The Top Five Myths About the Affordable Care Act

Originally published at The 2×2 Project, October 2012

It’s almost impossible not to be confused by the Affordable Care Act, even though it’s one of the most significant laws to be passed in the last fifty years.

If the content slicing and dicing wasn’t enough, there were the disingenuous characterizations of the law from its opponents, and the flagrant mistakes that some of our leading news organizations made in reporting the Supreme Court’s decision to uphold the law in June. A few misunderstandings that are particularly egregious keep arising in public health discussions about the ACA.

Let’s clear them up, shall we?

Myth #1: The ACA is a Sign of Impending Socialism

It’s true that the ACA is the biggest social welfare legislation since Medicare. It’s also true that socialized medicine has existed here for decades, with little opposition and even much support.

The crux of the socialist argument seems to hover around the issue of government control over an industry that would supposedly better function under a free market framework and limited restrictions. But it should be obvious that this is the framework we’ve operated under for decades, and that is has left millions without care. And true socialized medicine presumes that Americans are contributing to a government-administered healthcare delivery system. But that’s just not the case with the ACA.

Myth #2: The Government is Taxing You for Healthcare

Taxes have long been the poster child for government control. But the way this supposed “taxing” functions in the context of the ACA is tricky. Normally taxes are levied against all citizens, gleaned from earnings or tagged on to spending—like an income tax or sales tax you learned about in Econ 101.

While some justices used Congress’s taxing authority to render the law constitutional, the penalty fee—the “tax” in question—only applies to those who choose not to buy insurance, so outside of legal circles, calling it a “tax” seems a bit disingenuous to the true character if the penalty.

What’s more, whereas taxes are intended to pay for public goods that the government provides to everyone, the penalty under the individual mandate is intended to charge those individuals who don’t choose to buy insurance for the cost that society incurs as a result of their decisions—emergency room fees should they get hurt, for example.

Myth #3: It’s Going to Plunge Us Into More Debt and Cost Us Trillions

The claim that the entire bill will increase the deficit isn’t quite accurate. In fact, the Congressional Budget Office projects the ACA will save us money and cut the deficit by about a trillion dollars during its second decade of implementation.

In fact, as explained above, the ACA prevents average Americans from paying the healthcare costs of others: As is, those of us with insurance pay for care for the uninsured when they show up to the ER at our local hospitals requiring care—premiums go up, procedures are more costly, and physicians have to charge more. The ACA helps end that by requiring people buy insurance—or pay that penalty.

Myth #4: The Government is Eliminating My Choices

Opponents argue that under the ACA, the government will decide who lives and dies, and where Americans need to buy insurance. In fact, choice is built into the ACA with health insurance exchanges. These allow people to choose the providers and plans they want, something it turns out most people support and many states have begun to implement. By giving you the ability to select your physician, the ACA reallocates to you the power previously held by insurance companies to tell you which doctors you could see.

Additionally, with the expansion—and elimination in some cases— of spending limits, you’re no longer forced to choose what essential medical tests or care to pursue based on arbitrarily low spending limits imposed by insurers. Previously, these annual limits were in the tens of thousands. Now, the annual limit can be no less than $2 million, and lifetime limits are illegal for nearly all plans. This means you’re far less likely to run out of coverage if you develop a costly illness. It also means you don’t have to limit options if you and your physician choose additional forms of care or treatment that may improve your condition.

Myth #5: Obama is Raiding Medicare

In the last decade, payments from Medicare to private plans have increased dramatically—in fact, figures show that Medicare actually overpaid by 14-20 percent, and the costs of this overpayment fell on our seniors via increased premiums. Worse, there’s no evidence that these higher payouts to insurance companies improved care, probably because insurance companies—not seniors or providers—controlled allocation of that money.

The ACA has made Medicare more efficient by cutting some of that overpayment. This saves Medicare millions, but more importantly, improves care for beneficiaries in ways that a raid would not: Cuts will help close the prescription drug gap, reducing seniors’ costs. It also gives them preventive care free of any co-pays. Because of these changes, increases in payments to hospitals and providers is predicted to slow, hopefully slowing the growth of premiums and copayments that seniors have to pay. Most importantly, saving Medicare money ensures its longevity long into the future.

Author: Larkin Callaghan

I'm a born and bred San Franciscan, with previous residences, postings, and assignments in NYC, LA, Eastern and Southern Africa. Runner, global health and international development expert, health communications and strategic partnerships professional, implementation science investigator, reproductive health advocate. Previously seen working at the UN, professor-ing at Stanford University, implementing in SSA with the CDC, PEPFAR, and ICAP at Columbia, and managing research at UCSF.

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