The Third Post - Financial Downsides

Today I continue to wonder to what extent will the Affordable Care Act benefit the American people financially? Last time I looked at benefits, both to insurance companies and those whose income is near the poverty level. I have since read how PPACA’s methods for providing health care are not the most cost effective for the majority of us.

According to Eugene Steuerle of the Urban Institute, those who participate in the new insurance exchanges will get substantially higher subsidies than most households that remain in employer-provided insurance. Nonsensical penalties exist to keep people in the less-subsidized employer provided insurance plans. Logistic problems abound regarding information sharing between employers, exchanges, Medicaid systems and the IRS. Steuerle claims that the new exchanges would enable a new tax system which would collect 9 or 10 cents from each dollar earned for most insured households. Steuerle suggests that instead of a new, hard to administer system, we need to change our current tax system to provide fewer subsidies to those with higher incomes.

            Reihan Salam of National Review articulates that a healthcare reform like the PPACA could be beneficial to the American people as a whole. He supports equalization of tax treatment of employer sponsored health insurance and insurance purchased by individuals through a universal tax credit. Salam cites Capretta and Thomas Miller’s 2010 recommendation in National Affairs when he backs generous federal funding for high-risk pools. Capretta and Thomas Miller conclude that meeting the needs of high-risk pools through increased federal funding would be possible at a much lower cost to the taxpayer than the affordable care act.

            These alternatives offered by Steuerle and the Millers counter the arguments for guaranteed coverage for preexisting conditions in extreme cases. For those who do not qualify for high-risk pools but still need extensive medical care, Obamacare is a superior option. These authors want to adapt current systems to cover specific groups of people, but the overarching goal of Obamacare is to cover everyone.

Sources:

Steuerle, Eugene. "Fixing the Nation's Four-Tranche Universal Health System." : Next Steps for Both Republicans and Democrats. Urban Institute, 2012. Web. 28 Oct. 2013.

Salam, Reihan. "On Framing the Affordable Care Act | National Review Online." National Review Online. National Review, 1 Oct. 2012. Web. 28 Oct. 2013.