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Unless you have been living in the wilderness for the past five years, chances are you’ve heard the word “Obamacare.” You may be wondering what everybody is talking about. Is America now a socialist nation? Does President Obama get to pick my doctor? Is the economy going to implode?
The answers to these questions are no, no and probably not. Let’s go through a rundown of the law — how it has been implemented, why it’s such a big issue and how it will affect people going forward.
So what’s Obamacare for, anyway?
The Affordable Care Act (ACA), commonly referred to as “Obamacare,” is a law seeking to a) lower the overall costs of health care, making sure that all (or at least most) Americans have health insurance, and b) raise the standards of insurance policies in our country.
How exactly does it do that?
The most basic aspect of the law is that it requires everyone to have health insurance under the “individual mandate.” Those who do not have insurance get charged a penalty on their taxes, unless their family income lies below the threshold to even file taxes, or if paying for insurance would cost them more than 8 percent of their total income.
Because most people cannot magically come up with the money to buy health insurance, the ACA requires states to set up health care “exchanges.” A health care exchange is an assortment of different health care companies’ insurance plans put in one place for citizens to choose from — people can look for the coverage they want on the Internet, over the phone or in person by talking to a “navigator,” or advisor. This system is expected to drive the costs of health care down, as businesses in the exchange will have to compete in order to sway customers.
To help people afford these plans, the government offers subsidies (providing citizens money through tax breaks) to those whose incomes range between 133 and 400 percent of the federal poverty level. This means that if you make anywhere from 3.3 to four times the poverty level, you’ll get help to pay for your insurance. The poverty level for any given person depends on its household size. This chart helps explain.
That doesn’t sound too evil to me. What’s the issue?
Well, the ACA is a giant political issue because many Republicans think that it is socialism (did you feel that cold chill?). Classy websites like UpYoursObama.com make that fact obvious.
The dictionary tells us that socialism is “a way of organizing a society in which major industries are owned and controlled by the government rather than by individual people and companies.” That means that for a health care law to be considered socialist, the government would actually have to take over health care companies and control them. But it doesn’t.
What the ACA does is require people to buy insurance from private (non-government) companies. That looks like capitalism if I ever saw it. It is possible that Republicans oppose more government social programs in general, but a social policy does not equal socialism.
If we look back to the 1930s, we will see that the passing of Social Security (which is a social welfare program) also put Republicans into a frenzy. But that wasn’t socialism either — it had nothing to do with government taking over businesses or property. Seventy years later, Social Security and all, America still isn’t a Soviet Paradise. Shocking, isn’t it?
But it isn’t exactly perfect, either.
There are some issues with the ACA. Part of its strategy to get everyone insured was to expand Medicaid coverage for all Americans under the age of 65 within 0 to 138 percent of the federal poverty line. Medicaid is a joint federal and state health care program for people with a low income who may otherwise not be able to afford insurance.
But Supreme Court decision on the Affordable Care Act in June 2012 declared that states do not have to agree to expand their coverage in order to receive federal Medicaid funding. Because to the ruling, as of right now, only 26 states are increasing coverage.
The Constitution’s Taxing and Spending Clause usually allows the federal government to require states to comply with its demands in order to receive federal funds. The Supreme Court has never made a judgement like this before.
But what the Court says, goes. And as certain states have opted out of the expansion, it has left a majority of the poorest Americans behind Many of the non-expansion states have Medicaid eligibility rates much lower than the federal 133 percent.
There were also issues with the rollout of the website. For example, in Florida, Texas, Arizona, Illinois and South Carolina, 104,000 applicants to Medicaid and the Children’s Health Insurance Program (CHIP) are still waiting to get enrolled. The websites for those public (governmental) health care programs are having trouble communicating with the main site, healthcare.gov. A total 36 states are using the website as their application portal.
So, what happens now?
Going forward, the ACA should greatly increase the number of people with quality health care. As of Jan. 24, around three million people have enrolled in private health insurance since the website’s launch last October — that’s on track to hit the Obama administration’s goal of signing up seven million by the March 31 deadline.
The Congressional Budget Office says that the law should save the country nearly $50 billion by 2021, and they have stood by that claim. We can only hope that more states decide to do the right thing and expand Medicaid coverage.
Optimism seems deserved here. What you shouldn’t do is freak out about Obamacare. You can sleep well knowing that your country will remain intact.
For more information on the law, click here.
Contact CU Independent Staff Writer Ellis Arnold at Ellis.Arnold@Colorado.edu.