Healthcare reform was a consistent theme during Barack Obama’s first term and part of his reelection platform. Obamacare is the nickname afforded to the program enacted in 2010 as a response to rising health care costs, and the growing number of individuals without insurance. The initial goal of the plan was to drive down the cost of health insurance, so it becomes affordable for everyone. Obamacare forces individuals at every income level to purchase insurance, and makes it available either though an employer or via the state. While the plan is a mixed bag, there are some clear drawbacks to this federal health care law.
Goodbye to Employer-Sponsored Health Care
With the reelection of the president, companies are already coming forward with plans to handle the burden brought on by Obamacare. The new law accesses a penalty to businesses with 49 or more workers who fail to provide government-approved insurance. This is a good news/bad news situation for employees.
- Large companies may see the wisdom in dropping health insurance benefits entirely. For some businesses, the penalty will cost less than the insurance under Obamacare. This leaves employees who had effective insurance buying their own private plan.
- Small businesses may strive to keep their numbers under the limit to beat the system. Dropping the number of employees or hours per worker allows them to avoid the assessment and the insurance expense. This means fewer jobs and a higher unemployment rate.
The good news is some businesses will follow the intention of the program, and provide health insurance to employees who previously had no benefits.
Play or Pay
Shared responsibility is a key feature of Obamacare. Individuals that fail to get insurance will have to pay a penalty. Currently, living without insurance only costs money if the person gets sick. Under the new health care reform, any individual who fails to purpose insurance may end up paying close to $700 dollars a year as a tax penalty. Even with tax breaks for poverty level incomes, the insurance may be too much for some to handle. They will end up paying more in taxes and still not have health insurance.
Over 30 million people currently buy their own private health insurance, according to Kimberly Amadeo with About.com. In order to be affordable, they may have high deductibles and fewer covered services. Many of these low-cost programs are not going to pass the Obamacare muster leaving those individuals without any insurance or paying more for it.
Bounce Back Effect
Obamacare accesses a fee to pharmaceutical companies in order to close the “donut hole” in the Medicare Part D drug plan. The over $84 billion dollars these companies must pay in the next 10 years is likely to drive up the cost of prescription drugs. This effort to help people on Medicare save money on prescriptions is going to bounce back on the consumers with higher pricing for medication.
The goal of Obamacare was to lower health care coverage so it becomes affordable for everyone. Obama wanted to remove the excuse for not having insurance by lowering the cost, but the plan may backfire and actually raise premiums. With more insured people, there will be an increase in preventative health care. This is another good news/bad news scenario for the Obama administration. Wellness care will reduce the number of chronically ill individuals, but the increase in spending for testing will drive up premiums.
The rising cost of medical care has reached a critical stage in the United States. A 2011 study by the Kaiser Family Foundation shows that family health insurance premiums increased 9 percent in 2011. This rising trend has made insurance all be unaffordable for many people even with the cost-of-living adjustment in wages. There is little debate that reform was a necessary step in the economic recovery process. Many critics, however, believe that Obamacare does more harm than good. Time will tell whether the federal health care law turns out to be a redeeming feature or a financial disaster for the American consumer.
Author of this article is Michael Bratton, PR Director and Marketing Manager of BCRC. You can check out his other writings at bestcreditrepaircompanys.com.Share on Facebook