Obamacare Primer: Who Wins or Loses if Law is Upheld, Repealed

The Affordable Care Act:
1. Expands healthcare coverage to 30 million uninsured Americans,
2. Requires many health insurance plans to cover prevention and wellness benefits with no co-pay or deductibles for 54 million Americans that have private insurance,
3. Eliminates the lifetime coverage limit for 105 million Americans already insured,
4. Gives 2.3 million elderly Medicare patients access to annual wellness checkups,
5. Provides prescription care “donut hole” coverage for 5.1 million seniors, and
6. Requires insurers to cover those with pre-existing conditions, including 17 million of the 74.9 million children ages 0-17 years old residing in the U.S., according to recent US Census figures.

Most people only know about three portions of the law that have already gone into effect: 1.  The part that closes the donut hole for prescription drug coverage;
2. The provision that has enabled 2.5 million kids up to the age of 26 to piggy back off their parents’ insurance; and,
3. The part which stops health insurers form denying coverage for children and other people with preexisting conditions.

Little is known about the other parts of the law but it may be helpful to go through a primer on who may benefit and who will lose if the law is upheld or struck down.

WHO BENEFITS FROM THE LAW:

Infants, Babies, Children and Teens: Under the Act, insurers cannot charge a co-pay for preventiative health services including immunizations, pediatrician visits, vision and hearing screenings, counseling to address childhood obesity, flu shots and other preventative health services for infants, children and adolescents.  Also, low-income families whose children qualify for the Children’s Health Insurance Program, administered through States, can’t be cut until 2019 even if a state has a budget shortfall. The CHIP provides for doctor visits, emergency care, hospital care, vaccinations, prescription drugs, vision, hearing and dental care for babies, children and teenagers.

Nineteen to 26-year olds: About 24 million young people who have not been fortunate enough to secure a job that offers them health insurance will be able to remain on their parents’ health insurance.

Babies, children, and teens with pre-existing medical conditions: Kids who contracted a condition for six months before their parents tried to get medical coverage cannot be denied care based on that condition.

Families that already have insurance: New health plans will have to cover, without charge, a co-pay for adult preventative services such as annual check ups, breast and colon cancer screenings, screenings for vitamin deficiencies during pregnancy, high cholesterol, and high blood pressure. Smoking cessation programs are also covered.

Medicare patients: Free Annual Wellness visits:  Beginning this year, those on Medicare will be able to get an annual checkup. As is known, it is during annual visits that many diseases and conditions are diagnosed. If caught early, treatment can extend a patient’s life and prevent an early death.

Additional options of doctors and surgeons: Primary Care doctors and general surgeons who service Medicare patients will get a 10% bonus payment which could perhaps encourage more doctors offices to take Medicare patients. In turn, Medicare patients would get the benefit of a place to go to get a second and third opinion if they wish. Further, those who may have had to travel farther to get to a doctor that does accept Medicare patients may be able to get access to one closer to his or her home.

Prescription drug rebate: Some Medicare drug beneficiaries who have spent $2700 on drugs can fall into what is called a “doughnut hole” — meaning their drug plan no longer pays a subsidized portion of their drugs.  That subsidy makes prescription drugs affordable for many seniors.  Those enrollees must pay the full costs of their prescriptions until they have spent $6,154 on their own out-of-pocket. After that time, they get their coverage returned and eventually start paying a small co-pay again. Those in that “doughnut hole” will get a $250 check to help pay for their prescriptions, which can get costly.  Nearly 4 million seniors who would benefit are beginning to receive these payments.

Small businesses: Small businesses are given a tax credit to offset costs of having to get health insurance for employees.  This provides more incentive for companies to offer health care to more families.  Approximately 6 million small businesses would qualify for the tax credit.

Early Retirees: Grandparents who may want to retire between the ages of 55 and 64 because of their age, illness or an interest in spending more time with their families would have the option of having their employers continue to cover them as part of a temporary reinsurance program. With most ailments and conditions on setting during advanced years, it would be a risk to go without insurance until Medicaid kicks in. 

Uninsured adults with pre-existing conditions: Those suffering from chronic or depilating diseases or illnesses and cannot get insurance will be able to get heath care through a new program that starts this year. This coverage could help them live longer lives and give them more time to spend with their spouses and children rather than them having to live without getting treatment and risk deteriorating rapidly and eventually dying an early or untimely death.

Hospitals: Beginning in 2012, Centers for Medicare and Medicaid Services, which oversee the government programs, begin tracking hospital readmission rates and will put in place financial incentives to reduce preventable readmissions. The idea is to reward institutions for doing their best to treat people and keep them healthy versus providing the basic and minimal care only to have those same patients readmitted for the same or related causes. 

Taxpayers: Beginning in 2013, the threshold for claiming medical expenses on itemized tax returns is raised to 10 percent from 7.5 percent of income though it would remain at 7.5 percent for the elderly through 2016.

WHO MAY WANT REPEAL

Pharmaceutical companies: Beginning in 2014, the law imposes an annual fee on them based on their share of the drug market. The fee does not apply to those small companies that have sales of $5 million or less. The delayed start date of the fee was part of the a negotiated compromise between the industry and lawmakers before the bill passed.

Indoor tanning services:  Indoor tanning salons will be assessed a 10% tax on their use of ultraviolet lamps. The provision was included to discourage the skin-cancer causing service while seeking to raise $2.7 billion dollars from the industry by 2019.

Health Insurers: Starting last year, health insurers were banned from;

1.      excluding children from coverage because of pre-existing conditions;

2.      dropping people from coverage when they get sick;

3.      instituting lifetime limits; and

4.      dropping dependents from plans after they turn 19 or finish college.

Insurance companies will begin paying a fee based on their share of the insurance industry in 2014.

Employers: Those companies that may not want to provide insurance to early retirees through the temporary reinsurance programs may prefer a repeal.  Also, employers with 50 or more works who do not offer coverage face a fine of $2,000 for each employee if any worker receives subsidized insurance on the exchange. The first 30 employees are counted for the fine.

Medical Device Industry: Beginning in 2013, a 2.9% excise tax will be imposed on the sale of medical devices though anything generally purchased at the retail level by the public is excluded from the tax. There doesn’t appear to be anything stopping that industry from passing on that tax to consumers via a higher price for the devices, however. This provision won’t go into effect for a couple of years which, in of itself, was also a compromise before the bill passed into law in 2009.

Those who do not want insurance: Beginning in 2014, all American adults will be required to obtain health insurance coverage or pay a fine of $325  if they don’t. Arguably, this provision is one of the most controversial and one which may indeed be undone, one way or another.  The government did provide for a healthcare tax credit to help those with incomes up to 400 percent of the poverty level purchase coverage.

In a nutshell, while the law is in no way perfect and may have provisions that may not be ideal, the most objectable provisions by the health industry doesn’t get phased in this year anyway.  That delay was part of the compromise they agreed to.  The bottom line is that more families, babies, infants and children would benefit from it, including those who have insurance, as well as those who do not.

A do-over may not be worth it.  It shouldn’t be the first priority at a time when the most important thing on most American’s minds is jobs and the economy.

Part of this article was published previously at The Politics of Raising Children blog that Jeneba authors at The Washington Times Communities last January 2011.