In case you didn’t know, there’s a little thing known as Obamacare that’s causing big changes in health care. I mention this because a recent survey found that 42% of Americans didn’t realize that Obamacare is currently in effect. That same survey found that only 35% of Americans view the law favorably.
I have written articles in the past that pointed out absurdities in Obamacare, noted potential job losses resulting from it, and looked at stocks that should benefit from the legislation. However, I haven’t highlighted positive aspects of the law itself — until now. Here are three of parts of Obamacare that (nearly) everyone should love, even if you still hate the rest of it.
1. Rescinding rescission
In the past, insurance companies could cancel insurance retroactively when they found out that an individual developed a serious illness. This process, called rescission, was reprehensible to many. Obamacare stopped it from happening.
Granted, public pressure probably would have ended rescission even without the legislation. Actually, WellPoint, Inc. (NYSE:WLP) and UnitedHealth Group Inc. (NYSE:UNH) yielded to heavy criticism and changed policies to do away with the practice even before Obamacare was implemented.
It should also be noted that rescission wasn’t overly common in recent years. In 2009, WellPoint, Inc. (NYSE:WLP) retroactively canceled less than one-tenth of 1% of policies — and these cancellations were because of fraud. Obamacare, by the way, doesn’t prevent insurers from retroactively denying coverage where fraud was involved.
However, we should give credit where it’s due. Ending arbitrary rescission was and is a good thing.
2. Biosimilar availability
Millions of Americans benefit from the wide availability of generic alternatives to brand-name drugs. However, that option hasn’t existed for biologic drugs, which are made from living organisms. Obamacare set in motion events that will change this situation. The legislation authorized the Food and Drug Administration to establish an approval process for biosimilar drugs.
Granted, not everyone loves this part of Obamacare. AbbVie Inc (NYSE:ABBV), for example, depends on biologic drug Humira for more than half of its revenue. However, Humira loses U.S. patent protection in 2016. AbbVie even petitioned the FDA to not approve biosimilars for its blockbuster rheumatoid arthritis drug.
Bad news for companies like AbbVie Inc (NYSE:ABBV), though, means good news for ordinary Americans. Some experts predict that availability of biosimilar drugs could save as much as $378 billion over two decades.
3. Bundled payments
It’s no secret that Medicare is in trouble. Medicare’s trustees say that the hospital program will become insolvent by 2024. Something has to be done.