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Obamacare and its impact on the economy

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Barack Obama has succeeded in implementing the first major health reform in the United States in nearly 50 years, as the Patient Protection and Affordable Care Act went into effect.

President Obama announced April 17 that 8 million people had signed up for insurance under the Affordable Care Act, 35% of whom are under the age of 35. Additionally, 5 million people signed up for ACA compliant plans outside of federal/state marketplaces. The coverage deadline was April 15.

The individual mandate, derived from a Republican precedent in Massachusetts, stands in stark contrast to a single payer health insurance system, that is common in most other Western countries. Even though Obamacare broadens coverage, the individual mandate relies on a fundamental insurance principle – care depends on type of coverage – and compels Americans to purchase insurance to access care. Americans now have more affordable insurance options and subsidies to cover their costs, and the lowest-income may be eligible for public coverage through the expansion of Medicaid. Still, despite the late crush of online traffic, only half of the estimated 40-plus million uninsured will be affected by Obamacare.

The White House said lower-than-expected premiums under the ACA mean that $104 billion will be saved in the next ten years. Premiums for 2016 are likely to be 15% lower than estimates.

The White House said March 5 that customers will be able to keep health plans that don't comply with the new health law requirements as long as they're issued by Oct. 1, 2016. The decision, which will help avoid political backlash for Democrats during midterm elections this year, will affect some 1.5 million people.

The Obama administration on Feb. 10 granted businesses with 50 to 99 employees an additional year--until Jan. 1, 2016--to provide health insurance for their workers. The administration also said companies won't be fined if they offer coverage to 70% of full-time employees by 2015, expanded to 95% by 2016.

The CBO's annual outlook projects that by 2024, Obamacare will lead to workers reducing their hours or leaving the workforce resulting in the equivalent of about 2.5 million jobs lost. The report ties the reduction in labor participation to people who will want to continue qualifying for Medicaid and federal subsidies.

A new Congressional Budget Office report published April 14 reduced the estimated cost of Obamacare from $1.487 trillion to $1.383 trillion for fiscal years 2015 to 2024.

The most important item in the ACA is that people with preexisting health conditions will no longer be denied health insurance. Thus, if and when they require major healthcare, they should no longer be forced into bankruptcy because they are unable to pay their astronomical hospital bill.

That is the number one reason people seek bankruptcy protection, so the fewer people that use this last resort, will benefit the economy as a whole.