Affordable Care Act Pros And Cons – What You Need To Know

Is the Affordable Care Act good for America? See how the Affordable Care Act Pros and Cons might affect you!

The Affordable Care Act (ACA) is the country’s law, but its implementation has been a significant issue thus far. It’s unclear if anybody requested a delay or if the Centers for Medicare & Medicaid Services (CMS) or the Department of Health and Human Services Secretary informed the White House that the launch date of October 1 was either unrealistic or highly unsafe. Everyone in the Obama administration appears to have adopted a “stay on message at all costs” mentality, which is unsurprising given that this is the standard in the federal government.

However, it is at the expense of poor public management. Internally, CMS employees knew the ACA’s implementation would be challenging. Honesty and openness are prioritized over optics in today’s Washington. It is difficult to determine how much this culture prevented the White House from acknowledging or even addressing the dangers or practical difficulties associated with the introduction of the website and the back-end data operation essential to actual enrollment in coverage.

The prime aim of this act was to provide affordable health insurance coverage for all Americans. The ACA was also designed to protect consumers from insurance company tactics that are majorly designed to drive up patient costs or restrict care. The Affordable Care Act (ACA), also known as Obamacare, was enacted in 2010.

The ACA has benefitted scores of Americans by providing them with insurance coverage. Many of these people were unemployed or had low-paying jobs that were not enough for them to sustain. Some were unable to work because of a disability or family obligations. Others couldn’t get decent health insurance because of a pre-existing medical condition, such as a chronic disease.

Despite the positive outcomes, the ACA has been mired in controversies. While conservatives raised objections to the tax increases and higher insurance premiums needed for Obamacare, others in the healthcare industry are critical of the additional workload and costs placed on medical providers. They also think it may have adverse effects on the quality of care. As a result, there are frequent calls for the ACA to be repealed or overhauled.

How the ACA Is Structured

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Initially, people were often confused if the Affordable Care Act and Obamacare were the same. They are! Obamacare is a derisive term for the ACA coined by opponents of the law.

The initial “three-legged stool” approach of the ACA allows insurers to make money still while providing more comprehensive insurance coverage. The three pillars of the ACA as initially designed are:

  • Regulate insurers so they offer a better range for more Americans, including those with pre-existing conditions
  • Require everyone — exceptionally healthy Americans — to purchase health insurance to spread out costs (this is known as the “individual mandate”)
  • Help low-income people afford health insurance through subsidies and a Medicaid expansion

The thought behind it is that if we require private health insurance companies to cover everyone, including Americans with pre-existing conditions, we also need healthy Americans to purchase health insurance so insurers do not face loss. Then, by helping low-income Americans with subsidies, more Americans can get health insurance.

However, in 2017, the Tax Cuts and Jobs Act ended the penalty for people not purchasing health insurance. The order was effective beginning in 2019. The full impact of this is still being determined, but the healthcare system has remained functional.

Need help with understanding the ACA?

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Your view regarding the pros and cons of the Patient Protection and Affordable Care Act might hinge on your political preferences and the part you believe the federal government should have in providing healthcare access for Americans.

Even over a decade after the ACA was passed, Americans largely approve or disapprove of it based on the party they support. According to a 2020 Gallup Survey, 84% of self-identified Democrats approve of the ACA, while 87% of self-identified Republicans disapprove of it.

No discussion of the pros and cons of Obamacare can make everyone agree on one viewpoint. One’s priorities are likely to play a significant role in how they weigh the benefits and drawbacks of the ACA. However, when asked about specific provisions, most Americans prefer certain aspects of the ACA over others.

The ACA is an unprecedented act of Congress. It would take entire books to thoroughly review all the impacts of the 900-page law, which has significantly affected America’s healthcare system.

If you have any doubts or questions about the ACA, we have compiled a list of the pros and cons of Obamacare that are sure to clarify all your queries.

Feel free to take a look!

Pros of the ACA

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1. Health insurance is available to a more significant segment of the population

Within the first five years of the ACA, More than 16 million Americans obtained health insurance coverage. Young adults make up a large percentage of these newly insured people.

2. Affordable for many people

Insurance companies are bound to spend at least 80 percent of insurance premiums on medical care and improvements. The ACA also aims to prevent insurers from making unreasonable rate increases. Though insurance coverage isn’t entirely free, people now have a more comprehensive range of coverage options.

3. Pre-existing health conditions are now also covered under the ACA

Before the ACA, a pre-existing condition made getting health insurance difficult for many people. Most insurance companies wouldn’t cover treatment for these conditions because the illness or injury occurred before their plans surrounded you. Under the ACA, you can’t be denied coverage because of a health problem before you insured yourself.

4. No more limits on care

Before the ACA, people with chronic health problems often ran out of insurance coverage as insurance companies set limits on the amount of money they would spend on an individual consumer. Insurance companies can no longer limit the scope they provide their customers.

5. More screenings being covered

The ACA covers many screenings and preventive services, usually with low copays or deductibles. The thought behind it is that you can avoid or delay significant health problems later with prevention. Healthier consumers lead to lower costs over time. Diabetes screening and early treatment may help prevent costly and debilitating treatment later.

“The ACA is going to help all Americans have higher quality and less costly healthcare in the decades to come,” says Dr. Christopher Lillis, an internist in Virginia and a member of Doctors for America.

6. Expanded and inclusive Medicaid and Medicare

In the states that have chosen to expand their program, Medicaid coverage now includes uninsured Americans under 138% of the federal poverty level. Many Americans living below the national poverty line can still obtain health insurance.

7. Dependents can stay under their parents’ plan longer

Your children can be insured under your health plan until they are 26.

8. Limits have been phased out

Limits on lifetime benefits have been completely banned, and annual limits have been phased out. However, this does not include grandfathered plans.

9. Cheaper prescription medications

The ACA committed to lowering the cost of prescription medications. Many people, especially older adults, struggle to pay for prescription drugs. Every year, more prescription and over-the-counter medications are covered under the ACA.

10. Subsidies provide financial support

Health insurance is less expensive for individuals who qualify to subside. Additionally, because of the 80/20 rule, 80% of your insurance money goes toward medical expenses rather than overhead.

Cons of the ACA

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1. Higher premiums for many

As insurance companies now provide a more comprehensive range of benefits and cover people with pre-existing conditions, this has caused premiums to rise for many people, especially those who already have health insurance.

2. Uninsured to be fined

The ACA aims for people to be insured year-round. Initially, you were bound to be fined if you were uninsured and didn’t obtain an exemption. Recent events have changed this fine. Some people find it intrusive for the government to require health insurance. ACA supporters maintain that not having insurance passes your healthcare costs to everyone else.

3. Taxes are being raised due to the ACA

Several new taxes, including taxes on medical devices and pharmaceutical sales, were passed into law to help pay for the ACA. Tariffs were also increased for people with high incomes. Funding also comes from savings in Medicare payments. The wealthy are helping to subsidize insurance for the poor. On the other hand, some economists predict that the ACA will help reduce the deficit in the long term and may positively impact the budget.

4. Enrollment day is still a pain

When the ACA website was first launched, technical issues made it difficult for people to enroll and led to delays and lower-than-expected sign-ups. Though eventually fixed, many consumers have found signing up for the right family or business coverage tricky. Also, in recent years, the enrollment period has been shortened to between November 1 and December 15. Many hospitals and public health agencies have set up programs to help guide consumers and business owners through the setup process. The ACA website also has sections explaining the procedures and available options.

5. Businesses are cutting employee hours to avoid covering employees

Businesses with 50 or more full-time employees must offer insurance or make payments to cover healthcare expenses for employees. By reducing hours, many companies have been able to get by the 30-hour-per-week definition of a full-time employee. Opponents of Obamacare opposed the ACA, saying that the legislation would destroy jobs. While the number of full-time jobs has increased in recent years, there are reports of businesses cutting hours from employee schedules.

6. Tax Penalties

While the federal penalty for the uninsured doesn’t exist, some states are enacting their health insurance mandates.

7. Shrinking networks

Many insurance companies made their provider networks smaller to cut costs while implementing ACA requirements. It left customers with fewer providers that are “in the network.”

8. Shopping for coverage can be complicated

Shopping for coverage can be complex, with limited enrollment periods, website difficulties, and more coverage options.

09. Loss of workplace health insurance programs

Instead of offering employer-sponsored insurance, some firms may find it more cost-effective to allow staff members to purchase their coverage through the exchanges.

Some of the Affordable Care Act’s Main Features

The ACA has provisions to increase insurance access, strengthen consumer protections, emphasize wellness and prevention, enhance quality and system performance, increase the size of the health workforce, and lower healthcare costs.

Increasing Insurance Access

The Affordable Care Act (ACA) mandates that employers provide health insurance to their employees and offers tax incentives to certain small firms that do so. It established state- or multistate-based insurance exchanges to assist people and small companies in purchasing insurance. The bill let young adults remain on their parent’s insurance policies until age 26 and increased Medicaid coverage for low-income people.

The individual mandate, a component of the Affordable Care Act (ACA) until 2017 and required all Americans to obtain health insurance, whether it came from an employer, the ACA, or another source, or pay tax penalties, was part of the law.

Boost consumer insurance safeguards.

The ACA limits yearly restrictions, bars lifetime financial limits on insurance coverage, and requires state rate reviews for insurance price hikes. It forbids insurance plans from canceling or rescinding coverage and denying coverage for kids with previous illnesses.

Wellness and Prevention

The National Prevention, Health Promotion, and Public Health Council addresses tobacco use, physical inactivity, and poor nutrition. The Prevention and Public Health Fund, established under the ACA, awards grants to states for prevention initiatives like disease screenings and vaccinations.

The ACA mandates that insurance plans cover immunizations, childhood immunizations, screenings for select people for illnesses like high blood pressure, high cholesterol, diabetes, and cancer, and public oral health awareness campaigns.

Enhance health quality while reducing costs.

The investments in health information technology were requested under the ACA. It covered recommendations for reducing medical mistakes, developing payment systems to boost productivity and outcomes, and enhancing provider care coordination.

The legislation mandates supervision of health insurance prices and practices to promote comparison shopping in insurance exchanges and promote competition and pricing transparency. It will reduce healthcare fraud and uncompensated treatment.

Payers’ Perspective,

Most health insurance providers know that if CMS successfully launches the website and data transfers, the original strategic justifications for entering the insurance exchange market remain true. Medicaid-covered employers are likewise interested in how enrollment changes and how quickly enrollment issues will be rectified. Payers’ strategy, business planning, and predictions are complicated by the first tragedy associated with the launch of the federal exchange.

Payers’ jobs are challenging since they need more information from the federal government and may need to modify some of their expectations and plans. The more considerable unknowns, such as how customers will respond to the new exchange plans, including their pricing and options, further aggravate this scenario. Health insurers who focus on the Medicaid market are logically in a stronger position under the ACA given the significant rise of participants, even though their business dynamics are intrinsically complicated and vary by state.

Hospitals and health systems are concerned as they face a double-edged sword of an unclear payer environment and significant payment reductions to help cover the cost of the ACA. Although a decline in the number of uninsured Americans will help reduce the cost of uncompensated care, it won’t usually make up for decreased payments from Medicare, Medicaid, and the new exchange plans, as well as a migration of patients from higher-paying private plans to lower-paying taxpayer-financed health plans. Insurance companies are aware their 2014-2015 budgets may need to be adjusted to cover more Medicaid patients and fewer members with commercial plan coverage or exchange-based coverage than anticipated.

Because the waivers would increase access to coverage, hospitals in states applying for Medicaid reform waivers—notably Wisconsin, Iowa, and Pennsylvania—are typically keen to see those be granted and implemented fast.

Manufacturers’ Perspective

How pharmaceutical, biotechnology, and medical device businesses see the effects of the ACA varies greatly. While some companies are pretty knowledgeable, others are only faintly aware of what it all implies. Because the impacts of the ACA are indirect and nonlinear, although enormous, it is more difficult for drug or device businesses to comprehend the possible consequences of the ACA on them than, for example, insurance corporations or big healthcare providers.

Indirect because of the economics, incentives, and coverage decision-making due to the ACA and market reforms. Nonliners because the new policy and market realms look chaotic, unexpected, or illogical in this period of unprecedented, rapid disturbance period, challenging the conventional judgment. These businesses face a challenging environment when making tactical, operational, or strategic decisions.

Implementation Lessons of the ACA,

The Obama Administration gravely underestimated the resistance from states and the sheer magnitude of the task. The administration’s slow, opaque decision-making process also hampered the state-run exchanges and made life in state Medicaid agencies a nightmare to be dreaded.

But the states, by experience and temperament, are generally more adaptable and problem-solving oriented than the federal government. States with their exchanges jumped in much earlier than CMS, making preliminary decisions, bringing on contractors, and pulling the pieces together as best they could.

Although unprecedented in scope and complexity, the ACA as legislation deferred most decisions to federal agencies, especially CMS and the Internal Revenue Service.

The law could have been better written in critical areas and thought out. Few rules are truly self-implementing, but virtually everything in the ACA, from a political, regulatory, or technical perspective, almost everything in the ACA requires countless decisions and an astonishing amount of work before it is implemented.

Did the ACA improve healthcare in the U.S.?

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The ACA has primarily functioned as designed. At its simplest, the issue is that more and better coverage costs more money. If you believe the federal government should help Americans get decent health insurance plans, you likely approve of the ACA.

However, the federal government should not play a role. In that case, the ACA meddles with the free market and raises taxes and premiums for people who could otherwise find health insurance independently.

Many of the issues discussed in this article are extensively debated. For example, those in favor of keeping the ACA or instituting a single-payer healthcare system argue that it lowers the overall cost of healthcare and ultimately saves taxpayers money. Others who are opposed say that it increases costs and is an unaffordable venture. The U.S. healthcare system is highly complicated, and this article does not take a stance on either side.

The ACA – A Giant Social Experiment

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The ACA is a giant social experiment with few precedents. It is impossible to predict what will happen next with the law’s implementation or how consumers and employers will respond in the post-ACA world.

It is easier to predict the behavior of health insurers and providers and the overall impact on them, but this is still complex. Americans and the US media have a short attention span. Change happens rapidly, and the law is so complex that only some people or organizations have the patience to understand even parts of the ACA. The enrollment numbers in the first three weeks of December will be critical to assessing how well the federal exchange is working, as well as the response of the public to the repaired website.

The number of new Medicaid enrollees will likely remain higher than those in the subsidized exchange plans in the first two years. We know this is the case for states with state-run exchanges, and Medicaid enrollment increases will be exceptionally high in the states with Medicaid expansion. Still, nationwide, there is every reason to believe that Medicaid enrollment will outpace subsidized exchange enrollment. In addition to a massive jump in enrollment through expansion eligibility to millions of low-income adults in half of the states, Medicaid rolls will increase in every condition from a streamlined eligibility and enrollment process mandated nationwide by the ACA.

Furthermore, Medicaid enrollment is year-round, not tied to an open enrollment period, and a more straightforward, no-cost decision-making process for consumers, unlike the enrollment process in the exchanges. Enrollment in subsidized exchange plans could outpace the rise in Medicaid rolls if and when more small and midsize employers drop their current healthcare coverage. Sign-ups during January through March 2014, the second half of the initial open enrollment period, will be essential to watch when outreach and marketing efforts are expected to restart.

Under the special enrollment rules, many consumers can sign up for exchange coverage after the open enrollment period, which ends on March 31, 2014, if they have a significant change in family or financial circumstances. However, that volume will not be as large or as important as the exchange sign-up during the open enrollment period or the continuous, always-open Medicaid enrollment.

But volume is not enough information to assess the ACA’s success. For that, we will need to know, for example, the impact on the uninsured rate, the age and the health risk characteristics of those enrolled, the benefit design choices, the number of people losing individual or employer-sponsored coverage, and the effect of Medicaid expansion and streamlined Medicaid eligibility.

The law is also a moving target due to a series of Obama Administration decisions to delay the enforcement of key ACA provisions for practical and political reasons.

Significant provisions of the ACA, including the employer mandate and small employer exchanges in most states, are delayed until 2015, the start of the open enrollment period for 2015 has been shifted until after the November 2014 elections, and conditions are encouraged to temporarily allow the short-term renewal of insurance policies outlawed by the ACA. CMS is proposing changes to how exchange plans are paid.

Overall, most people have yet to experience the effects, positive and negative, of the ACA. In terms of coverage and costs, the ACA creates a giant game of musical chairs, which has just begun. Every American will be affected by the ACA in some way.

The biggest winners are the uninsured, who are or will be newly covered through Medicaid or federally subsidized exchange coverage. Some of the losers, including people facing higher premiums, are starting to feel the pain, but the main disadvantages of the ACA are yet to be experienced. The law is all about improving equity through the use of a maze of redistributive mechanisms. It will take time before this plays out.

The short experience with the ACA can only shed light on issues that should have been addressed long ago but for which there was no interested audience.

How has Obamacare affected American Economics Positively and Negatively

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The Affordable Care Act, also known as Obamacare, has had a mixed effect on the American economy. While it has helped to increase the number of people with health insurance and access to medical care, it has also raised taxes and caused some companies to scale back their employee health benefits. Overall, economists believe that the positive effects of Obamacare have outweighed the negative ones.

What good is Obamacare?

Obamacare is good because it helps ensure people have health insurance and access to quality healthcare. It also helps to keep costs down for everyone. Obamacare is not perfect, but it is an ideal start.

Looking ahead

Individual consumers, companies, and insurers are all stuck in the center of two opposed parties working to maintain the healthcare system while simultaneously campaigning for its repeal—groups representing the healthcare system in place while campaigning for its abolition. Groups representing the healthcare business have the ACA without having made any concrete measures to deal with any potential repercussions.

Whether lawmakers abolish the current ACA provisions and postpone their implementation, repeal and replace them, or adjust them, the results will be altered laws, rules, and procedures in several different industries. These changes will impact millions of people with ACA-based health insurance policies, as well as insurance providers, hospitals, and even small businesses that depend on the rules and guidelines established by the Affordable Care Act.

John Otero

John Otero

John Otero is an industry practitioner with more than 15 years of experience in the insurance industry. He has held various senior management roles both in the insurance companies and insurance brokers during this span of time. He began his insurance career in 2004 as an office assistant at an agency in her hometown of Duluth, MN. He got licensed as a producer while working at that agency and progressed to serve as an office manager. Working in the agency is how he fell in love with the industry. He saw firsthand the good that insurance consumers experienced by having the proper protection. John has diverse experience in corporate & consumer insurance services, across a range of vocations. His specialties include Major Corporate risk management and insurance programs, and Financial Lines He has been instrumental in making his firm as one of the leading organizations in the country in generating sustainable rapid growth of the company while maintaining service excellence to clients.

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