Obama Care

Author

Institution

Introduction

The importance of healthcare services can never be underestimated as far as the health of the varied other sectors of the economy is concerned. This is especially considering that the productivity of individuals in any economy is essentially tied to their health as only healthy people would have the ability to produce. This comes as an explanation on exactly why individual governments have been paying intense attention on healthcare and making immense investments in the same (Murdock, 2012). Recent times have seen increased attention being given to the current government policy on healthcare, The Patient Protection and Affordable Care Act 2010. While there exists numerous debates as to the nature and effects of the PPACA, it is evident that the care comes with positive impacts on the American populace.

Commonly called the Obama Care, the PPACA or Affordable Care Act marks a turning point in the United States public health policy (Turner, 2011). It establishes the fundamental legal protections that have been absent in the history of healthcare policy via a series of revisions to and extensions of varied laws that together make the federal legal framework in the healthcare system of the United States (Murdock, 2012). This law would see the achievement of near universal guarantee for access to affordable coverage by health insurance right from birth to retirement (Turner, 2011). It is worth noting that the full implementation of the policy will be achieved on January 1st 2014 at which time it is expected that the law will result in cutting the number of uninsured Americans by over 50% or 31 million with 94% of the entire United States population being covered by health insurance, while the enrolment in Medicaid will be increased by 15 million beneficiaries (Turner, 2011). It also requires that insurance companies do not levy a higher amount of premiums on clients simply because they have pre-existing medical conditions (Pipes, 2010).

ObamaCare is funded via taxes collected, penalties, reformations, as well as the spending cuts in the healthcare industry. While the estimations pertaining to the cost of ObamaCare change on a regular basis, the net cost of the same is estimated to go up to about $1.1 trillion within the next 10 years. This underlines the incredible savings in the rise of healthcare expenditure by tens of billions every year while reducing the cost of healthcare for many Americans (Tate, 2012). The functionality of ObamaCare revolves around its requirement that every American will need to be under a healthcare insurance plan or pay a penalty. These plans may be bought via online marketplace, privately or even through one’s employer (Pipes, 2010). The average American would spend between $4,500 and $5,800 on a basic “bronze” level insurance plan without cost assistance (Tate, 2012). Despite the high cost of ObamaCare, the Congressional Budget Office estimates that more than $200 billion will be saved in the first ten years, while $1 trillion will be saved in the next 20 years (Turner, 2011). In fact, scholars note that the $1 trillion expenditure from 2010 to 2019 is more than offset by curbs on expenditure on Medicaid and Medicare, new taxes on high-cost plans, as well as tax shelters that are mostly used by wealthy families (Tate, 2013).

One of the key benefits of ObamaCare revolves around its effects on small businesses. It goes without saying that small businesses are a fundamental part of the economy providing employment opportunities and income to a wide range of American citizens. These businesses have been facing an immense barrier as far as the provision of healthcare is concerned. Studies show that among the small businesses offering coverage, about 40% spend over 10% of their payroll on healthcare (McCaughey, 2012). One of the key ways in which small businesses will benefit is through the tax credits. The provision of healthcare insurance to employees ensures that between 1.4 and 4 million businesses that have less than 25 employees with an average salary of $50,000 or less would be eligible to tax credits of a maximum of 35%, increasing to 50% after 1st January 2014 to be obtained for any two consecutive years (Hill, 2012). On the same note, insurance companies since 2011 are required to use a minimum of 80 cents of every dollar on medical care rather than administrative costs, otherwise they should refund the difference (Hill, 2012). This is extremely beneficial to small businesses as seen, for example, in California where an insurance company named UnitedHealth refunded about $3.5 million to 4400 companies in June 2012 alone (McCaughey, 2012). Part of the downside for businesses is that ObamaCare is seen as hindering the growth of small businesses due to its requirement that businesses that have 50 or more workers should pay healthcare insurance for their workers. This has seen some companies reduce the working hours of their employees or even reduce the number of fulltime employees (Tate, 2013). However, it is worth noting that the companies that have up to 100 employees would benefit from purchasing low-cost health insurance plans via employer-only exchanges established by every state (Morton, 2011). This would essentially lower the cost of smaller firms when their employees are added to a larger pool of insurance customers.

One of the most commonly peddled myths about ObamaCare is that it would result in an increase in taxes and premiums for healthcare insurance plans. However, nothing could be further from the truth as the policy is shown to incorporate the largest cut in middle class tax on health insurance in the history of the United States (Morton, 2011). The only individuals that would be affected would be 3% of businesses, as well as 140,000 of Americas wealthiest families that earn more than $250,000 with capital gains amounting to more than $250,000. As much as there may exist some taxes that affect Americans above 133% of poverty level, tax penalty levied against individuals that do not purchase insurance is the only one that has a direct impact (McCaughey, 2012).

In conclusion, ObamaCare marks one of the most fundamental turning points of the federal laws pertaining to healthcare. It aims at ensuring that about 94% of Americans have access to affordable healthcare. This is achieved through requiring that all citizens to have a health insurance over, whether privately purchased, bought through the employer or from shop pools. While there may be different opinions on the utility of ObamaCare, the policy would be beneficial to Americans. First, it would ensure that a reduction in healthcare costs incurred by Americans thanks to the increased health insurance coverage (Murdock, 2012). Second, it would be beneficial to small businesses as it comes with immense tax credits from which the companies can benefit. In addition, it comes with immense savings on the healthcare cost by the government, through curbs on expenditure on Medicaid and Medicare, new taxes on high-cost plans, as well as tax shelters that are mostly used by wealthy families. As much as the policy may cause companies to reduce their fulltime workers to eliminate the additional cost of healthcare, states still have the option of coming up with health insurance pools from which the small businesses would benefit.

References

McCaughey, B (2012). Decoding the Obama Health Law: What You Need to Know. New York: Paperless Publishing LLC

Murdock, K (2012). Affordable Care Act: ObamaCare. New York: GRIN Verlag

Morton, G.T (2011). Passing Obamacare. New York: Taylor, Levi, and Associates LLC

Hill, J. W (2012). Obamacare – What’s In It. New York: Primedia E-launch LLC

Tate, N. (2013). Obamacare survival guide. West Palm Beach, FL: Humanix Books

Tate, N. J. (2012). ObamaCare survival guide. West Palm Beach, FL: Humanix Books.

Turner, G.-M. (2011). Why Obamacare is wrong for America: How the new health care law drives up costs, puts government in charge of your decisions, and threatens your constitutional rights. New York: Broadside.

Pipes, S. (2010). The truth about Obamacare. Washington, DC: Regnery Pub.