Obamacare Affordable Care Act- Works, Subsidy, Pros, and Cons

ACA or Obamacare is the Patient Protection and Affordable Care Act. Most people think it only affects health insurance, but it has changed the way America delivers healthcare as a whole. The term “Obamacare” was first coined by critics of the former president’s efforts to reform health care, but the name stuck. The ACA has made significant changes to the way many people are able to access healthcare. 

As a result, those with the highest health expenses sometimes had to go without insurance or settle for a policy that did not cover their condition. Because they could not visit the doctor regularly, they often ended up in hospital emergency rooms, unable to contribute to their treatment expenses.

How Obamacare Works

The ACA’s primary goal was to slow the rising cost of health care by taking steps to make health insurance more available and more affordable to those who need it most. The act also required everyone to carry health insurance or pay a tax penalty, but that provision expired in 2019. The ACA aims to make health insurance more affordable for the lowest income earners by subsidizing the cost. 

Medicaid was extended to people who earn up to 138% of the federal poverty level, but as of 2021, 12 states have chosen not to expand Medicaid, limiting access for their residents. The states mostly located in the south are:

  • Alabama
  • Florida
  • Georgia
  • Kansas
  • Mississippi
  • North Carolina
  • South Carolina
  • South Dakota
  • Tennessee
  • Texas
  • Wisconsin
  • Wyoming 3

The poverty level usually increases every year to keep up with inflation. People who earn too much for Medicaid receive a tax credit if their income is less than 400% of the poverty level. The 4 credit is applied monthly instead of the annual tax exemption. They also pay lower co-pays and deductibles.

Obamacare 2022
Name of the lawObamacare
Started byBarack Obama
Started date2010
Started forPeople of America
Official websitewww.healthcare.gov

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How Much Are Obamacare Taxes

 Even though the mandate no longer applies, there are some taxes related to Obamacare:

  • If you earn more than $200,000 per year: Taxes increased for individuals earning more than $200,000 per year or more than $250,000 for married couples, certain healthcare providers, and other healthcare businesses. 
  • If you are a business owner: If you have 50 or more employees, you must provide insurance to at least 95% of full-time employees or pay a penalty.

What does Obamacare cover

Under the ACA, insurance plans must allow parents to include their children in their plans by age 26 and provide 10 essential services:

  • Preventive and wellness visits, including chronic disease management
  • Maternity and newborn care
  • Mental and behavioral health treatment
  • Services and equipment to help people with injuries, disabilities or chronic conditions
  • Lab test
  • Pediatric care
  • Prescription drugs
  • Outpatient care
  • Emergency room services
  • Admitted to hospital

Costs and Subsidies of Obamacare

When you enroll in a health insurance plan, you usually pay a monthly premium to maintain that plan. Obamacare includes subsidies to help low-income individuals cover the cost of their plans.

  • On March 11, 2021, President Biden Signed the Rescue Planning Act (ARPA) into law. The act increased the subsidies previously that included in Obamacare law.
  • So, millions more Americans Could qualify for federal aid with the cost of their health care plans. Under ARPA,
  • People who are within 100% to 150% of the federal poverty level (FPL) may qualify for zero-premium Silver plans while people between 150% and 400% poverty line Can receive higher subsidies overall. 
  • First Americans to make over 400% of FPL Were not eligible for any assistance. 
  • However, the ARPA premium has been restricted to 8.5 percent of the income of those falling in this income group.
  • ARPA will remain in effect in 2022, ensuring that Americans can still pay premiums for their insurance plans.
  • To pay in 2021 can receive federal aid.

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Affordable Care Act Advantages

Professionals of ACA

  • There were many aspects to the implementation of the Affordable Care Act. For example:
  • Health Insurance Covered More Americans
  • Within the first five years of taking the ACA, more than 16 million Americans received health insurance coverage.

Health Insurance Gets Cheaper

  • Although insurance coverage was not free under the ACA, insurance companies were required to contribute at least 80% of insurance premiums on medical care and improvements for Americans, which ultimately made health insurance more affordable in low-income families.

Prescription drugs become cheaper

  • Historically, many senior citizens were unable to buy their medicines due to high prices. Under Obamacare, prescription drugs became significantly more affordable, allowing Medicare beneficiaries to save nearly $27 billion on prescription drugs under the ACA in 2017.

Pre-existing health conditions were eliminated as a factor that denied health coverage

  • Previously, people who were diagnosed with diseases such as cancer had previously experienced difficulty obtaining health insurance because many insurance companies did not cover treatment for specific conditions they had prior to registering for Medicare. With the ACA, Americans can no longer be denied coverage because of such circumstances.

Here are the Affordable Care Act Disadvantages

The need for health insurance companies to provide additional coverage has raised the cost of insurance, including their insurance premium, for some people. Those who prefer very little insurance are forced to pay more for better coverage. 

Impact on small businesses

Most of the concerns expressed by critics involve small businesses. The ACA can provide incentives for businesses to keep their workforce artificially low, as only businesses with 50 or more employees are required to provide health insurance for their employees. This can affect how many people are employed by small businesses full time.

limited options: Fourteen states have also refused to expand Medicaid programs, leading to a reduction in coverage in those states. Especially soon after the ACA went into effect, Americans could not always keep their current doctors. After the ACA was first passed, it was difficult for some Americans to find insurance in the marketplace. There were also fewer insurers offering plans because of concerns about whether insurance companies could make money from offering plans. While still a concern, most Americans can now find a health insurance plan in their area.

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Healthcare is still expensive: Finally, while the ACA has allowed more Americans to have health insurance, the underlying cost of medical care has not decreased. Even uninsured Americans often have trouble paying medical expenses, and medical debt is involved in 40% of all bankruptcies in the US.

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