Problems with PPACA

        

The liability piece of the healthcare system was not touched.1  Perhaps it is because the trial lawyers association is a large donor to the democratic party.  Without liability reform, namely tort reform, providers will continue to practice defensive medicine.  Costs are going to continue to rise as providers continue to practice and order tests that may not be needed.  Defensive medicine occurs when providers alter clinical decision making because of the threat of medical liability.6  The American Academy of Orthopaedic Surgeons reports that more than 90 percent of physicians reported practicing defensive medicine within the past 12 months.  Liability reform is estimated to result in a savings between 5%-34%, by reducing the practice of defensive medicine.  This would equate to an annual savings of $54-$650 billion dollars.6

        

New taxes aimed at small business owners, employees, and consumers will fund PPACA.  As previously mentioned funding will come from payroll taxes on high-income earners increasing by 0.9 percent.  In addition, there will be a 3.8 percent tax on unearned income for those same individuals.7  Provisions aimed to help small business such as the health insurance tax credit are only temporary.1,2

        One final strike to the pocket book of the working American, is Flexible Spending Accounts (FSA) and Health Savings Accounts (HSA) will not allow employees to purchase over-the-counter medications.  All medication purchases using FSAs or HSAs will require a prescription.1,2  Those expensive over-the-counter medications will now be out of pocket expenses for every American, even if they planned in advance with a HSA or FSA to cover the costs.

        

More Red Tape

        

        It is hard to think of an example where government intervention reduces red tape and the PPACA is no exception.  Anyone who receives $600 or more in compensation from a business will be required to receive a 1099 from that business at the end of the year.  This ruling has been predicted to be so burdensome to American small businesses that even Obama has vowed to sign legislation to repeal it.  Currently, the bill is gridlocked in Congress.

        Under the PPAC, the employer mandate will allow employers to receive monthly reports on subsidized employees.  This has potential liability implications.  Revealing personal finances to employers exposes individuals personal information and could increase employers liability.1

        

A business with the employer mandate in place and coverage for a household may see the government tack on penalties in such instances as an employee’s spouse loses a job, or an elderly relative moves in.  There is the possibility that the employers will have to pay a penalty without knowing the full details, unless challenged and given permission by a government agency.1

        

Finally, under the employer mandate, PPACA forces businesses to make decisions regarding hiring.1,2  Businesses with 50 or more employees may see premiums in excess of $2,000 to $6,000 higher than businesses with 49 or fewer employees.  Any business at or near that threshold will have significant fiscal concerns with hiring additional personal.  A study put out by McKinsey in 2011 found that after 2014 approximately 30% of employers will “definitely or probably stop” employer sponsored health insurance.  More than 60% of employers said that they would look for other options once PPACA is enforced.  If these estimates are correct, by 2019 as many as 20 million Americans may see their employer-sponsored health benefits disappear, and 49 million more Americans may be dependent on government healthcare by 2019.5

Reduced Freedom

        The individual mandate threatens individual freedoms and forces Americans to obtain healthcare insurance.  The PPACA is designed to benefit a relatively small segment of the American population.4  However, the PPACA affects the entire population by addressing health insurance as a right.  This hits on an underlying concern with PPACA, once everyone has health insurance, they still might not have health care.

        There are estimates that the number of uninsured is around 50 million.  Of this number, an estimated 25% are already eligible for Medicaid or CHIPS (Children’s Health Insurance Program).  Another 10 million of the uninsured aren’t even citizens.  Some have raised the concern that 25-75% of the uninsured have incomes high enough to pay for healthcare insurance, but choose not to.  This leaves only a few million people out of a population of over 300 million that potentially could benefit from nationalized healthcare.4,5

References:

        

1. PPACA: Endless Problems for Small Business. National Federation of Independent Business.  Retrieved from

2. Harris, S., Keller, E., Lipsig, E. (March 2010). Healthcare “Reform” Provides no relief for Employers. Paul Hastings. Retrieved from

3. Trino, K. (1 March 2012). Obamacare’s Gift to the States: Huge Unfunded Medicaid Mandate. Retrieved from http://www.nationalreview.com/corner/261054/obamacare-s-gift-states-huge-unfunded-medicaid-mandate-katrina-trinko#

4. Fisher, D. (28 March 2012). The Big Problem with Obamacare: It Doesn’t Help Many.  Forbes. Retrieved from

5. Roff, P. (16 March 2012). Cheap PR Stunts Can’t Hide Obamacare’s Huge Problems.US News. Retrieved from

6. Hettrich, C. (December 2010). The Costs of Defensive Medicine. AAOS Magazine. Retrieved from

7. Federal Funding Under the Affordable Care Act. (2012, April).  The Henry J. Kaiser Family Foundation. Retrieved from