If the ACA (Affordable Care Act) was successful, why are so many people paying so much? Is the ACA simply working as an income redistribution method? Many people have asked these questions because of the skyrocketing costs of “Obamacare” or ACA plans.
Then and Now
Health insurance was affordable not long ago. For example, just 10 years ago the average family paid about $400/month for basic full coverage health insurance. That included a $15 doctor office copay and a $2,000 family deductible. Insurance was optional and you could pick the type coverage you wanted. There were a variety of plans that you could change at any time. In addition, the cost of insurance was based on actuarial tables. Someone who ran statistics to calculate insurance risks and premiums.
These days, the cost for a family of four can be much higher, such as $1,600/month with an average $7,000 deductible, and doctors visits are the sole responsibility of the patient, going towards the deductible. Until recently, it was government mandated that you have an ACA plan or pay a tax; excuse me, a penalty. Additionally, everyone has to pay for the same coverage. Even for benefits that do not relate to them. Also, changing an ACA plan can only be done during the open enrollment period (November 1st through December 15th), unless you qualify for a special enrollment period (change in job, change residence, have a baby, etc).
The Purpose of the ACA
As someone who is new to Empower Brokerage and the insurance field, I was shocked when I learned about the changes the ACA made. I questioned their objective. Why change everything?
According to healthcare.gov, the ACA has three main goals:
- Provide more affordable insurance to a wider range of people by lowering the cost for consumers with income between 100 % and 400 % below the poverty level.
- Expand Medicaid for adults with low income.
- Provide delivery methods that help lower healthcare costs.
All of these goals sound good. But at what expense? If the idea was to create more affordable insurance, then why is middle-America suffering?
From what I can tell, it seems like the ACA is taking away from the free-market system, causing much higher costs, and subsidizing some people with other people’s monthly fees. I do think that it is important to look out for those in need, but I don’t think that redistribution is the right solution.
Maybe providing help to those in need, and leaving what works alone, is the key.
Nattaly, a fellow employee here at Empower Brokerage, explains the problem that she sees with the ACA, “Insurance is getting too expensive and families cannot even afford a basic premium.” Nattaly hits on what I see as the number one issue with the ACA, it’s making it impossible for families to afford health insurance. We don’t need subsidies. We need affordable insurance costs and accountability for charges.
Medicaid is a bridge to help those with lower incomes afford insurance and pay their medical bills. I feel that expanding this program could be a possible solution for everyone. It would still assist those who needed help with bills, but it wouldn’t force everyone to participate. We would have the choice to buy medical insurance based on our own needs.
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