket for yearly check up and immunization, etc. Obama Care solves this problem.
Obama care also is a ray of hope for people with cancer, infertility, mental disorder, joint dysfunction, etc. as post 2014 there will not be a lifetime maximum limit for these treatments. I have seen policies where total medical benefit were also subjected to lifetime maximum.
What do you think readers? Would Obama Care bring better health care solution? Are you seeing any benefit for yourself? Share your opinion freely by commenting below.
|SB is a husband and working as a software professional for a Fortune 100 corporation in Florida. Thanks for visiting the blog.
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