An oft-repeated criticism of Obamacare — the Affordable Care Act — is that the law is too complicated to understand. It has been my experience that those who make this claim have simply made no effort to understand it. While certain aspects of the law are nuanced, the general principles under which it operates appeal to common sense.
Obamacare’s strategy for improving the individual and small group markets has often been described as a “three-legged stool.” This metaphor is instructive in understanding the three necessary components of the law: community rating, individual mandate and government subsidies.
The primary mission of Obama-care is to provide affordable health care to all U.S. citizens — even those who were too sick to obtain coverage prior to its passage. The community rating concept ends condition-based discrimination and provides all citizens with access to coverage.
Community rating will certainly motivate sick people to seek out coverage, driving up costs. Therefore, a mechanism must exist to offset those increases. Enter the individual mandate — which encourages young and healthy people to buy insurance, expanding the risk pool and bringing costs back down.
Finally, because it would be unfair to force people who cannot afford it to buy insurance, government subsidies are available. These subsidies — applicable to those making up to 400 percent of the poverty limit — mitigate the potential economic hardship of requiring citizens to buy insurance.
I certainly share in the disappointment over the rollout of Obamacare but remain optimistic that the three-legged stool will ultimately stand strong.
JUSTIN T. ROMANO