The Affordable Care Act has been one of the most controversial pieces of legislation in years. The Democrats passed the law without a single Republican vote, and since then, the Republicans have done everything they can to repeal it. In this hostile environment, it’s easy for ACA myths to develop. HR professionals and business owners need to see through this misinformation so they can understand the real implications for their health care coverage.
Myth 1: The ACA Is Causing Health Care Costs to Skyrocket/Plummet
When the law was passed, Democrats said it would control costs and lead to much lower health care premiums. But Republicans claim that the ACA has, in fact, caused health care costs to skyrocket. Neither side is completely right or wrong.
Health care costs are not skyrocketing, but they are going up every year. However, health care costs went up regularly before the law was passed, so the ACA is not the only factor. In fact, the rate of increase has slowed since the law passed, so the ACA could be controlling costs.
However, the law has not been the magic solution that some Democrats, including President Obama, said it would be. Costs are still going up and some insurers pushed to increase premiums by 20% or more in 2016.
Myth 2: Businesses Will Drop Health Care Coverage Because of the ACA
Critics of the ACA predicted that businesses across the country would drop coverage because of the new costs and regulations. This did not happen. Most large employers have maintained their health insurance plans since the ACA was passed, according to the Kaiser Foundation. While some small businesses have dropped coverage, they were already dropping coverage before the law was passed so this cannot be said to be a direct result of the ACA. A recent survey suggests that the number of small businesses offering coverage has now stabilized, with fewer small employers considering terminating their plans.
Myth 3: The ACA Lets Americans Keep Their Old Coverage
When Obama first proposed the ACA, he said that if someone liked their existing coverage, they could keep it after the law was passed. However, this was a misstatement. In reality, the ACA caused more than 7 million people in the individual market to lose their existing coverage, according to NBC News. Their insurance companies forced them to move to plans that met the new ACA standards.
Small-business owners also had to update their plans in 2014 to meet the new minimum essential benefits requirements under the ACA. While many people kept their existing coverage, it is definitely not true that everyone got to keep their old plans.
Myth 4: The Federal Exchanges Are the Future of Buying Health Insurance
The ACA developed a federal marketplace for buying health insurance online. When the marketplace first launched, the site could not handle the massive amount of traffic and crashed, something that critics and the media immediately jumped on.
Considering the amount of media coverage it has received, you might think that the federal exchange is extremely important for anyone buying health insurance. In reality, only a small segment of the population will use the federal exchange: people buying individual plans and small-business plans. Large employers do not use the exchanges and neither do people on Medicare and Medicaid. The Congressional Budget Office estimates that, from 2017 to 2024, about 24 to 25 million people will buy their coverage from the exchanges each year; that’s only about seven percent of the population.
Myth 5: The ACA Forces Employers to Offer Health Care Coverage
The ACA tries to encourage employers to offer health care coverage to employees, but it does not force them to. Small businesses with 50 or fewer full-time equivalent employees face no penalties for not offering coverage. If larger companies decide not to offer coverage, they need to pay an extra tax penalty. However, they are free to go this route if they decide they don’t want to deal with meeting ACA requirements. No one is forced to buy insurance.
Don’t let ACA myths and misinformation get in the way of making the best decisions for your company’s health insurance plan. By keeping this information in mind, you can feel confident that your decisions are based only on the facts.