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.