How Will Obamacare Affect You?
Major changes to U.S. healthcare have rolled out in January 2014. But what is Obamacare really? What changes will be made? And, most importantly, how will they affect you and your family? House Call Doctor explains in Part 1 of her Affordable Care Act series.
Whether we like it or not, there are major changes in American healthcare that began in January 2014. Millions of Americans are now able to obtain medical coverage through the new Obamacare plans.
But what is Obamacare really? What changes will be made to existing coverage? And how will they affect you personally?
These are all questions I hear from my patients over and over, mostly because so far it seems to be a rather vague entity. No one seems to know for sure, and to be honest, I don’t think many health care workers and physicians even know exactly what’s in store for the upcoming years.
However, there are some basic elements of Obamacare that everyone should be aware of, whether you are currently insured or not. I will address the major points of the bill in today’s episode, and next week I will guide you on how to enroll in 4 easy steps.
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What Is Obamacare?
Obamacare refers to a historic 2,572-page healthcare bill that was passed on March 30, 2010 and signed by President Obama. Its official name is the Patient Protection and Affordable Care Act. Obamacare’s goal is to change the way insurance companies cover consumers and the way consumers can obtain coverage. If you have time (and patience), you can read an almost 1,000-page “synopsis” of this new law here. Otherwise, listening to or reading the rest of this episode will give you a brief overview.
What You Need to Know About Obamacare
Here are some of the major points of this bill that everyone should be aware of:
The Individual Mandate: Beginning in 2014, most Americans will have to either purchase health insurance from their employer or the healthcare marketplace, or pay a tax penalty of $95 per adult or 1% of your gross income (up to a max of the annual cost of the least expensive plan option), whichever is higher. For people with children, the penalty for not covering a child will be $47.50. You’ll be paying this penalty on your 2015 taxes. This penalty will increase in the following years and by 2016, the penalty will be $695 or 2.5% of your gross income for an individual, whichever is greater.
10 Essential Benefit Requirements of Health Plans: You cannot just select any health insurance plan; it must meet certain minimum requirements. This means that it must cover a minimum of these 10 essential health services:
- Doctor visits
- Hospital stays
- Emergency care
- Maternity care
- Children’s care, including dental and vision
- Prescriptions
- Medical tests
- Mental health and substance abuse disorder care
- Rehab services and devices
- Preventative services (such as pap smears, mammograms, colonoscopies, etc.)
Required Marketplace: This law requires each state to set up access to a one-stop-shop marketplace (or you may have heard it referred to as the “exchange”), where individuals (and small businesses with less than 50 employees) can compare and purchase health insurance – either via the internet, in person, or by phone. This way, you will be able to compare apples to apples when selecting health insurance. This was designed to benefit consumers rather than insurance companies. To find out how to access your state-specific marketplace, go to www.healthcare.gov/what-is-the-marketplace-in-my-state/.
Consumer Protection: Your coverage cannot get dropped or denied if you have a pre-existing medical condition, such as diabetes or cancer, or if you get sick. Imagine getting diagnosed with a cancer but then you find you are unable to obtain health insurance to treat it? This law will eradicate the insurance companies’ ability to deny coverage.
Medicaid Expansions: Many states have also expanded their Medicaid programs to cover more people who may not have been eligible previously for free health coverage. This eligibility can also be found on your state’s marketplace website.
Federal Financial Assistance: The government will help subsidize your monthly health insurance premiums based on your income on a sliding scale. So those who earn less will be able to get the largest subsidies, and will pay less out of pocket for their healthcare. Each state may have different income cut-offs for this.
As an example, here’s a breakdown of who may actually qualify for Medicaid or federal assistance to pay for their monthly premiums in the state of California:
| Country | ||
|---|---|---|
|
Number of People In the Household |
Medi-Cal Coverage: If Your Income is Less Than |
Federal Assistance: If Your Income is Between |
|
1 |
$15,857 |
$15,857 – $45,960 |
|
2 |
$21,404 |
$21,404 – $62,040 |
|
3 |
$26,952 |
$26,952 – $78,120 |
|
4 |
$32,500 |
$32,500 – $94,200 |
|
5 |
$38,047 |
$38,047 – $110,280 |
Table Recreation from www.CoveredCA.com
Young Adults: Young adults can now be covered under their parents’ health insurance plan until they turn 26 years old.
Small Businesses: Businesses with less than 50 employees will also be able to purchase health insurance through the marketplace. Businesses with less than 25 employees may qualify for a federal tax credit designed to reduce premium costs. In 2016, this will extend to companies with less than 100 employees.
Rules for Insurance Companies: Insurance companies now have to abide by certain rules designed to protect the consumer:
-
They must give a reason for any premium increases.
-
They must spend 80% of the finances they receive from premiums on delivering high quality care, not on advertising and salaries.
-
They cannot set a lifetime dollar limit a person can spend on their healthcare costs.
-
They must all provide preventative care and screenings, breast-feeding support, contraception, and domestic violence screening without charge to the patient.
-
All newly sold insurance plans must provide the 10 essential health services listed above.
Who Will Pay For It?
Who is going to pay for all of this “affordable” health care, you may be wondering? Mandating that all Americans have health coverage is truly a humanitarian and worthy goal. Getting to know even one patient with cancer who simply cannot afford to get treatment for a lack of health coverage is enough to make a lasting impression. Likewise, holding insurance companies accountable and forcing them to abide by a set of rules and standards has been a much needed change.
However, all of this comes with a cost. There are various tax increases in the works to help pay for Obamacare. The greatest one is the Medicare tax that you’ll see deducted from your paycheck — it will mostly affect individuals who make more than $200,000 per year and families who make more than $250,000. There are various others, including taxes on pharmaceutical companies, health insurance companies, and tanning salons, along with a new investment income tax and fewer allowable medical deductions.
Open enrollment for the 2014 year ends March 31, 2014. That means, if you do not enroll by this date, you not only will be required to pay the tax penalty but you will also be left without coverage until 2015. If you’ve been procrastinating, don’t despair — tune into next week’s episode when I’ll discuss exactly what you need to do to sign up in 4 easy steps.
Resource List
www.hhs.gov/healthcare/facts/bystate/Making-a-Difference-National.html
www.medicaid.gov/AffordableCareAct/Affordable-Care-Act.html
Be sure to check out Money Girl’s excellent episodes on this topic: What Is Obamacare? 8 Facts You Should Know and Who Can Get Health Insurance Through Obamacare?
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Please note that all content here is strictly for informational purposes only. This content does not substitute any medical advice, and does not replace any medical judgment or reasoning by your own personal health provider. Please always seek a licensed physician in your area regarding all health related questions and issues.
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About the Author
Dr. Sanaz Majd is a board-certified Family Medicine physician who graduated from Drexel University College of Medicine in Philadelphia. Her special interests are women’s health and patient education.
