Affordable Care Act Pros and Cons

One of the key policy points of the 2016 US Presidential election was the Affordable Care Act. Often referred to as “Obamacare,” Republicans have since promised a “repeal and replace” mechanism to get rid of this healthcare law. For many people, the Affordable Care Act was one of the first opportunities they ever had to be able to obtain health insurance. For others, the rising prices of policies, combined with the individual mandate, made it virtually impossible to afford their insurance.

There are certainly several Affordable Care Act pros and cons that must be considered by all Americans during the Trump Administration and beyond. Here are a few of the most important key points to look at.

Benefits of the ACA:

Pre-existing conditions coverage
Subsidized health insurance
Health Insurance Benefits for Employees of Small Businesses
Essential health benefits
No lifetime or annual limits
Kids can stay on a parent’s plan longer
(Unintended) Consequences since the ACA was implemented:

Some full-time employees lost their jobs or had hours reduced.1
Insurance companies cancelled non-compliant plans rather than update them.2
Major medical health insurance is still unavailable to many3 + the uninsured rate is climbing again.4

What Are the Pros of the Affordable Care Act?

The introduction of subsidies

Subsidies make purchasing health insurance less expensive for those who qualify. Also, the implementation of the 80/20 rule means 80 percent of your premium dollars is spent on healthcare instead of administrative costs.

Preventive Care is Free
Every health insurance plans provide 10 essential health benefits. Some of these are free preventive care and wellness visits. Besides, the Affordable Care Act eliminates copay, deductibles and coinsurance.

No Room for Surprise Cancellations or Pre-Existing Denials
With the Affordable Care Act, no insurance company can cancel your plan simply because you a mistake during application. Besides, they cannot deny you coverage for a pre-existing condition.

Small Business Does Not Have to Offer Health Insurance
If you are an employer with fewer than 50 FTE’s (see this worksheet on calculating FTEs), there is no requirement for you to offer health insurance – the “employer mandate” does not apply to you.

This is a big pro for small businesses, who most often find that alternatives to group health insurance are a better solution.

What Are the Cons of the Affordable Care Act?

Marketplace uncertainty is raising costs
Health insurance companies are canceling individual plans and hiking premium rates due to the unstable marketplace. Many counties have only one insurance option because of insurance cancelations, decreasing competition, and increasing costs.

Health care professionals’ shortage

The National Monitor predicted that the PPACA’s implementation, which is associated with the aging population of the nation, may lead into the shortage of about 52, 000 physicians for primary care by 2025. It may leave millions of the US citizens with no access to health care.

Narrow Networks
Some insurers provide shrinking networks in a bid to cut down costs. Customers now patronize fewer providers that have wide network.

Private Underwriting?
Yes, that’s how the Affordable Care Act works – via private underwriting. Last year there were two providers in Indiana, and this year there will be five health insurance providers on the marketplace. In short, your coverage is still available through a private company but being required (and promoted) by state and Federal governments.

If you have questions about ObamaCare and how it affects your taxes, contact the professionals at Baker Wealth Management. Receiving a tax premium or not having the required coverage can impact your taxes; other aspects of your tax return may also be impacted by ObamaCare. We strongly recommend that you don’t leave your taxes to chance with a software program. Our Evansville area tax experts are happy to assist you with filing your taxes.