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Five things you need to know about the Affordable Care Act

With the Supreme Court’s decision on the legality of the Affordable Care Act finally made, we pulled together a quick list of things you should know from Health Care Reform and American Politics: What Everyone Needs to Know by Lawrence R. Jacobs and Theda Skocpol.

(1) Most Americans don’t know what it means to them.

Americans reacted to the passage of the Affordable Care Act with continued ambivalence, with opinions divided roughly down the middle in incessant polls asking whether the new law was the right thing to do. During many months of partisan battles and legislative maneuvers about the new legislation, groundless warnings about “death panels” and draconian cuts to Medicare unnerved many people—and the entire mess was confusing. Not only right after passage, but in subsequent months, most Americans have told pollsters they are not sure what is in the legislation. People don’t understand what reform actually means for them—or what it portends for the future of our economy. With the Supreme Court decision looming until Thursday’s announcement, most Americans have yet to fully absorb the impact of the Affordable Care Act.

(2) Most people benefit from the Affordable Care Act.

The winners of health reform are the vast majority of Americans. When the provisions are effectively implemented, seniors, the sick, and middle Americans — including many families in the upper middle class — will receive wider and easier access to health insurance benefits protected from trickery by the insurance industry. The number of working-age Americans and their children who have to go without basic health insurance will decline by a remarkable 32 million people. This comes from the nonpartisan CBO, which projects that coverage will be extended to 94% of all Americans and legal immigrant residents (up from 83% today). About a third of the remaining uninsured will be undocumented or illegal immigrants, who are not eligible for coverage under the reform law.

(3) The affluent will pay more but will ultimately benefit.

The newly reformed U.S. health care system provides, on balance, a good deal for the vast majority of Americans. At the very top of the economic ladder, though, the payoff for families making more than $250,000 a year is mixed. They will share in general improvements in insurance, and, of course, many wealthier Americans place a high value on a better health care system for all their neighbors, as well as for themselves. They want their children to grow up in a healthier America, where teachers and policemen and clerks can enjoy health security, too. Still, the rich are asked to pay a bit more to make this better system possible. On the plus side of the ledger for privileged folks, richer families will benefit along with all other Americans from new restrictions on insurance companies that prohibit caps on coverage and egregious abuses such as finding a pretext to drop beneficiaries when they get sick.

(4) The Affordable Care Act will help the economy.

Health reform will impact the economy in ways that help everyday Americans, while producing an overall boost to job growth. People will be able to build careers and found businesses secure in the knowledge that they can get affordable insurance for their families. Employers will have to navigate new rules—and larger employers may pay new fees. But all employers will benefit from more fluid job markets, healthier workers, and reduced costs—especially for employers who have already been providing health care coverage for their employees. As for businesses in the U.S. economy’s vast health care sector, they are going to win, on balance, enjoying more customers and opportunities for growth and profits. “Wall Street Welcomes New Health Prescription,” proclaimed a banner headline in the business section of a leading metropolitan newspaper right after Congress voted on Affordable Care. Traders in health industry stocks know how to penetrate the partisan and ideological fog to see the economic bottom line.

Lest we think that only Wall Street will win, so will the Main Street economy. Without comprehensive health reform, perhaps a quarter of U.S. workers have been locked into their jobs—afraid to pursue new openings out of concern to hold on to health benefits, or choosing a less than optimal job because it has health benefits and an otherwise more attractive job does not. “Job lock” is certainly bad for Americans trying to get ahead. And it is bad for the whole economy, too, because a mobile workforce is more dynamic, efficient, and entrepreneurial.

(5) We can afford to provide most Americans with health care through tax revenue and cost controls in the Affordable Care Act.

According to the design of Affordable Care, the mammoth bill is to be paid by the affluent, well-to-do businesses, and established medical providers. Just over half the bill for health reform is to be paid by taxes and fees that fall on the wealthiest Americans and on businesses (including health care giants and employers that have been free-riders in the past). The remainder of the revenue to defray costs in health reform comes from trimming what the federal government and nation were previously slated to pay over many years to health care industries and providers. Significantly trimmed subsidies to private insurance companies involved in Medicare are a substantial source of savings. “Bending the curve” is the term for this—and it reflects the fact that even if only slight reductions can be made now in the rate of price increases charged by physicians, hospitals, and health care companies of all sorts, such slight reductions can nevertheless add up to big savings over time. The authoritative and nonpartisan CBO projects that the law’s combination of increased revenue from taxes on the affluent, plus cost restraints, will more than cover the price tag for health reform. Better, the CBO projects that future federal expenditures on health care will come down from previously assumed levels enough to reduce the federal government budget deficit by about $140 billion during the first ten years of the new program. CBO projects further improvement in the bottom line for deficit reduction during the second decade of Affordable Care. In short, Affordable Care as enacted is a deficit-reducer, not a budget buster.

Lawrence Jacobs and Theda Skocpol are the authors of Health Care Reform and American Politics: What Everyone Needs to Know, which we have a sneaking suspicion may already be undergoing revision and updates. Lawrence R. Jacobs is the Walter F. and Joan Mondale Chair for Political Studies and Director of the Center for the Study of Politics and Governance in the Hubert H. Humphrey Institute and Department of Political Science at the University of Minnesota. Theda Skocpol is the Victor S. Thomas Professor of Government and Sociology at Harvard University, a member of the National Academy of Sciences, and past president of the American Political Science Association.

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