Elements of the Affordable Care Act
Date posted: November 8, 2013
The Affordable Care Act, some call it Obamacare, is being rolled out. There are strong feelings, both pro and con, about this program. N.C. State University economist Mike Walden gives a broad view of what the legislation is designed to do.
“This has sparked intense debate, pro and con discussions, about this very, very big very, very important federal legislation. And, of course, we don’t want to get into picking sides here. But I do want to give a perspective on what this act is trying to do, and I think there are two broad goals:
“First of all, it is designed to try to have more people qualify for and get health insurance. And secondly, it is trying to moderate the increase in health care costs over time.
“So to increase access what is happening in many states is an expansion of Medicaid — that is, the number of people who have been qualified for Medicaid. Also, for other people, there’s going to be a system of subsidies, based on your incomes. It’s going to be a slide and scale of income to help people afford to purchase private health insurance policies. This is what all the exchanges that have been in the news recently are about.
“Now to moderate health-care costs, there are incentives in the program for preventative care, plus there will be a government body — this has been very controversial — that over the years will recommend cost-saving procedures and policies.
“Now, of course, there are going to be issues with anything this large. One issue: The subsidies are … actually going to encourage more expensive policies because people perhaps don’t face the full cost of those policies. Secondly, policies that are now required to contain certain provisions, obviously, those are going to cost more.
“There are going to be a series of new taxes that will fund this new legislation. And then there’s also concern about the cost panel that I mentioned, although Congress can override their recommendations.”
Category: Economic Perspective