A national study published by the American Journal of Medicine reported that more than 60% of all bankruptcies in 2007 were medical bankruptcies. Additionally, the total health expenditure per capita is 50% greater in the United States than in Norway, the second-highest country among OECD (Organization for Economic Co-operation Development) countries, according to OECD.org.Passed in response to the excessive costs of insurance and the lack of quality in the healthcare industry, Obamacare is the most significant reform to the national healthcare system in almost 50 years. Starting on October 1, the Affordable Care Act (ACA) will assist millions of uninsured Americans in buying health insurance. The act stipulates that all Americans must have health insurance, private or government-regulated, by January 1 or pay a tax penalty. The ACA significantly increases federal regulation of health insurance providers and guarantees essential benefits, such as primary care, for Americans who buy approved health insurance. Insurance providers cannot reject anyone based on his or her medical history and must charge healthy and ill people the same rates for the same coverage.There is no doubt that Obamacare will allow more Americans access to healthcare services. The question is, how effective will Obamacare be?Opponents of Obamacare erroneously argue that Obamacare is “socialism” and will fail because it does not make financial sense for both Americans and the government. It is important to note that the national government does not control the healthcare system. The regulated marketplace in Obamacare allows Americans to choose from a variety of insurance systems that best fit their needs. In fact, because insurance providers cannot deny anyone, they have to offer competitive rates to attract customers, which is not “socialist” healthcare.
Many Americans will benefit from Obamacare because the government will provide financial assistance through subsidies to help them pay for healthcare coverage. The Commonwealth Fund Foundation reported that family health care premiums in 2011, on average, exceeded 20% of the median income. Because the ACA will reduce the cost of insurance to approximately 8-9.5% of income, many Americans will save money. In fact, according to the Kaiser Family Foundation, Obamacare will reduce the health care premium for the average college grad who earns an annual salary of $44,259 according to Forbes magazine from $466 per month to $250 per month. The addition of out-of-pocket caps on health care spending prevents Americans from overspending on medical bills and will definitely decrease the number of medical bankruptcies.
Although Obamacare will improve the healthcare system, many are still worried about its cost. The Congressional Budget Office estimated in 2012 that Obamacare will cost $1.1 trillion from 2012 to 2021. Despite the high costs, the ACA will decrease the budget deficit by $143 billion because the ACA adds taxes and reforms the health care industry. Data from the 2010 Census shows that two-thirds of Americans qualify for health insurance subsidies. Thus, heightened taxes should not be a problem for most Americans, because the savings from the subsidies will offset the increases in taxes. The top one-third of Americans will pay more taxes, but in return, they will have access to healthcare services that are more transparent and better quality.
Much of the money for Obamacare will come from monitoring healthcare providers. For example, the ACA will mitigate hospital overcharges, which amount to $10 billion per year according to a November 1986 issue of the “American Journal of Surgery”.
Just like any other healthcare system, Obamacare is not perfect. Although it has flaws and loopholes, it is a big step towards universal health coverage. Healthcare is a basic human right. There is no excuse for not providing affordable health insurance to all Americans. Giving Americans choices for proper health insurance and reducing healthcare costs can only benefit our nation.
By ANDREW HONG