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The Pros and Cons of Health Care Reform (ACA)

No More Denials, Government Aide and Potentially Higher Costs

The goal of Health Care Reform was to enable all Americans and legal residents to attain health insurance coverage. “Obamacare” will be most helpful for those with low income and individuals who have pre-existing health conditions.

No More Denials for Pre-existing Conditions

Under the Affordable Care Act, as of January 1, 2014, no longer will health insurance providers be able to deny individuals for pre-existing health conditions. People who previously were unable to obtain medical insurance due to their medical history will be most helped by Healthcare Reform as eligibility will no longer be affected by someone’s health status. 

Low Income Individuals Get Affordable Coverage

Medicaid will be expanded to cover more people in the lowest income brackets. People with lower income will qualify for subsidies from the government which will cover up to 100% of their monthly premiums. Subsidies are determined based on annual income and number of dependents in the family. 

Higher Income Individuals and Young People Will Pay More

Health Care Reform promises coverage for all, but increased affordability for all is not guaranteed. The addition of those with pre-existing conditions to the pool of covered members will cause premiums to increase. Those considered affluent based on national standards will not qualify for government subsidies and will have to pay extra as premiums rise. The standards for income levels are set nationally, so individuals from states like California with higher average incomes will have fewer people qualifying for government subsidies.

Also, young adults are likely to be adversely impacted. The Affordable Care Act requires that premiums for those in their 60’s be no more than three times the amount of those in their 20’s. This is not expected to decrease premiums for those in their 60’s but rather to increase premiums for those who are younger. However, those in their 20’s may be able to purchase a qualified major medical plan and save money. This major medical plan would not be subject to the same essential benefits requirements as the other Health Care Reform plans, which would allow carriers to offer these plans at lower rates. Young people in their 20’s will be the only ones allowed to enroll in these plans, they will still be considered to have met the mandate, and they will be able to avoid the penalty.

Taxes are Going Up

The burden of implementation of the Affordable Care Act will fall on both the federal government and state governments. Taxes are expected to go up at both levels in order to cover the additional expenses implementing Health Care Reform.
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