A Quick Overview of ObamaCare and How it Works
The following ObamaCare Summary is a quick overview of what you need to know about President Obama’s health care reform efforts under the Affordable Care Act.
The summary includes a breakdown of changes to the way healthcare works in the U.S., new ways to buy regulated health insurance, how to get cost assistance, and other important aspects related to the law.
Obama Health Care Summary – A Summary of What You Need to Know About the Affordable Care Act
ObamaCare, officially called the Patient Protection and Affordable Care Act (PPACA) but more often called the Affordable Care Act (ACA) for short, reforms the health insurance industry and the American health care system as a whole. The law contains over a thousand pages of provisions that give Americans more rights and protections and expand access to affordable quality health care to tens of millions of uninsured. Learn more about the PPACA by reading our Summary of Provisions of the Patient Protection and Affordable Care Act.
The Patient Protection and Affordable Care Act was signed into law March 23rd, 2010 and upheld by a supreme court ruling on June 28, 2012. During the ruling, the law was changed to allow states to opt-out of expanding access to Medicaid. Learn more about Medicaid Expansion and how this one little change has left millions without health insurance.
The law requires all Americans have health insurance by 2014 (or pay a per month fee for each month without minimum essential coverage). Although this shared responsibility provision is unofficially called an individual mandate, it was ruled to be in fact a tax and not a mandate by the June 28, 2012, Supreme Court ruling.
ObamaCare doesn’t change the way insurance is obtained, you can still buyPrivate Insurance, get employer-based insurance, or get insurance through a government program like Medicaid or Medicare. ObamaCare does add a new way to purchase insurance, however. Insurance can now be purchased through state Health Insurance Marketplaces where shoppers can receive cost assistance and get apples-to-apples comparisons of plans.
Please take into account that each insurance type has its own open enrollment period unless you qualify for a special enrollment period. Therefore, certain types of insurance can only be purchased during certain times of the year.
- Open enrollment for 2016 closed on January 31st, 2016.
- Open enrollment for 2017 goes from November 1st, 2016 to January 31st, 2017.
If you have a marketplace plan from the previous year, you’ll need to verify your plan and cost assistance during open enrollment, and preferably before December 15th each year.
A Summary of ObamaCare and Insurance
The Affordable Care Act requires that all Americans, purchase a Private Health Care plan, get an exemption or pay a tax penalty on their federal income taxes (see ObamaCare’s Individual Mandate for more details). Americans who cannot afford health insurance will most likely either qualify for Medicare, Medicaid, CHIP or get assistance in the form of tax credits or assistance with up-front costs through their state’s Health Insurance Exchanges (AKA Marketplace). If insurance is still not “affordable” after assistance or if it costs more than 8% of your family’s income for self-only coverage, you may be exempt from the Individual Mandate.
Or check out a detailed ObamaCare Facts timeline of every protection, benefit, and a tax laid out by the Affordable Care Act from 2010 to 2022. See what is really in the law for yourself using our Health Care Reform Timeline.
Or check out our Summary of Titles in the Affordable Care Act for an overview of each title contained within the law.
Or check out our Summary of Provisions of the Patient Protection and Affordable Care Act for a summary of each section of each title for a more complete and detailed read.
Or for the very brave and interested you can check out the Full Text of the Patient Protection and Affordable Care Act.
This PDF from the institute of medicine gives a wonderful overview of what you need to know to get insurance under the Affordable Care Act.
A Summary of ObamaCare New Benefits & Cost Assistance
Many Americans will keep their employer-based or current insurance while low-to-middle income Americans will be able to purchase federally regulated and subsidized insurance through online health insurance exchanges.
The law also implements unprecedented benefits, rights and protections leading to better quality and more Affordable Health Insurance. New provisions to protect consumers include insurance companies no longer being able to deny individuals for preexisting conditions or being able to drop their coverage for being sick, free preventive treatments, and the elimination of discrimination, and annual and lifetime limits on essential health benefits. All plans sold on our off the insurance exchange must now include ten essential benefits and have a minimum actuarial value.
ObamaCare Coverage Summary
Regardless of what you pay, ObamaCare greatly improves the health care industry including the minimum standards of what health insurance must cover. 44 million Americans who currently do not have health insurance are projected to be covered under new health care law. Other coverage milestones include better preventive care, women’s health services, better care for seniors and expanded coverage of our nations poorest. The sheer number of new reforms, many of which you don’t hear much about, can be a little overwhelming. Please take a look for yourself by checking out our Summary of Provisions of the Patient Protection and Affordable Care Act or you can just learn more about the Benefits of ObamaCare.
Did you know that ObamaCare healthcare reform technically includes the biggest middle-class tax cut for healthcare in America’s history? ObamaCare saves low to middle-income families and small businesses billions of dollars by providing reduced costs and reduced premiums to millions of Americans through marketplace subsidies. Not everyone will get cheaper health insurance, but many making less than 400% of the Federal Poverty Level will.
A Summary of Health Insurance Exchanges / Marketplaces
The new health care law makes Health insurance available to most uninsured low and middle-income individuals through a health insurance exchange also known as a health insurance marketplace. The exchanges are state or federally run online marketplaces where customers can shop for affordable quality health insurance. Since November 15th, 2014 small businesses with less than 100 full-time employees can also use the exchange to purchase insurance for their employees (the small business marketplace is called the SHOP exchange). Small businesses can earn tax breaks for up to 35% of premiums. The Health Insurance Marketplace is closed outside of open enrollment. Open enrollment 2016 ran from November 1st, 2015 to January 31st, 2016. Consumers can switch plans, enroll, apply for cost assistance, or verify information during the next open enrollment. Open Enrollment for 2017 will begin November 1st, 2016.
(ObamaCare Summary Image is public domain)
Medicaid and Medicare Reform Summary
ObamaCare also expands Medicaid to provide health coverage to 15.9 million uninsured Americans who are falling in between the cracks of being able to afford insurance and qualifying for Medicaid. Obama’s health care plan overhauls Medicare as well adding new benefits, expanding coverage, fighting fraud, cutting costs, and improving care for patients.
Want more than a Summary of ObamaCare, get the full text and learn more about the ObamaCare Bill.
ObamaCare Overall Cost Summary
The ObamaCare cost will be around $1.1 trillion over the next ten years according to CBO reports. This number may seem big but the result has been a reduction of our national deficit by $143 billion dollars!
Summarizing the cost of ObamaCare for individuals is trickier; those who make over 400% of the poverty line may pay about what they do now (taking into account premium costs rise annually), while those under will most likely pay less, due to financial assistance. Many uninsured young adults will get a plan for $100 or less. Given that the ACA embraces the free market and is based on income and region, everyone pays something different for their needs and specific situation. Learn more about ObamaCare’s Cost.
A Summary of ObamaCare and Small Business
Small businesses with under the equivalent of 50 full-time equivalent employees and who make less than $250,000 began to reap the benefits of ObamaCare getting better access to more affordable quality insurance. Those with over 50 full-time equivalent employees or those who make over $250,000 faced the “employer mandate” beginning in 2015 and a Medicare Part A increase. Small businesses under 25 full-time employees who chose to insure employees received tax breaks of up to 35% for 2013 and 50% for 2014 through the SHOP.
FACT: The online portion of the SHOP didn’t open until November 2014, but small businesses could still use an agent to help them claim tax credits.
Some people say this will hinder job growth and hiring. This has been proven true at many companies who are cutting worker hours to part-time to avoid insuring workers. On the other side of the coin, ObamaCare creates tens of thousands of healthcare and Government jobs.
Find out what ObamaCare means to businesses and their employees.
A Summary of How ObamaCare is Paid For
In summary, ObamaCare will be paid for through budget cuts, taxes, and government funding. This includes a .9% Medicare tax and unearned income tax (on income over $200/$250k), cuts to wasteful spending, a tax on insurance companies and a tax on employers with over 50 full-time employees who do not supply their employees with affordable quality health care. This is just a summary of how ObamaCare is paid for. Learn More about ObamaCare Taxes.
It’s important to note that the taxes work on a sliding scale, so the more you make, the more you pay. Nearly 99% of families and 97% of small businesses will benefit from ObamaCare. While over 70% will save money and have better coverage by being able to purchase their healthcare through a competitive insurance exchange or qualify for Government program.
Health Care Reform Summary
ObamaCare reforms everything from practices of insurance companies to ensuring better quality health care for all Americans. A summary of all the reforms within ObamaCare is available here at our Health Care Reform Timeline.
We have only touched upon some of the benefits of the Affordable Care Act in this ObamaCare summary. The law itself is an accumulation of many different reforms that improve our healthcare system and provide affordable health insurance to all Americans. Read more about the specifics of ObamaCare or read a more detailed overview of what the ObamaCare has to offer in our Affordable Care Act Summary.
Obama Health Care Summary – Costs, Coverage and More.