Positives and Negatives of Obamacare

On June 28, 2012, the US Supreme Court approved the Affordable Care Act, otherwise known as Obamacare. Some will benefit from the act, while others will either have to pay for health insurance of pay higher taxes. The relative benefit or detriment to a person will be dependent upon one’s station in life.

Positives

Obamacare ends the practice of insurance companies discriminating against people with preexisting conditions by refusing coverage or charging exorbitant rates for coverage. Children are now permitted to remain on their parents’ insurance until the age of 26. While this may be considered an encouragement to laziness by some, it allows young adults some flexibility to take jobs that may not provide insurance.

In addition to these benefits, the new health care act requires that at least 80% of insurance premiums must go to actual health care, rather than administrative costs and executive bonuses. Therefore, more of people’s health care dollars will go to what they are supposed to go toward. Any premium increases of more than 10% must be justified to government overseers. This could prevent extreme profiteering by insurance companies.

Insurance companies will now be required to pay for regular checkups, which will hopefully catch major medical issues before they become too expensive. It is hoped that this will help drive down costs. Finally, insurance companies will not be allowed to drop customers when they get ill. Unfortunately, the dropping of sick customers has happened, and this law attempts to remedy this problem.

Negatives

The growth of government oversight is considered a negative by some depending upon ideological outlook. Those who are libertarian-leaning may find it problematic that the government is now dictating that people purchase insurance or pay a tax in lieu of insurance coverage. Those who are not libertarians will view this as a positive because it ends the practice of free-riders or those who get health care at the emergency room and then pay nothing. Free-riders actually drive up the cost of health care for everyone but the free-riders.

The Affordable Care Act should prove a windfall to insurance companies as many people who were not previously on their rolls sign up for coverage. Those who demonize the insurance industry will not be happy with this.

Obamacare will also cost more to healthy young people who would have otherwise gambled that they would not need insurance.

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