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Happy Birthday Health Reform, Part 3: Three Things You Probably Don’t Know About Health Reform

Two years since President Obama signed the Affordable Care Act — health reform — into law, opponents continue to make many of the same false claims that they made before Congress passed it.  Repeating those claims hasn’t made them true, but it may have obscured some simple facts about health reform, like these:

FACT #1: The vast majority of Americans will continue to get coverage through private insurers under health reform.

Contrary to claims that health reform is a “government takeover” of the health care system, the overwhelming majority of Americans will get coverage through private insurance companies, just as they do today.

Employer-sponsored health insurance will continue to be the dominant source of coverage for workers and their families.  Many people who can’t get insurance through their job and can’t afford to buy it on their own will get tax credits to help them buy quality coverage through health reform’s “exchanges,” marketplaces where people can compare and buy health insurance.  The plans offered in the exchanges will all be private plans.

Health reform will expand Medicaid to cover low-income families who wouldn’t be able to afford private insurance even with a subsidy.  But, in most states, private insurers cover Medicaid patients.

All in all, health reform builds on the insurance system we already have, but it reins in some of insurance companies’ most egregious practices by establishing important consumer protections (as our last post explained) and helps many people afford coverage.

FACT #2: Health reform is a good deal for states.

Opponents like to say that health reform will burden state budgets.  That’s false.

From 2014 through 2022, the federal government will pay 93 percent of the cost of health reform’s Medicaid expansion, which will enable Medicaid to cover an estimated 17 million more low-income adults and children than it does today, most of whom are now uninsured.

The expansion’s cost to states over this period will be $73 billion — just 2.8 percent more than what they would have spent on Medicaid without health reform.

Health reform will also save states billions of dollars each year in costs for providing mental health care and other health care services to the uninsured.  An analysis by the Kaiser Commission on Medicaid and the Uninsured found that many estimates of state Medicaid costs under health reform don’t adequately take these savings into account, which could be quite substantial. In fact, analysts from the Urban Institute suggest that the savings could more than offset the state costs of expanding Medicaid.

FACT #3: Health reform’s Independent Payment Advisory Board can’t ration health care.

Critics charge that the Independent Payment Advisory Board (IPAB) — a presidentially appointed commission that health reform created to help slow the growth of Medicare costs — will ration health care for seniors, but that’s false.

Health reform specifically prohibits the board from slowing costs by rationing health care, raising Medicare’s premiums or cost sharing, cutting benefits, or restricting eligibility.  It must focus exclusively on proposals that achieve savings in paying for and delivering health care services.

If Congress repeals IPAB, Medicare beneficiaries likely would face far worse alternatives.  Congress would likely consider blunt proposals that generate federal savings simply by shifting significant costs to beneficiaries, such as sharply increasing premiums and raising the eligibility age.