5 Things You’ve Heard About Obamacare That Just Aren’t True

By: Amanda Fox

The Health Care Reform Act, Affordable Care Act, more popularly known as “Obamacare” (Whatever name you know it by) is possibly one of the most widely misunderstood pieces of legislation that has fallen under intense public scrutiny since the early days of the Social Security Act. Hey, just look how many different names people commonly know it by? Certainly there have been controversial bills between the two, but much like the early days of Social Security,the Health Care Reform Act is widely misunderstood. Also, people are fiercely passionate about the bill. They either fiercely support it or are fiercely against it with very little in between.

Much of the misunderstanding can be chalked up to two major factors. One is that the jargon in the actual bill itself can be confusing and is easily misinterpreted. The other, is that much of what has been misinterpreted was turned into soundbites that were repeated until people began accepting them as fact with little or no investigation into them on their own. What we will do today is present five of the most misinterpreted points in the Health Care Reform Act and break down the fact and fiction. We won’t pull any punches either – you’ll get the good, questionable and bad.

Obama Signing The Health Care Reform Act

The biggest misconception is what it really is. While we refer to this by many names, and again in the news as Obamacare, this is actually two separate programs that are related somewhat like siblings. The Patient Protection and Affordable Care Act is the portion that is designed to reduce the number of uninsured persons and health care costs as a whole. The other sibling is the educational arm of the parent bill which is the Health Care and Education Reconciliation act. In short – two sibling programs under one parent bill.

Insurance costs, contrary to what has been reported on each side of the political divide are not going to go up or down based on this bill alone. There is $1.2 trillion earmarked for the this plan (Give or take $100m or so which is attached as discretionary funds in the fine print) which is only to cover the actual costs associated to provided health care. This has nothing to do with the costs associated to infrastructure which still has to come from somewhere. Where that money comes from is anyone’s guess. Some analysts say the insured will spend slightly more, some say the same as the insurance pool has been widened which hedges high risk persons more effectively. No one is saying less and standing by it, however. Either way, it’s still pure speculation what will happen to rates as no one really knows what will happen until the plan is fully implemented.

Abortion… We can’t escape discussing this. There is a wide held belief that people who disagree with abortion will be forced to financially support them by being covered under this health care program. The fact is, it is written directly into the legislation that there is an absolute mandate that a minimum of one policy be offered in every region, which specifically excludes coverage for abortion. Anyone that wants to avoid paying premiums into a plan that covers abortion only needs to opt for the plan without coverage. In any case, the coverage would use beneficiary premiums to pay for abortions – not tax dollars as is the misconception. This is a matter of which plan you choose to pay premiums into.

Similarly, birth control is the other hot button issue related to reproductive rights because people scream “I don’t want to put for your contraception!” Concerning birth control, in March of 2012, regulations which ensure coverage for employees of enterprises controlled by religious institutions that self-insure were implemented. Regulations which require coverage for students at institutions controlled by religious organizations which purchase insurance were also set in place. Should any self-insure, they can opt out. Should an entity still not want to pay into the pool, they do not have to pay for the coverage through their own plans. Instead, their employees will be able to obtain  contraception directly from the insurer without a co-pay and a business owner can maintain a clean conscience in accordance to their beliefs. So again, no, Obamacare is not forcing anyone to pay for anyone else’ birth control. Again, this is covered under premiums – not tax dollars.

The grandaddy of all misconceptions is that it is going to cost so much to cover employees, businesses will have no option but cut employee hours, cut the workforce or raise prices to the point of being unreasonable. If you’ve followed the Papa John’s CEO and his complaining about the cost of healthcare necessitating around a .12 increase per pizza (which prompted him to threaten a cut in employee hours, hiring and a .50 increase per pizza) you have some idea what this is all about.

For companies that are not offering health coverage to employees or that are doing so on a very limited scope, yes, it is going to cost some money to cover the costs and in all actuality, even though some companies may come out ahead of the game financially to pay the penalty for failing to provide coverage, most will offer coverage because it is good business. Benefits, such as health care coverage, attract and retain better employees.

The reality is, most major corporations already offer their employees health coverage. For some whose coverage falls short of the legislated requirements, the cost to upgrade is something few have publicly cited being concerned about. The large corporations that have made a stink tend to be those that have high employee turnover that offer no coverage or limited coverage to key personnel only.

Here are some of the facts from actually industry insiders with a vested interest in keeping this all straight.

Think Progress reports: “A new study by the Urban Institute — modeling the effect of Obamacare’s various provisions on employer behavior had the law been in effect in 2012 — found the health care reform law would’ve only impose a modest increase of 2.2 percent on total employer spending. More strikingly, for small businesses of 100 employees or less, total spending would’ve actually decreased by 1.4 percent.”

And lest we not forget employers won’t be “saddled” as badly as some cry because they forget this tidbit that Bloomberg News cites: “. . . eligible employers that provide health coverage will again get a tax credit for up to 35 percent of their contribution toward employee insurance. The credit is calculated based on average wages and number of employees; it goes up to 50 percent for tax year 2014.” So here we see, costs will go up for employers, but so too will the deduction rate.

But what does it mean for me – and you and the guy next door? The regular people that may very well find ourselves on one of these plans? Here’s the breakdown from Forbes that might help clarify it from the standpoint of the user rather than the provider.

Flat Fee: (Tier 1 under $110,000 annual household income)

Calendar year 2014: $95 annually

2015: $325 annually

2016 and beyond: $695 annually or capped at $2,085 per family for families with incomes under $110,000 annually.

Percentage of Income: (Tier 2 over $110,000 of annual household income)

Calendar year 2014: 1.0% of annual income

2015: 2.0% of annual income

2016 and beyond: 2.5% of annual income

More insured youth – how can this be a bad thing?

There are many other misconceptions with the health care plan,  but these are a few of the top issues that are misunderstood. We encourage you to ask questions and investigate on your own. Don’t look for answers from the right or left, go to business publications and insurance companies them self to get answers. Read the Health Care Act itself and draw your own conclusions. It is not a plan without fault – there are questions and concerns that need to be more clearly addressed by the government. It is, for many, possibly the only chance they have to get coverage – even if they are currently employed since this is not just a “free ride” program. We cannot say our health care system is a model for the world as it is, but it could be. This may not be the final answer to ultimate improvement, but it may get us closer.

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