An Obamacare primer


It seems the majority of Americans are highly confused about the ACA, otherwise commonly known as “Obamacare.” And who can blame them? With so much misinformation, political rhetoric and flat out lies being brandished about from state senators to the guy on the street corner, it’s hard to know who or what to believe. Even if you go online and attempt to educate yourself from various sources, it still leaves you with a headache. So, just to add to your pain, here’s my take.

First — there’s no such thing as “Obamacare.” Yes, believe it or not, it doesn’t even exist. If you go into your local insurance agent and ask for it, you’ll get blank stares — well, not quite. They know what you really meant to say. Health insurance in the U.S. is still controlled by private (not the government) companies, for example Blue Cross of Montana. There was no government takeover of the health care industry; in fact, if anything there was a government assisted expansion of the private insurance companies. Yes, they got more clients or customers due to “Obamacare.” 

Obamacare is an instant tax subsidy, given to your private insurance company when you choose one of their plans offered on the marketplace. The amount of subsidy is determined when you apply for Obamacare on the “dreaded” website. It basically all boils down to your tax return. The government looks at your tax return, specifically your gross adjusted income, and then using the poverty threshold as a baseline, calculates the amount of your subsidy. Now, you never see that money — as if by magic it goes straight to the private insurance company whose plan you choose. That’s it. Well, not quite. Depending on what plan you choose, bronze or silver, you will have some out-of-pocket copays or expenses, just like pre-Obamacare, and of course your now more affordable monthly insurance payment.

According to most studies, approximately 12 percent of Americans were uninsured. In Montana it’s sadly a lot higher, closer to 21 percent (17 percent post-Obamacare.) These are the individuals most likely to be eligible for subsidies under Obamacare. This group mainly includes self-employed individuals and employees not receiving health benefits from their employer. The chronically poor are covered by Medicaid, with Medicare covering retired individuals.

In order to receive any Obamacare subsidy you are required to annually submit your tax returns and earn at least above the federal poverty level — approximately $23,000 for a family of four. In plain speak, you’ll have to be working and filing your taxes in order to be eligible. Subsidies decrease on a sliding scale as your income increases, ceasing at approximately $94,000, again for a family of four. The average household income in Montana is around $44,000, which means the majority of individuals and families are eligible for substantial subsidies under Obamacare, whether you vote Republican or Democrat.

You may ask, quite genuinely, why do we need another government program that costs taxpayers more of their hard-earned cash?

Well, the answer is not short but it is vitally important to understand and absorb. Prior to Obamacare, if you weren’t receiving health insurance from your employer (fortunately almost 50 percent of Americans do) you were buying it out on the open market and overall it was very expensive, so expensive that families making $45,000 could easily spend 30-40 percent of their income on health insurance, in other words, it wasn’t affordable, hence the 12 percent uninsured.

Despite what you hear from many politicians about private sector solutions rather than government ones, the private sector couldn’t provide insurance plans that working class Americans could afford. The reason is complicated but it’s primarily due to a host of “for-profits” cost drivers that make up the industry: hospitals, drug companies, medical device manufactures, etc. If there’s no profit in a product, you can hardly expect private industry to produce it, so that’s where the government steps in or, in this case, Obamacare.

As far as increasing your taxes, the only income tax increase in the law is applied to individuals making income over $200,000, which I’m confident excludes the majority of people reading this letter.

But why does the government have to step in — can’t these individuals just go without insurance or find some other alternative?

Well, that can be difficult if you’re dying of cancer or about to give birth. Uninsured individuals still used the services, but the costs had to be paid, by existing premium paying individuals, the state and hospitals. What was occurring was a downward spiral with disastrous results for many Americans. Even now health care costs account for more bankruptcies than any other factor in the U.S. When you strip away all the political rhetoric and study the problem, you start to understand how difficult it was and is to solve.

The cost of Obamacare is not cheap, but I argue its benefits are greater in the long run. Americans are easily distracted by disingenuous politicians out to gain power at any cost, but this is not a partisan issue, it’s a social problem that hurts Republicans as much as Democrats. When compared to how much this country spends on corporate welfare, tax breaks to the wealthy or amassing more military might, one might see affording fellow hard-working Americans the security of health care coverage as a bargain. One thing for sure, you’ll feel a whole lot better about having a little compassion in your life.

Mark Bolton