Obamacare Is A Big Deal, But What Is It?

When President Obama signed the new health care bill, Vice-President Biden was overheard saying, "This is a big f***ing deal." It may be a big deal, but after all of the drama, I still don't know much about what is in it or how it would help someone like me. As a middle-class taxpayer who pays over $1,000 per month for health care, I would certainly like some relief from the cost. However, I don't think it's going to happen.

For a bill which is thousands of pages long, it is hard to get any definite information on what is in it. Here is a link to one of the better summaries I was able to find on the bill. Based on this summary and others I have seen, I have been able to piece together a few specifics on what the bill does and most of them are not that exciting.

1. Everyone will be required to have health insurance. This doesn't affect me directly since I already have health insurance. However, the notion that we are going to achieve full coverage by requiring people who don't want to be insured to buy insurance strikes me as a bit cynical. Presumably the thought is that young healthy people will buy insurance they won't use, which will subsidize the cost for everyone else. On the other hand, if people are forced to buy insurance, they may actually use it. More demand for a product usually leads to higher prices. Therefore, I see this as either a neutral factor or a negative.

2. Insurance companies cannot deny coverage for pre-existing conditions starting in 2014. This strikes me as fair. However, it does mean that the added cost will be passed on to everyone else. That means that my health care costs will go up.

3. More people will be eligible for medicaid. This is one way to get more people covered. However, any increase in government benefits will have to be paid for from increased taxes. The bill taxes really rich people and people with really good coverage. I don't fall into either category so this shouldn't concern me. However, I do have some concern that rich people won't want to be taxed and will find ways around the tax increase, so that the cost will ultimately be passed on to the middle class.

4. The government will spend $940 billion for something. While the price tag of the bill is well known, what it will be spent on is less clear. Is this all for the increase in medicaid? What are we getting for nearly a trillion dollars?

5. There will not be a public option, but there will be state insurance exchanges. There will also be subsidies for lower income tax payers. Also, government may be able to block some increases in rates by insurance companies (not sure if this made it into the final bill). These provisions could help me. While my employer provides me with insurance, I have to pay for insurance for the family. That cost has increased by 50% over the past few years. Thus, getting a more affordable plan for my family would be welcome. However, since many of the features of the bill don't kick in until 2014, it's hard to know when or if this will help.

6. At one point, there was talk about limiting the amount you can put into a flex plan to $2,500 per year. I have no idea whether this made it into the final bill. If it did, this means that I will pay more in taxes, since I currently contribute more than $2,500 into my flex plan.

Joe Biden may be right. The health care bill may be a "big f***ing deal." But it won't be for me or my family. We will continue to pay too much for health care for the foreseeable future.