What is ObamaCare (the Affordable Care Act)?
You’ve heard of ObamaCare, but what is ObamaCare exactly? ObamaCare (AKA the Affordable Care Act) is a US law aimed at reforming the American health care system. ObamaCare’s main focus is on providing more Americans with access to affordable health insurance, improving the quality of health care and health insurance, regulating the health insurance industry, and reducing health care spending in the US.
What Does ObamaCare Do?
The Affordable Care Act does a number of important things including offering Americans a number of new benefits, rights, and protections in regards to their healthcare, and setting up a Health Insurance Marketplace where Americans can purchase federally regulated and subsidized Health Insurance during open enrollment. The law also expands Medicaid, improves Medicare, requires you to have coverage in 2014 and beyond, and contains some new taxes and tax breaks, among other things.
The Politics of ObamaCare
President Obama may have signed the Affordable Care Act into law, but the truth is ObamaCare is the result of decades of ideas from both sides of the isle and the health care industry. The idea of an individual mandate was first presented by current opponents of the law the Heritage Foundation in 1989. ObamaCare itself was in fact modeled after “Romney Care”, which is the nickname for the health care reform law implemented in the State of Massachusetts by then Governor Mitt Romney.
ObamaCare: What is it, and What Does it Mean for American Health Care?
So what is ObamaCare and what does it mean to you? There are really only a few things you need to know about the Affordable Care Act.
• Every year during an annual open enrollment period folks can obtain coverage through the health insurance marketplace, or Shop Outside Of The Marketplace. This year open enrollment starts on November 15h, 2014 and ends February 15th,2015.
• Many Americans making under 400% of the federal poverty level (FPL) will qualify for cost assistance subsidies through the marketplace. Cost assistance comes in three forms: Premium tax credits for reduced premium costs, cost sharing subsidies for reduced out-of-pocket costs, and Medicaid and CHIP.
• The Affordable Care Act contains over a thousand pages of reforms to the insurance and health care industries in order to combat rising health care costs and to provide affordable health insurance to more Americans. Despite it’s length and complexity, most of the important reforms are contained within the first 140 pages of the law. Check out our summary of the many titles and sections of the Affordable Care Act.
• Before the law you could be denied coverage or treatment because you had been sick in the past, be charged more because you were a woman, be dropped mid-treatment for making a simple mistake on your application, and had little or no way to fight insurance company appeals. Today all Americans have access to a large number of unprecedented new benefits, rights, and protections.
• As of 2013 there were around 44 million Americans who went without health insurance (about 16% of the population). The majority of uninsured are working families and those who simply cannot afford health insurance. One of the major things ObamaCare does is help these individuals to get health insurance through expanding Medicaid eligibility and offering cost assistance through health insurance marketplaces. By the end of open enrollment 2014 less than 13% of Americans were uninsured.
• The Affordable Care Act reforms Medicare. This includes offering Medicare recipients the same new benefits, rights, and protections as everyone else as well reforming many aspects of the Medicare system including cuts to aspects of the program that weren’t working. Medicare isn’t part of the marketplace, if you have Part A or Part C your are considered covered.
• Small businesses with less than 25 full-time equivalent employees making less than $25,000 in average annual wages. Learn more about ObamaCare’s subsidies.
• As of 2016 large employers will have to provide health coverage to full-time workers. This will help to provide coverage to those who aren’t covered by subsidized private insurance or the expansion of Medicaid. Learn more about the employer mandate.
• Starting in 2014 most non-exempt Americans have to maintain minimum essential coverage throughout each year, get an exemption, or pay a per month fee on their year-end federal income taxes for every month they go without coverage. Learn more about the “individual mandate” that requires you to obtain coverage or pay a fee.
• There are many exemptions to the individual mandate to obtain insurance, including a “short coverage gap” exemption which allows anyone to go without coverage for less than three months in a row without being responsible for the fee. Make sure to sign up during open enrollment and to have no more than “a less than a three month” coverage gap per year to avoid the fee.
What is the ObamaCare Health Insurance Marketplace?
The health insurance marketplace (also known as an exchange) is an online price comparison website where Americans can Shop For Affordable Quality Insurance and receive cost assistance for lower premiums, reduced out-of-pocket costs, or even qualify for Medicaid and CHIP. Each State has their own health insurance marketplace, find your state’s Health Insurance Marketplace now.
Those making under 400% of the federal poverty level (FPL) may qualify for cost assistance through the marketplace. 400% of the federal poverty level is roughly $46,000 for individuals and $93,500 for families. Cost assistance is only available through your State’s marketplace. Find out more about what ObamaCare will cost you. Many Americans will be eligible for subsidized health insurance costing anywhere from 2% – 9.5% of their Modified Gross Adjusted Income (or even free coverage via Medicaid and CHIP).
Health insurance must be obtained during open enrollment. Open enrollment for 2014 in the ObamaCare Health Insurance Marketplace ended March 31st, 2014. You will either need to wait until open enrollment 2015 which starts November 15th, 2014 or qualify for a special enrollment period to get covered by the marketplace in the meantime.
Apply at healthcare.gov during open enrollment, or apply for a special enrollment period, to see if you are eligible for financial assistance for lower premiums, reduced out-of-pocket costs, or even Medicaid (Medicaid eligibility is expanded in many States).
Generally as long as you enroll during open enrollment each year you’ll avoid owing the per-month Shared Responsibility Payment for not having coverage for at least one day in a given month. Other exemptions can be used to go longer periods of time without owing the fee, some exemptions even extend the entire year. You can still get coverage and cost assistance, even if you qualify for an exemption.
The Health Insurance Marketplace is only open during each years open enrollment period unless you qualify for a special enrollment period. To avoid the penalty make sure you obtain coverage during open enrollment and maintain it throughout the year. Insurance purchased before the 15th of each month starts on the first of month following the next month after you have paid your premium.
Find out how you, your family, and your business can qualify for federally subsidized health insurance. Download our free ObamaCareFacts.com ebook to learn more about the Marketplace and open enrollment.
What Does President Obama Want Us to Understand About ObamaCare?
President Obama explains that most of the 85% of Americans with health insurance are already experiencing the bulk of what the program has to offer and have been since 2010. The individual mandate, employer mandate and health insurance marketplace that started in 2014 almost exclusively affect uninsured Americans and those who don’t like their insurance.
That being said new essential health benefits and preventative services at no out-of-pocket costs, mandatory coverage for pre-existing conditions, the elimination of annual limits, Medicaid expansion and more kicked in starting 2014 on all plans without a grandfathered status. As of 2015 most of the laws major provisions are in place with 11.4 million Americans covered and in 2014 health care spending grew at the slowest rate on record (since 1960). Meanwhile, health care price inflation is at its lowest rate in 50 years.
What Else Does ObamaCare Do?
Now that we know what ObamaCare is, it’s time to find out what else health care reform under the Affordable Care Act does beyond the key aspects of the law explained above. Here are some other important aspects of the law:
• ObamCare doesn’t just affect people directly, it actually contains many cost curbing provisions that have helped to reduce the growth of Medicare spending and healthcare spending in general.
• ObamaCare improves the quality of care that Americans receive by providing better preventative and wellness services and raising the standards of basic health care coverage.
• ObamaCare eliminates pre-existing conditions and gender discrimination meaning no one can be charged more or be dropped from their health insurance coverage for health or gender related reasons.
• ObamaCare gives tens of millions of low-income and middle-income Americans access to quality health care by providing discounts through the Health Insurance Marketplace (also known as a Health Insurance Exchange). Find out exactly what the Health Insurance Marketplace is, and how it works.
• Although the Affordable Care Act (ObamaCare) was signed into law in 2010, the health care reforms it enacts roll out year by year until 2022. Many of the biggest reforms don’t kick in until 2014. Find Out More About ObamaCare Benefits and Services.
• ObamaCare helps to ensure that Health Care Coverage is available to any legal U.S. resident who cannot otherwise obtain “quality” healthcare through their employer. Your access to health care is no longer in the hands of health insurance companies.
• ObamaCare gives American employers with over 50 full-time equivalent employees the choice between providing insurance that meets the standards of ObamaCare or paying a penalty. This penalty helps to offset the cost of employees who aren’t covered through their employer to purchase insurance through the public health insurance exchanges instead of using emergency services.
• Employers with less than the equivalent of 25 full-time equivalent employees may qualify for tax credits, tax breaks and other assistance for insuring employees through the Health Insurance Marketplace.
• ObamaCare increases consumer protections. These help to protect you from being dropped while sick, denied care due to lifetime limits, denied care for pre-existing conditions, and offers Americans a better legal standing against health insurance companies.
• Unless you make over $200,000 individual / $250,000 as a family or small business you are exempt from almost every tax ObamaCare levies aside from the mandate to obtain insurance.
• ObamaCare requires that all Americans have health insurance either through a private provider or through a state or federally assisted program. If you don’t have insurance you must pay a tax equal to 1% of your income in 2014 and 2.5% in 2016.
• ObamaCare expands Medicaid to over 15 million uninsured low-income Americans.
• The new health care law aims to reform the health care industry by cutting out waste, reallocating where government funding goes, fixing what doesn’t work, and most of all ensuring health care for Americans.
Now that we’ve answered the question “What is ObamaCare?” it’s time to take a look at the ObamaCare Facts and find out what its many provisions do for you.
What is the Affordable Care Act? What is ObamaCare?