ObamaCare (the Affordable Care Act) is a US healthcare reform law that expands and improves access to care and curbs spending through regulations and taxes.
The Affordable Care Act’s main focus is on providing more Americans with access to affordable health insurance, improving the quality of healthcare and health insurance, regulating the health insurance industry, and reducing health care spending in the US. The law contains hundreds of different provisions that address different aspects of “the healthcare crisis” in the US.
What Does ObamaCare Do?
The Affordable Care Act does lots of important things including:
- Offering Americans some new benefits, rights, and protections in regards to their healthcare
- Setting up a Health Insurance Marketplace (HealthCare.Gov) where Americans can purchase federally regulated and subsidized health insurance during open enrollment.
- Expanding Medicaid to all adults in states that embraced the program.
- Improving Medicare for seniors and those with long-term disabilities.
- Expanding employer coverage to millions of employees.
- Requiring most people to have coverage, get an exemption, or pay a fee for each month.
- Introducing new taxes and tax breaks.
TIP: Most of the major provisions in the ACA started in 2014, we only covered a few key ones above, you can learn more about the benefits, rights, and protections in the Affordable Care Act here.
The Politics of ObamaCare
President Obama signed the Affordable Care Act into law, but this program is the result of decades of ideas from both political parties and the healthcare 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 the Republican Governor Mitt Romney.
TIP: Speaking of politics, Republicans have presented a new bill to replace some of the Affordable Care Act’s main provisions called the American Health Care Act. Learn more about the pros and cons of the Republican ObamaCare replacement plan that some have dubbed “TrumpCare.”
ObamaCare: What is it, and What Does it Mean for American Health Care?
So what is ObamaCare, the ACA, and what does it mean to you? There are some facts that you need to know about the Affordable Care Act to ensure you avoid the fee and get affordable coverage.
• Every year during an annual open enrollment period people can obtain coverage through the health insurance marketplace, or Shop Outside Of The Marketplace.
• 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 (PTCs) for reduced premium costs, Cost-sharing Reduction Subsidies (CRSs) for reduced out-of-pocket costs, and both Medicaid and CHIP.
• The Affordable Care Act contains over a thousand pages of reforms to the insurance and health care industries to combat rising health care costs and to provide affordable health insurance to more Americans. Despite its overall length and complexity, most of the important reforms are contained within the first 140 pages of the law. Look at our summary of the many titles and sections of the Affordable Care Act.
• Before the ACA passed you could be denied coverage or treatment because you had been sick in the past (had a pre-existing condition), be charged more because you were a woman, or be dropped mid-treatment for making a simple mistake on your application. You had little or no way to appeal insurance company rulings effectively. 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 were working families and others who simply could not afford health insurance. One of the major aims of ObamaCare is to 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. By 2015 the uninsured rate had fallen below 10%. Under the Affordable Care Act, the uninsured rate fell to the lowest level in recent history.
• 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 you are considered covered.
• Small businesses with less than 25 full-time equivalent employees making less than $25,000 in average annual wages are now eligible for subsidized health insurance. Learn more about ObamaCare’s subsidies.
• As of 2016 large employers had to provide health coverage to full-time workers. This helps 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 had 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 or an exemption. Learn more about the “individual mandate” that requires you to obtain coverage or pay a fee. It’s worth noting that the law in this country often forces people to have insurance for their cars, homes, businesses, etc. or be liable for fees and fines.
• 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 “one day shy of three full months” 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 (but not below 100% of the poverty level). 400% of the federal poverty level is $48,240 for individuals and $98,400 for a family of 4 buying 2018 coverage.
100% of the poverty level is between $12,060 for an individual and $24,600 for a family of 4 in 2017 (for those using Medicaid, this number adjust in late January 2018).
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 of anywhere from 2% – 9.5% of their Modified Gross Adjusted Income (or even free coverage via Medicaid and CHIP).
TIP: The poverty levels adjust every year. Make sure to check out the most recent poverty levels.
Health insurance must be obtained during open enrollment. Open enrollment for 2018 health plans sold on the Health Insurance Marketplace runs from November 1st, 2017 to December 15th, 2017 (in most states). Each year open enrollment may have different and end dates.
Individuals and families without access to employer coverage, Medicaid/CHIP, Medicare or another type of “minimum essential coverage” need to enroll during open enrollment (or qualify for a special enrollment period).
Individuals and families are well advised to apply at healthcare.gov during open enrollment, or apply for a special enrollment period, to see if they are eligible for financial assistance for lower premiums, reduced out-of-pocket costs, or even Medicaid (Medicaid eligibility has been expanded in many States).
As long as you enroll during open enrollment each year, you will 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 extend the time during which you can avoid a fee for longer periods of time; 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 year’s 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 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?
Back in 2014, when addressing concerns over “what will the Affordable Care Act be like for America,” President Obama explained that most of the 85% of Americans with health insurance had already experienced the bulk of what the program had to offer and had been experiencing it since 2010 (as some provisions kicked in in 2010 to provide immediate relief).
Meanwhile, most of the taxes and regulations put in place in 2010 and beyond mainly affected those with higher incomes and those profiting off the healthcare industry (in terms of direct costs at least).
By 2015 new essential health benefits and preventative services at no out-of-pocket costs, mandatory coverage for pre-existing conditions, the elimination of annual coverage limits, and more were officially in place on all plans without a grandfathered status.
By 2016 all large employers will cover 95% of full-time employees, and by 2022 all of the PPACA’s provisions will be in full effect.
In other words, here in 2017 – 2018 we don’t have to wonder what the Affordable Care Act will be like, we have all been experiencing it since 2010 to some extent and since 2014 in general for most of its provisions.
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:
• ObamaCare, the ACA, contains many cost-curbing provisions that have helped to reduce the growth of Medicare spending and healthcare spending in general. For instance, Accountable Care Organizations (which incentivize Medicare healthcare providers are to provide quality over quantity) saved over $400 million collectively in 2014. The 80 /20 rule (which requires insurers to spend at least 80 cents out of every dollar on care) lead to $9 billion in savings for consumers. Also, new regulations for hospitals led to 50,000 fewer lost lives from hospital-acquired conditions and $12 billion in savings according to a 2015 report. See more examples of how the cost controlling measures are working or learn more about the cost controlling measures.
• ObamaCare, the ACA, 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, the ACA, eliminates pre-existing conditions and gender discrimination. No one can be charged more or be dropped from their health insurance coverage for health or gender-related reasons.
• ObamaCare, the ACA, 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 didn’t start until 2014. Find Out More About ObamaCare Benefits and Services.
• ObamaCare, the ACA, 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 entirely in the hands of health insurance companies.
• ObamaCare, the ACA, gives American employers with over 50 full-time equivalent employees the choice between providing insurance that meets the standards of ObamaCare or paying the 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 to help them insure employees through the Health Insurance Marketplace.
• ObamaCare, the ACA, increases consumer protections. These help to protect you from being dropped while sick, denied care due to lifetime limits, or denied care for pre-existing conditions. These offers Americans more legal power against health insurance companies.
• Unless you make over $200,000 as an individual or $250,000 as a family or small business, you are exempt from almost every tax ObamaCare levies except the mandate to obtain insurance.
• ObamaCare, the ACA, requires that all Americans have health insurance either through a private provider or 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, the ACA, expands Medicaid to over 15 million previously uninsured low-income Americans.
• The new health care law has begun to reform the healthcare industry by cutting out waste, reallocating government funding, fixing what doesn’t work, and most of all, ensuring health care for Americans.
We hope this answers the question “What is ObamaCare?” Now 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?