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Why People Hate Obamacare

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Three years ago, President Obama signed into law one of the most sweeping pieces of legislation in recent memory, the Affordable Care Act -- or "Obamacare," as most Americans know it.

To say that the law was and remains controversial would be an understatement. Over the past month, we've published a number of articles on the topic ranging from 12 shocking truths about it to the impact Obamacare will have on taxes. And our readers have had a lot to say in the comment sections of each article.

What follows, in turn, is a collection of the five biggest complaints our readers have expressed about Obamacare in the articles that we've published on the subject. To generate the list, I've curated our best articles on the subject from the past two months.

1. Higher taxes
The biggest complaint is that Obamacare raises taxes. This is particularly true with respect to Medicare taxes for higher-income earners.

As Dan Caplinger discussed in "How Obamacare Changed Your Taxes," single taxpayers earning more than $200,000 a year in wages or other work-related earnings will pay an additional 0.9 percentage points in Medicare tax – the threshold increases to $250,000 for taxpayers filing jointly. And taxpayers with adjusted gross incomes exceeding the same thresholds will see a portion of their investment income taxed at the higher rate as well.

Beyond this, as Dan also brings up, is that it decreases the amount that lower-income earners can set aside in a flexible spending plan to $2,500 a year and raises the floor on deductible medical expenses from 7.5% to 10% of adjusted gross income.

2. Skyrocketing health-care costs
One of the principal purposes of Obamacare is to drive down the costs of medical care and insurance premiums. But as Sean Williams noted in "Is Obamacare About to Skyrocket Your Health Care Costs?" there's reason to be skeptical that it will succeed in doing so.

Sean cites a report (link opens a PDF) by the Society of Actuaries estimating, among other things, that the inclusion of non-group members participating in the insurance pools will increase average individual claims cost by 32%. The increase won't be uniform across states. In five states, underlying claims are expected to drop. In 37 others, claims costs are expected to increase by 20% or more. The reason is simple: Under the legislation, 32.4 million of the currently 52.4 million uninsured Americans (who often carry the highest risk) will gain coverage.

3. Additional costs on employers
A key provision of the Affordable Care Act mandates that companies with 50 or more employees must provide full-time workers with health insurance or face a penalty of $2,000 per employee. In "Will Obamacare Cost You Your Job?" the Fool's Keith Speights observed: "For some small businesses, the extra costs for this coverage are forcing tough decisions." Keith cites two examples in particular. First, small businesses with more than 50 employees could scale back their payroll. And second, larger businesses could substitute part-time workers in place of full-time employees.

Rich Duprey's article "Will Obamacare Carve up the Restaurant Industry?" builds on these concerns. Rich cites statements from CEOs of multiple restaurant chains about the possibility that worker hours will be cut to avoid the added premiums. The head of Papa John's (NASDAQ: PZZA  ) said that it's "common sense" to do so, and Darden Restaurants (NYSE: DRI  ) , the parent company of Olive Garden and Red Lobster, experimented with a plan to hire more part-time workers last year before abandoning it in the face of a customer backlash.

Sean Williams provided a more nuanced take on this issue in "Will Obamacare Turn America into a Nation of Part-Time Workers?" After citing Regal Entertainment's (NYSE: RGC  ) move to reduce hours for thousands of its non-salaried employees, Sean concluded: "While I don't think we'll see a dramatic shift to part-time employment, I also wouldn't be shocked to see certain business sectors pull what Regal Entertainment did to its employees, either."

4. Impact on the quality of current coverage
Because Obamacare is still a work in progress, given that many of its provisions have yet to take effect, it remains to be seen exactly what Obamacare-provided policies will look like. Dan Caplinger addressed this uncertainty in "Will Obamacare Really Give You Better Health Insurance?"

Dan broke the analysis down according to whether or not you're covered by an employer-provided group plan. If you get insurance outside work, then your policy will probably contain more benefits under Obamacare. In support of this, Dan cited a University of Chicago study finding that "among the roughly 14 million Americans who have individual health coverage rather than group coverage through an employer or other organization, more than half of those plans didn't provide enough benefits to qualify under Obamacare's standards."

Alternatively, if you're currently covered by a group policy, then you'll probably see little change, as "employer-provided plans already have generally strong coverage." The only issue is whether businesses will retain group coverage, which seems more likely than not for large employers, according to a study by HR consulting firm Mercer.

5. Outsourcing of jobs and R&D
The final big complaint about Obamacare is that it encourages certain companies to outsource jobs and operations. At the end of last week, Keith Speights took a look at the first-quarter earnings results of medical-device makers in his article "Blame Obamacare for the Medical-Device Sales Slump?" Many of these companies, like Johnson & Johnson (NYSE: JNJ  ) , which is a major component on the S&P 500 (DJINDICES: ^DJI  ) , experienced substandard results compared with the same time period last year. Although it's still too early to say whether the culprit is Obamacare, as Keith says, "It's certainly no secret that several medical-device industry leaders predicted that Obamacare would hurt the industry."

What, in turn, could cause a slump in sales and potentially even an outsourcing of jobs? Once again, higher taxes. As resident Obamacare expert Dan Caplinger discusses in "The Shocking Truth About This Hated Obamacare Tax," the law imposes a 2.3% tax on sales of medical devices.

Is Obamacare good for America?
Whether Obamacare will be a good thing remains an open question for many Americans. Putting politics aside, there's simply no question that there are both positive and negative aspects of the sweeping legislation. Share your own opinion about how this will balance out in the comment section below.

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Read/Post Comments (11) | Recommend This Article (7)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On April 27, 2013, at 4:46 PM, Amma1215 wrote:

    For all those forced into part-work because of this hunk of junk, you may no longer be able to afford a roof over your heads or feed your children, but you will have health insurance. Nice trade-off, huh? And don't forget your pets. Vet bills will also increase since many of the same medical devices are used on your pets. And cigarette smokers will be charged 50% more with no subsidy allowed, still putting insurance out of reach for many lower-to-middle income people. Should you smoke? No. But the point is Obama promised "affordable healthcare for EVERYONE.

  • Report this Comment On April 27, 2013, at 4:47 PM, Jschop19751941 wrote:

    Obamacare will practically destroy the success the economy has made since the recession in 2008. People are being taxed up to their eyeballs and are sick of it while politicians spend money like its water on other countries that hate us (ie. Middle East). Meanwhile those same politicians let illegal aliens in our country seeking amnesty, restrict our second amendment and seem to hold more compassion for scumbag Muslim terrorists like the Boston bombers than their victims. In states like MD the death penalty was repealed yet dream act and homosexual marriage was passed showing that the legislators priorities are not to the majority of society but small minority sections of society who can give politicians votes. Our president and politicians have failed the majority of hard working, traditional Americans in favor of socialism and high taxes. All of our politicians including our president, Vice President and all "liberals" (really communists in disguise) should be immediately removed from office and tried as traitors to the United States for the way they have failed America and potentially started it on a path of destruction that we may not be able to reverse for generations if we can reverse it at all.

  • Report this Comment On April 27, 2013, at 4:47 PM, PBerg1 wrote:

    The sections of additional costs and claims may be way off. I worked in Medical Insurance for many years. Insurance works on the Law of Large numbers. Don't forget that many of those uninsured being forced to buy coverage, will not have ANY claims. This area may greatly surprise people.

  • Report this Comment On April 27, 2013, at 4:49 PM, wscarp1 wrote:

    Why do most articles on Obamacare focusing on the negative...both real and imagined. The positives are really huge: 30 million people able to get health insurance that up to now...couldn't afford it; no more exclusions because of pre-existing conditions (e.g. obesity), MedicarePart D donut hole disappearing, no more dropping people when they get seriously ill, children can stay on their parents' policy until they're 26, etc.

    The one fact that I keep in mind amidst the hysteria is that the Institute of Medicine predicts that Obama care will save 20,000 Americn lives a year that are now lost simply because people have no healthcare but emergency room care.

  • Report this Comment On April 27, 2013, at 6:20 PM, LibsAreLikeLice wrote:

    Why Americans fear and hate Obamakare:

  • Report this Comment On April 27, 2013, at 7:19 PM, CQMckay wrote:

    None of Obamacare was about cheaper healthcare, it was about power and politics!

  • Report this Comment On April 27, 2013, at 7:27 PM, seattle1115 wrote:

    This is mostly a load of nonsense. Let's take each point in turn:

    1. Higher taxes. Yes, a small number of people - mostly, those who have most benefited from the historically low tax rates of the last several years - will suffer an incremental increase in their tax load. Shockingly, I'm completely okay with this.

    2. Skyrocketing health-care costs. Beware of using loaded words like "skyrocketing," because they often presage an embarrassing overstatement. While economic reality has a way of humbling all prognosticators, it is easy enough to avoid simple mistakes like suggesting that "32.4 million of the currently 52.4 million uninsured Americans (*who often carry the highest risk*) will gain coverage" (emphasis supplied). The fact is, the uninsured are very often those who carry the *lowest* risk - the young, the healthy, those who feel most confident gambling against serious illness or injury. These are exactly the people we want paying premiums to ensure the vitality of the health care coverage system they will need when they're older.

    3. Additional costs on employers. This one is actually a valid point, sort of. It is likely so that employers - many of whom place little or no value on the well-being of their employees, and think of the people who work for them as being like fixtures and furniture, except less reliable - will use health care reform as an opportunity to squeeze a bit more from their employees. This is exactly why health care coverage should not be linked with employment (and why certain employers should be placed in public stocks).

    4. Impact on the quality of current coverage. You write: " If you get insurance outside work, then your policy will probably contain more benefits under Obamacare.... Alternatively, if you're currently covered by a group policy, then you'll probably see little change." I'm sorry, but I'm failing to see the problem here.

    5. Outsourcing of jobs and R&D. Again, this may in fact turn out to be the case - in which instance no one will notice, among all the other incentives, enticements, and inducements to outsource jobs and R&D written into our statutes and codes.

    Look, I'm no fan of the PPACA. I supported Obama in the 2008 primaries precisely because, unlike Sen. Clinton, he was *not* proposing a health care fix founded on an individual mandate to carry private coverage. That said, I find it frustrating in the extreme that the people lining up to throw rotten fruit at the PPACA are often the very same people who cheered when th Heritage Foundation proposed the same idea, Newt Gingrich promoted it, and Mitt Romney implemented it. A lot of this opposition smells phony to me today.

  • Report this Comment On April 29, 2013, at 12:27 PM, tlc83862 wrote:

    Insurance companies are now forced to pay claims at the rate of 80% of those claims instead of the low 25% as they did in the past only collecting and pocketing the profits and refusing to pay claims with any kind of pre-existing excuse they could come up with. Obamacare is all about taking out the fraud and high paying ceo's from insurance for profits companies. Just look up United Health care one billion a year Ceo's Bill McQuire back in 2005 and you see why something had to be done.

  • Report this Comment On April 29, 2013, at 12:30 PM, tlc83862 wrote:
  • Report this Comment On May 31, 2013, at 9:40 AM, janispowers wrote:

    I think Obamacare passed because Congress was emotionally impacted by the death of Ted Kennedy. I think the healthcare system is broken and Obamacare extends that broken system to everyone else. In my Huffington Post blog, I called it "the gangrenous limb on the ailing body of the American healthcare system and it needs to be cut off." Please read the whole post at:

  • Report this Comment On July 28, 2013, at 7:27 PM, Gfulmore wrote:

    In reading the article entitled, "Why People Hate Obamacare," I didn't read a lot about hate. Some folks have reservations, but most are of a general nature. What is not mentioned are the benefits of providing access and affordability to Americans that have not had that before. An American family of four with an annual income of $30,000 simply has not been able to pay the premiums of $12-$14,000 per year. That would be 40% of their income! So, they have been going without insurance and have been risking bankruptcy if one of their members got seriously ill. The other group have been the individuals with pre-conditions being denied access to health insurance on the individual market. That will end under Obamacare and I am a believer that the inclusing of those folks in the system will not add one dime to the over cost of coverage. If these same folks would have been accepted via a group plan, what difference will it make?

    So, count me among those who LOVE Obamacare, even though it does not affect me or my family directly. I'm pleased that most the 15% or so of Americans now without health care insurance will have it soon. I am also pleased that under Obamacare ALL Americans will be required to have health care insurance, so that these folks will not arrive at emergency rooms and expect others to pay their bills.

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