The real reason Obamacare scares people
Despite the uproar over the individual mandate, the requirement would affect only a tiny portion of the population.
Sometimes the weatherman predicts a big storm that never materializes.
Politicians do the same thing, and right now many of them are warning that President Obama's 2010 healthcare reform law is about to come slamming into the nation like a once-a-century hurricane. Republican presidential front-runner Mitt Romney calls the law "an unfolding disaster for the American economy." His fellow candidate Rick Santorum routinely tells audiences that Obamacare "is the beginning of the end of freedom in America." Board up the windows. Hurry to the basement.
At the eye of this gathering storm is the "individual mandate," a key part of the law that will require most Americans to buy a minimum level of health insurance by 2014, or ask the feds for an exemption. Those in violation will have to pay a penalty fee that could be as high as the annual premium on a basic insurance plan. The mandate, which some people consider highly intrusive, generated court challenges almost as soon as Obama signed the law, with the Supreme Court now due to decide whether it's constitutional. (Oral arguments are scheduled for Monday morning.) If not, the whole reform scheme could unravel.
The landmark legislation, formally known as the Patient Protection and Affordable Care Act, is a complex monstrosity that's hard to understand, and except for a few provisions, it hasn't even gone into effect yet. So it's not surprising that many Americans fear the worst from a federal bureaucracy they don't trust. But healthcare experts who do understand the individual mandate find less to worry about than the politicians predicting disaster. If they're right, the nation might even survive.
The nonpartisan Congressional Budget Office, for example, predicts that 80 percent of the 272 million Americans subject to the individual mandate requirement will have some form of health insurance in 2014, when the law goes into effect. So no government thugs will be hassling them about failing to comply. Another 48 million or so are automatically covered by Medicare, so nothing would change for them, either. Out of roughly 322 million Americans in 2014, that would leave about 54 million out of compliance with the individual mandate.
Many of those people would wriggle out from the requirement, however. The Kaiser Family Foundation estimates that 40 percent of the uninsured would qualify for an exemption from the individual mandate, for a variety of reasons. Their income could be too low, for one thing, or the cost of insurance could exceed 8 percent of their income, or they could qualify on religious or hardship grounds. That would reduce the pool of mandate violators to about 32 million Americans.
Many of those people would qualify for subsidies set up under the law, which are meant to encourage people to buy insurance and help them pay for it. Some of them, no doubt, would do what the law says, and buy health insurance. So the number of Americans truly subject to penalties for violating the mandate would be less than 10 percent of the population--perhaps far less. Kaiser notes that in Massachusetts, which enacted a statewide law similar to Obamacare in 2006, about 70 percent of the people without insurance qualify for an exemption, and only 1 percent of the population pays a fine for going without coverage. And there's been little uproar about lost freedoms or a wrecked economy.
Changes are always more intimidating when they're poorly understood, however, and that is certainly one reason that Obamacare is so controversial and highly divisive. Polls show that Americans are about evenly split on their view of the law, with many Republicans strongly opposed to it and many Democrats strongly in favor. At the same time, only about one third of Americans say they feel they understand the law--and their self-assessments may be overly generous.
Complexity, therefore, may be the real reason Obamacare spooks people. For starters, the law could end up remaking the whole healthcare system—which accounts for about one sixth of the U.S. economy—in ways nobody can predict. The U.S. healthcare system was a mess before Obamacare, with soaring costs and millions of families that couldn't afford care. But that doesn't mean that shaking things up will automatically improve it. Changing things merely for the sake of change often makes things worse, and people are right to be skeptical.
The new rules will also force millions of Americans to navigate one more government bureaucracy, even if they want to do the right thing. People without insurance who want to apply for either an exemption or a subsidy would have to determine where they reside on a kind of income-insurance matrix that measures the relative affordability of insurance, indexed for family size, regional cost of living, and other variables that will change every year. Maybe the government will devise a snazzy website or iPad app that simply requires users to punch in a few handy figures, then generates a set of step-by-step instructions that can be carried out in half an hour. But anybody who's tangled with the healthcare bureaucracy or a government agency is justified to say, "I'll believe it when I see it."
Meanwhile, in the four-year time vacuum between the passage of the law and the date it goes into effect, we've been left to ponder a mystifying set of new rules from a government that seems disinclined to do us any favors. Santorum's rant about endangered freedoms has gotten a surprising degree of traction, but maybe it shouldn't be that surprising. These days, the government ought to first prove its worth and effectiveness and only then ask citizens to take a leap of faith and accept more complexity. It's hard to believe we need to make the system even more confusing in order to simplify it.
More from US News
- Why Rick Santorum needs big government
- How to cash in on the economic recovery
- Cartoon Gallery: US health care
I don't have insurance, company doen"t offer it. I had my right kidney out in Sept. , cancer. I don't knoe total on bills they keep coming because of follow ups. I can't afford to buy insurance outside, I owe to much. Live with older mother, so what happens to me?
Those people are covered by medicaid
Which under this law expands under the power of the federal government by how much was it again?
They work you part time so they do not have to give you any benefits
So I am to believe these people working part time, likely for low wages, will be able to afford their government mandated health insurance?
Those people are covered by medicaid, the ones the AHA covers are those that work hard and but their employer doesn't offer health care. Those are facts, this law is about America and Americans and those that oppose it are probably just caught up in fox facts and do not know the truth.
Has anybody on this list given a thought to the fact that companies are doing away with medical insurance at work
For people without valuable skills yes. That's nothing new.
Do you think that those families getting 4carts of free goceries with 10kids is all of a sudden going to start paying for insurance? no its those same people who everyone complains about that will be exempt, so we still lose. It just means that there will be more of us working people supporting the entitlement minded minorities, why do you think so many libs support it because nothing changes for them, they still get it for free, and if they are paying for it its from the increased wellfare money that comes from our taxes. Think about that for a minute!!!1
So when you go and vote Obama into office again, and the Dems increase the tax base for us regular folk to 45% not to mention the extra your putting out to support the poor wellfare leaches don't B*&ch about it, take it like a man.
i could not disagree with you more. having lived in europe for close to 6 yrs and having friends there, i can say they are NOT happy with the medical care they get. i am not sure where you get your info other than tv.
it is great to pay the same amount for a liver transplant as an ear infection...of course one must live to receive the transplant.
ChickenMic and the rest of the idiots posting on here ... I'm in the wrong blog. I need to go back to Politico ... there you have people of intelligence.
Quoting my statement about being self-employed and working hard for every penny. You took that very innocent statement to insult me by saying WE SUCK AT WHAT WE DO or whatever stupid remark you made.
You're probably jealous that you're not smart enough or have enough 'cojones' to go at it alone! You're an IDIOT posessed by ENVY and strike at any thing and anyone!
This is my first and last time on this 'non-think tank'. BYE SUCKERS!!!!!!!!!!!!!!!!!!!!!
Prime minister of Canada coming down to Chicago for open heart surgery a couple years ago.
Maybe the Prime Minister of Canada was not so well liked up there?
Copyright © 2014 Microsoft. All rights reserved.
Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.
Breaking up big banks is an untested solution to the too big to fail problem that attempts to isolate and dismantle large, troubled institutions while protecting the rest of the economy.
VIDEO ON MSN MONEY
[BRIEFING.COM] Equity indices closed out the month of August on a modestly higher note. The Russell 2000 (+0.6%) and Nasdaq Composite (+0.5%) finished ahead of the S&P 500 (+0.3%), which extended its August gain to 3.8%. Blue chips lagged with the Dow Jones Industrial Average (+0.1%) spending the bulk of the session in the red.
The final week of August represented one of the quietest stretches for the stock market so far this year. The first four sessions of the week produced the ... More
More Market News
|There’s a problem getting this information right now. Please try again later.|
MUST-SEE ON MSN
- Video: Easy DIY smoked meats at home
A charcuterie master shares his process for cold-smoking meat at home.
- Jetpacks about to go mainstream
- Weird things covered by home insurance
- Bing: 70 percent of adults report 'digital eye strain'