A look at the effects of the ACA

In last month’s column, I began responding to a friend’s challenge to offer my own assessment of the effectof the Affordable Care Act. I encouraged readers to hold me accountable for these predictions, provided there are no changes made to the law that would alter the predictions.

Last month’s column contained the four provisions with the highest effect on society. This column will offer some additional effects, roughly in order. In brief, the first four were:

— The average family of four is responsible for about $18,000 in new debt because of the ACA over the next 10 years. Last week, the Congressional Budget Office increase the estimated 10-year cost to more than $50,000 per person covered under ACA, so this number will increase.

— The ACA accomplishes a massive transfer of wealth from government to corporations.

— The ACA widens income inequality and disproportionately causes job loss among the poor.

— Approximately 1 percent of the population with serious health issues who were previously unable to obtain health insurance now can.

Here are the next effects:

— As noted, there is a massive transfer of wealth to corporations. There is also a massive transfer of wealth from the young to the old — who, incidentally, are already the wealthiest age group in America. It has been challenging to get the “young invincibles” to sign up for the ACA because they calculate that it is a horrible financial investment for them.

I encourage everyone to have insurance, and by law, it is now required. College students at Bowie State University saw their health insurance cost rise from $54 to $900 each semester before BSU wasn’t sure that, even at that price, their policies would be compliant so they terminated their health insurance plan.

Locally, the year Fayetteville State University and The University of North Carolina at Pembroke brought their plans into compliance, the increases were 57.2 percent and 63.4 percent, respectively. College students experienced similar cost increases across the nation.

A typical “young invincible” may not utilize health care at all, or at most gets reimbursed for a physical and/or birth control. Yet their premium may be $5,000 a year. That money will be split between the health insurance company and the medical costs of someone typically much older. Presumably, the young who pay now will benefit disproportionately when they are old.

— Millions of people are now paying less for health care because of the subsidies available on the exchange and Medicaid expansion. It should be easy to quantify these numbers exactly, but the government is not being transparent with these figures.

About 7 million people had their policies cancelled because they were not compliant with ACA. In most cases, these people were much happier with the policy they had then the one available to them at a comparable price on the exchange.

A policy is not compliant, for example, if it doesn’t have pediatric dental coverage. Many people ended up having higher premiums for a policy with pediatric coverage while their deductible may have soared from $250 to $1,000 or even $5,000.

Approximately 6.7 million people are reported to have obtained policies on the exchanges by 2014. Approximately 6 million people benefited from Medicaid expansion. Of course, the largest increase in coverage came from people who became employed and obtained coverage at work. It’s difficult to put a “net” number on all of these shifts, but certainly at least 6 million people, possibly millions more, now have coverage at a subsidized cost.

Approximately 87 percent of the people who obtained insurance through the exchanges received some subsidy, which on average, covered 75 percent of the premium. These are substantial out-of-pocket savings for these individuals.

— Although I’d like to address device taxes, whether the cost curve has been bent, and other effects, I’ll use my remaining words to discuss another major change, the retirement age of physicians.

We are living in interesting times in which many able-bodied people are leaving the workforce at younger ages. But the more highly skilled a person is, on average, the later he or she will retire.

I predict the one exception to this trend will be physicians. Because of the ACA, we are going to see the retirement age for physicians decline. This is very problematic because our society will lose millions of person-hours of the most highly skilled care at a time when we need it most because of the way this legislation was written.

Eric Dent is a business professor at Faytteville State University who lives in Lumberton.


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