Obamacare 101: What You Need to Know About the Complex Law
Do you want to learn more about "Obamacare"? Here are answers to some of your most common questions about the new law.
What is "Obamacare"?
"Obamacare" is a new health care law that was passed in 2010. It is officially called The Patient Protection and Affordable Care Act. Sometimes it is also called the Affordable Care Act, or ACA. Much of the new law will go into effect on Jan. 1, 2014. Parts of the law have been delayed until 2015.
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What does Obamacare do?
There are many parts to the new law, but its main goal is to expand health insurance coverage. It does this in four ways:
1) It requires employers with more than 50 employees to provide health insurance or pay a fine. (This "employer mandate" has been delayed until 2015.)
2) It allows more people to be covered by Medicaid, a government program that provides health care for poor people.
3) It requires most Americans to have health insurance. This is known as the "individual mandate." (See here for a list of exemptions to the individual mandate.)
4) Each state will have a "health care exchange." Those who are not on Medicaid, Medicare (a government health insurance program for the elderly) or CHIFF (a government health insurance program for children), and do not have health insurance through their employer, will be able to purchase a health insurance plan through their state's exchange. Depending on level of income, some will receive government subsidies to purchase their insurance on the exchange.
Am I eligible for a subsidy?
The subsidies will vary depending on the insurance costs in your area. The Henry J. Kaiser Family Foundation has a calculator you can use to determine if you are eligible for a subsidy and how much that subsidy would be.
Is Obamacare just a website?
No. Obamacare is an expansive law that touches nearly every aspect of the American health care system.
What is the website for?
The purpose of the Obamacare website, Healthcare.gov, is to connect those who need health insurance with providers. When you sign up on the website (and if the website is working), the site will determine whether you are eligible for Medicaid or Medicare. If you are not eligible for either of those, the website can tell you if you are eligible for a subsidy to purchase health insurance, and will provide you with options to purchase insurance from a private insurance company.
Other than the website, is there any other way to apply for Obamacare?
Yes. You can apply by phone or mail. There may also be a community center near you where you can get assistance.
Is the website working?
No. Most of the website's problems on the "front end," where users fill out an application, have been fixed. But, the website still has problems on the "back end," where those applications are matched to the insurance companies that will provide the insurance. By one estimate, one in three of those who have enrolled on the website will not have insurance on Jan. 1 due to the "back end" problems.
I've heard some people are losing their insurance because of Obamacare. Is that true?
Sort of. Obamacare has certain "coverage mandates." Health insurance policies must contain certain benefits (see below) under the new law. If an insurance policy does not contain those mandated benefits, the company must cancel that policy. This does not mean that customers will lose health insurance. The insurance companies will sign up their customers with new policies that carry the mandated benefits.
(Some policies that have not changed since before the law passed will be "grandfathered" in, meaning they will be allowed to continue even if they do not include the mandated coverage.)
Is Obamacare really more expensive than what people previously paid for health insurance?
Some will pay more and some will pay less. For those eligible for a subsidy, their costs are likely to go down. Also, those who currently pay for health insurance and are now eligible for Medicaid because of the Medicaid expansion will see their costs go from something to zero.
For many others, though, premiums and deductibles will go up because of Obamacare. By one estimate, premiums will increase, on average, by 41 percent.
Will I lose my doctor?
Some people will no longer by able to see their current doctor because of Obamacare. There are several ways this could happen. For instance, if your employer drops their coverage because of the new law and you must now get insurance on the exchanges, your current doctor may not be in the network of your new insurance. Also, if you no longer pay for insurance because you are now eligible for Medicaid, your current doctor may not serve Medicaid patients.
Does Obamacare do anything to lower health care costs?
There are parts of the law aimed at reducing health care costs. The main cost reduction tool is the Independent Payment Advisory Board (famously called a "death panel" by Republican vice presidential candidate Sarah Palin during the 2008 election.)
The IPAB is a board of 15 health care experts. It will make yearly recommendations to Congress to reduce the growth of healthcare costs. Congress can accept the recommendations, or come up with its own cost saving measures. If Congress fails to do anything, the board's recommendations will automatically go into effect.
There are restrictions on the types of recommendations the IPAB can make. It is not allowed, for instance, to reduce costs by rationing care.
Obamacare also set up some experimental studies aimed at learning how to lower healthcare costs.
What additional benefits will be covered?
There are a number of benefits that must be covered under almost all new health insurance policies. (As mentioned above, a few old policies will be allowed to continue.) According to Healthcare.gov, these 10 "essential health benefits" include:
1. Ambulatory patient services (outpatient care you get without being admitted to a hospital)
2. Emergency services
3. Hospitalization (such as surgery)
4. Maternity and newborn care (care before and after your baby is born)
5. Mental health and substance use disorder services, including behavioral health treatment (this includes counseling and psychotherapy)
6. Prescription drugs
7. Rehabilitative and habilitative services and devices (services and devices to help people with injuries, disabilities, or chronic conditions gain or recover mental and physical skills)
8. Laboratory services
9. Preventive and wellness services and chronic disease management
10. Pediatric services
What will happen if I don't get health insurance?
You will be fined by the IRS. In 2014, the fine will be $95 or one percent of household income. In 2016, it increases to $695 or two percent of household income. After that, the fine will be determined by a cost-of-living formula.
What if I don't pay the fine?
The only way the IRS is allowed to collect the fine is to take it out of your income tax refund. If you do not receive a refund, the IRS has no mechanism to force you to pay the fine. If you do not get a refund, and do not pay the fine, though, the IRS can still charge you, with interest, in later years.
Is Obamacare available in all 50 states?
Mostly. There is a health care exchange in all 50 states (some are set up by the state government, others are set up by the federal government). The individual mandate, employer mandate and coverage mandates apply to all 50 states.
The expansion of Medicaid eligibility, however, will not be available in all 50 states.The U.S. Supreme Court struck down a provision in Obamacare that would have severely punished states that declined to participate.
Some states, all led by Republicans, have declined to participate in the Medicaid expansion. Some of those states are working on, or have implemented, alternatives. But in some states, there will likely be some lower income Americans who are neither eligible for Medicaid nor eligible for subsidized insurance on Jan. 1.
If I move, do I need to reapply for health insurance in my new state even though I had it in another state?
If you have private health insurance through your employer or through an exchange and you move to a different state, yes, you must reapply. Health insurance companies may not sell insurance across state lines. This is a law that predates Obamacare, and was not changed by Obamacare.
I have a pre-existing medical condition. Can I still get health insurance?
Yes. Under Obamacare, insurance companies may not discriminate based upon pre-existing conditions.
