Since starting my research on health care and the Affordable Care Act, also know as the ACA, I have been inundated with countless opinions from the media, literature, and personal interaction, mostly weighing in on whether the ACA is simply good or bad for the United States and its citizens. Because the ACA is a complicated law and a polarizing political topic, many misconceptions have arisen and persisted in the public sphere. A student at AIER’s career development seminar asked me “After researching the ACA, would you sign up for Obamacare?” Instead of breaking it down and explaining exactly what the ACA entails, I simply acknowledged that it is a loaded topic, and if I did not have health insurance I would buy it in 2014.
Here is what I should have said–
The ACA is a law, not a health insurance plan. It is a law that regulates the insurance industry, which affects everyone who purchases health insurance to different degrees. It mandates that Americans have health insurance and that certain businesses offer it. One does not sign up for “Obamacare” or the Affordable Care Act. One purchases a health insurance plan that will be regulated within the framework of the ACA legislation.
The extent to which I am affected by the ACA depends on my current source of coverage, or lack thereof. If I get health insurance through my employer, in most cases, there will not be a discernible change to my health policy and my world will carry on uninterrupted in 2014 and beyond. If I get health insurance through a public program such as Medicaid or Medicare, almost nothing changes for me. If, however, I buy insurance in the individual market or I don’t have health insurance, I will see important changes.
There are many special cases, exemptions, and specific mandates/provisions that the ACA has created, making the law obscure and, more importantly, hard to predict. It’s impossible to accurately estimate how aggregate health care costs in America will change. It is also impossible to predict how many people will sign up for coverage through the exchanges and how different states will handle the implementation process.
Until implementation is complete and premiums are clearly identified for all insurance providers and enrollees and their plans, we cannot make a precise prediction of how the ACA will affect the healthcare landscape or the American consumer.
What we can do is provide our readers with data and information that will help identify where Americans are, and where they will likely end up as a result of the legislation. Based on ACA provisions and mandates, we can also give consumers a sense of how premiums may change. The numbers below are taken directly from AIER’s study, How the Affordable Care Act Affects Your Health Insurance Costs.
Using 2012 Census data and the HHS Medical Expenditure Panel Survey we were able to estimate where Americans access health care coverage. Eighty-five percent of the U.S., 267 million people, had health insurance in 2012, while 47 million were uninsured. Of this total, we estimated that that about 230 million people will see “little to no noticeable change in premiums” and about 50 million will see a significant increase in premiums. Conversely, about 30 million people will see reduced or low premiums.
We cannot estimate what uninsured people paid for health care before the ACA, because they did not pay premiums and only incurred out-of-pocket expenses. Therefore we are judging the relative cost of premiums across the uninsured population. For example, previously uninsured Americans now eligible for Medicaid (13 million) will not pay premiums, but they may incur nominal out-of-pocket expenses; therefore we categorize them in the 30 million with reduced or low premiums. Of the uninsured with incomes too high for Medicaid or federal subsidies, we put them into the group of 50 million with significant increases in premiums.
In addition to our estimates, our report presents a detailed guide on how the ACA will affect each type of insurance plan. It also offers analysis on health care distribution in the United States, eligibility for subsidies, Medicaid, and the impact of the ACA on premiums for the total population.