Tuesday, October 12, 2010

The Affordable Care Act Explained

There has been a lot of concern over how the Affordable Care Act that was passed recently would affect us. There have been many rumors and misconceptions flying about so I thought that I would do a little research and try to respond to the concerns. You can also verify the facts by reading the bill yourself or by going to www.HealthCare.gov . This site is also the central data base that can be used to find insurance that fits your needs. You can shop for both public and private insurance on this site.
One of the many rumors out there is that you will be forced to buy insurance that you can’t afford, possibly bankrupting your family to get coverage, when in fact the Affordable Care Act will make insurance more affordable to everyone. There are tax credits and even hardship waivers for those who can’t afford to buy insurance. This ensures that everyone has access and can get the care they need. It also reduces what they call the “hidden tax.” That is the extra cost that people buying insurance coverage pay now to cover the cost of those without coverage. In our current system this is one of the issues that is driving the prices perpetually higher.
I have also heard it said many times that the new law will make businesses less competitive by raising costs, when in fact according to the independent CBO (Congressional Budget Office) the bill will lower premiums for the existing plans by about 4 percent for the smaller businesses and 3 percent for the larger ones. The bill will ultimately save about $3000 per person in health care costs.
Another myth is that the small business credits won’t do anything to provide relief for businesses. Again, this is wrong. Small businesses will receive $40 billion in new tax credits to help cover the costs of providing coverage to their employees. This credit is structured to support both the businesses that provide coverage now and the ones that decide to offer coverage in the future. This tax credit is substantial, amounting to 35 percent of the premiums that a business pays to provide coverage. This tax credit is effective immediately and as of 2014 will increase to 50 percent. There are about 4 million businesses that are eligible for this credit.
 I have also heard it said a lot that the health insurance bill is already increasing health insurance premiums. This is definitely not true! The insurance companies are using this as an opportunity and excuse to raise your premiums. It is just a ploy to continue to rake in profits and try to weaken support for the bill. The Wall Street Journal recently reported that many health insurance companies were using this bill as an excuse for premium increases that were already in the works long before the bill was passed. At least one insurance company had to issue a letter clarifying the reasons for the premium increase after the article was published.
It is a well know fact that insurance premiums have almost doubled since 2000 and this of course can be proven to have absolutely nothing to do with the legislation; unless of course you are a psychic and predicted that the bill would pass ahead of time (and maybe there are some out there). I think that Congress did its job and passed a comprehensive bill that protects individuals from for-profit business. Overall, people are scared of the changes that many of you wanted; that is understandable, but realize please that change can be a good thing. We still have three years to work the kinks out of this bill. There is no “perfect” health insurance solution, but I for one am pleased to see that we are finally making progress on this major issue. I rest at ease knowing that my kids will grow up healthier because we are in charge of our own health insurance, not the insurance companies. There are certain things that should not be for profit and I believe that our health is one of them.

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