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Obamacare: Myths and
Realities
Janet Hankin, Sociology
Allen Goodman, Economics
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Background
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The Affordable Care Act a.k.a. Obamacare:
What is it?
• A major goal of the Affordable Care Act is to put American consumers
back in charge of their health coverage and care.
• It puts in place comprehensive health insurance reforms that will hold
insurance companies more accountable, lower health care costs,
guarantee more health care choices, and enhance the quality of
health care for all Americans.
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How does it work?
• Expands Medicaid for states that want federal money
• Subsidies to help small businesses and individuals w/ modest income
to purchase private health insurance.
• New marketplaces to purchase insurance by employers and
individuals
• More level competitive environment
• Government will subsidize premiums for those 138%-400% of FPL
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Uninsured
• Insurance must now cover children regardless of their health problems
• Cannot refuse adults coverage because of preexisting conditions
• Now allows people under 26 to remain on parents’ health insurance
plans
• Insurers cannot charge sicker people more
• Premiums must be fair and must not discriminate by sex
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Incentives To Insure More Workers
• As of 2016, if employers have 50 or more employees, they must
provide coverage which meets minimum value and affordability
standards, or pay $2K per employee.
• Small employers get tax credits for providing coverage (< 25 workers).
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Essential Health Benefits – 1
•
•
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•
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Ambulatory patient services
Emergency services
Hospitalization
Maternity and newborn care
Mental health and substance use disorder services, including
behavioral health treatment
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Essential Health Benefits – 2
•
•
•
•
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Prescription drugs
Rehabilitative and habilitative services and devices (services and
devices that help people keep, learn, or improve skills and
functioning for daily living)
Laboratory services
Preventive and wellness services and chronic disease management
Pediatric services, including oral and vision care
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Other Changes
• Stress on prevention and avoiding disease
• Means earlier detection of illness when treatment costs less.
• No copayments or deductibles for immunizations, screening for many
illnesses from cancer to depression, checkups
• Expand pool of primary care doctors and nurses—cost less than
specialty care
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The ACA Will Kill Jobs
MYTH
• Fear that employers will switch to part time workers to avoid
provision of health insurance
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The ACA Will Kill Jobs
• Not clear
• Argument was premised that if a single
employer must raise wages, costs will
be too high, and they’ll lose money.
This is not the same if ALL employers
must raise wages. Similar to modern
minimum wage arguments.
• No evidence that there was a major
switch to part-time workers.
• Unemployment rate (August 2016) is
slightly below 5%
REALITY
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The ACA Will Not Improve Health Care
System
MYTH
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The ACA Will Not Improve Health Care
System
REALITY
• Sommers, et al. (2015), for 2012-2015 found a clear downward trend
among those reporting their health conditions as “fair or poor.”
Analyses of subsamples, e.g., by race/ethnicity and by states that
participated in Medicaid expansion vs. those that did not, revealed
broad gains following the initial enrollment period.
• Sommers, et al. (2016) determined that compared to Texas, Medicaid
expansions in Kentucky and Arkansas led to “… major improvements
in access to primary care and medications, affordability of care,
utilization of preventive services, care for chronic conditions, and selfreported quality of care and health.”
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The Number of Uninsured Will Not Decline
• Fear that Americans will not buy insurance
on the health care exchange,
healthcare.gov
MYTH
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The Number of Uninsured Will Not Decline
REALITY
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The Number of Uninsured Will Not Decline
REALITY
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States will not expand their Medicaid
MYTH
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States will not expand their Medicaid
REALITY
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2015 Percent Uninsured by State
LT 10 10+
12+
14+
16+
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2013, 2014, 2015 – Percentage Uninsured
LT 10 10+
12+
14+
16+
2014
2013
2015
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Access to Health Care under ACA Will Be
Difficult
• Insurer competition in the
marketplaces has led to the
proliferation of health plans that offer a
narrow, or limited, network of health
care providers at a lower price than
plans with broader networks.
• This has led to concerns over access to
care.
MYTH
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Access to Health Care under ACA Will Be
Difficult
REALITY
• More than half (54%) of people who were enrolled in
a marketplace plan for the first time or who had
changed plans said they had the option of choosing a
less expensive plan featuring fewer doctors or
hospitals. Of those, 41 percent selected the limited
network plan.
• Across all marketplace plans, more than threequarters (78%) of enrollees who either recently
enrolled or had changed plans reported being very or
somewhat satisfied with the doctors covered by their
insurance. Among these adults, 64 percent reported
their plans have some or all of the doctors they want.
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REALITY
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REALITY
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REALITY
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Costs Will Rise under ACA
MYTH
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Costs Will Rise under ACA
SOME
VALIDITY
• Yes, in two ways. Yes, there was a major increase in enrollment,
which grew faster than the economy. We have seen in the past that
enrollment increases lead to expenditure increases, and growth in the
NHE share.
• Yes, in the sense that some transitions to managed care increased
growth in costs. In a transition to managed care Medicaid, the net
insurance cost rises as Medicaid Health Maintenance Organizations
(HMOs) collect more in premiums than they pay out in benefits while
government administrative costs are largely unaffected.
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Costs Will Rise under ACA
ALSO
• Schoen (2016) argues that a number of ACA
reforms, particularly related to Medicare, have
likely contributed to the slowdown in health care
spending growth by tightening provider payment
rates and introducing incentives to reduce excess
costs.
• Among these are various provisons that reduced
payments to hospitals, other providers, and
private Medicare Advantage plans; and there are
several incentive programs designed to improve
quality and lower costs.
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High levels of public dissatisfaction with ACA
MYTH
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High levels of public dissatisfaction with ACA
REALITY
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High levels of public dissatisfaction with ACA
REALITY
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High levels of public dissatisfaction with ACA
REALITY
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Bottom ________________
• Generally a positive impact in terms of:
•
•
•
•
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Accessibility
Coverage
Satisfaction
Quality of Care
Employment Impacts
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Bottom ________________
• Not sure:
• Costs seem to be rising at least as much as might have been
expected.
• Some issues in terms of “adverse selection” – those who are
unhealthy seem to enroll (when they need care), and then drop
(when they’ve received the care). This is not a good thing in the
sense of insurance markets.
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