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Why the Next Phase of Obamacare is So Tricky

How has Obamacare affected you? Here's the basics of the changes that took effect back in 2014 for group and medicare plans.
Wednesday, 29 May 2013

obamacare_trickyAfter the November 2012 election, much of the partisan bickering about repealing Obamacare was silenced. Winning reelection to a second term all but ensured the continuation of the Affordable Care Act, but that didn't mean opponents are giving up the fight. Since its passage three years ago, the new healthcare law has undergone exhaustive criticism, media scrutiny, and a lengthy review by the Supreme Court. But despite the overall political victory, the battle is far from over. With the heart of the reform scheduled to take effect in 2014, the most contentious days for Obamacare may lie ahead.

The law will be an unwelcome intrusion on Americans' pocketbooks and its "grand implementation" may entail quite a few setbacks and challenges. According to a recent article in the Washington Post, "Obamacare's tricky next phase," Democrats are worried about the political fallout of rolling out such a complex new law, but Republicans are hoping to ride the inevitable tide of glitches to electoral success in 2014 and 2016.

Why is the next phase so pivotal?

For starters, most of the people affected by Obamacare have very little knowledge of the law's implications. According to a recent poll from the Kaiser Family Foundation, 20 percent believe that the Supreme Court or Congress has killed the law; a startling statistic that points to an uninformed electorate. Nonetheless, it will be a rude awakening on Jan. 1, 2014 when these same people wake up to find they are now required to purchase health insurance from a state-run exchange.

One reassurance, which we have heard from President Obama in countless campaign speeches, is that nothing will change for the 85 to 90 percent of Americans who already have insurance. But that's not quite accurate. Many people who are already insured will see their premiums increase quite dramatically. On a more positive note, the 10 percent of Americans who are part of the individual insurance market, as well as countless uninsured, will be able to shop for their policy at new health-care marketplaces known as "exchanges."

Too many "wild cards" to project success

Generally speaking, the law provides more benefits for the elderly and the sick, which also means that some of the younger and healthier citizens might be asked to pay more, particularly if the law's price control mechanisms don't operate as well as anticipated. Many of the calculated cost savings projected by proponents of the law are based on educated guesses, not reality. The number of people who will sign up is still not clear, yet so much has already been invested in setting up the health-care exchanges. The massive integration of private insurance company systems with Medicaid, state-run exchanges and federal web sites is difficult enough, but then there are the Republican-led states that refuse to cooperate in the law's implementation.

How will Obamacare impact the job market?

During last year's presidential election it was common to hear Mitt Romney's campaign lament the job-killing regulations of Obamacare, and how it could turn our recovering economy back in time. One reason for this is the fact that businesses with 50 or more full-time employees – or the equivalent in part time workers – will now have to pay a penalty for each employee that is not offered health insurance. While some of these companies have already determined that paying the fines will be cheaper than offering insurance, they may have trouble retaining good employees after the law becomes effective. Many will cut back on hiring, with the goal of keeping the total number of employees under 50, which could impact job growth and thereby curb the flow of tax revenue.

Casting further doubt about the law's viability can be attributed to the Supreme Court ruling. In the opinion written by Chief Justice John G. Roberts, Jr., states may decline to expand their Medicaid programs. Many states have already opted out of this key component of Obamacare, even though it meant turning down huge federal subsidies and leaving millions of low-income Americans without health-care coverage.

The Washington Post article contends that even the strongest supporters of Obamacare will admit that there might be some more bumps in the road ahead, but these problems should not be swept under the rug. One thing that would be helpful is for both sides to remember the inclusive goal of the Affordable Care Act: "ensuring that as few Americans as possible go without health care."

Photo Courtesy of arztsamui / FreeDigitalPhotos.net

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