(This article was last updated on October 12, 2017)
A lot has changed since we published this intro to the Affordable Care Act almost four years ago. Back then a big goal was simply explaining to people that the ACA and Obamacare were the same thing. It is definitely deflating to be able to go back and see how what we originally thought to be big problems facing the ACA, are trivial in comparison to what it is facing now. Not just from its political opponents, but from the industry itself. Carriers are exiting the exchanges, the plans being offered to consumers are becoming very difficult to find value in, other than being what is in effect "catastrophic coverage" plans. It's a giant mess, and the political maneuvering just doesn't seem to ever let up.
Healthcare reform needs to be revitalized with a truly bipartisan effort, and hopefully, Republicans and Democrats can stop the infighting and grandstanding long enough to remember that anyone reading this website, does not have the coverage options that they do as public officials and employees.
With the passage of the Affordable Care Act in 2010, millions of uninsured and insured Americans alike gained access to better and more affordable healthcare options than had previously been offered under old regulations. Despite the benefits of the ACA, which is commonly referred to as Obamacare, many people are still hesitant to trust a government-funded and government-run program that requires taxpayer support. In fact, Obamacare has become so controversial that there is a wide range of rumors and false information being spread throughout the Internet about its provisions and what it means for United States citizens. If you've been wondering how the new healthcare law will affect you, your family or your business, then read on for detailed information on the role and implications of the Affordable Care Act. If you are wondering, "How will Obamacare affect me?", well good news, we are the independent authority on the ACA, also known as Obamacare.
Health Insurance Distribution in the United States Pre-Obamacare
First, let's take a look at the current status of health insurance in America. According to a study conducted by the Kaiser Family Foundation in 2011, the majority of Americans had some type of health insurance coverage. Approximately 84 percent of the U.S. population in 2011 was insured either through their employers, through private insurers or through government assistant programs such as Medicaid. The following is a detailed breakdown of the actual numbers:
- Employers accounted for 49 percent of the insured population.
- Medicaid, Medicare and other assistance programs made up 30 percent.
- Only 5 percent of the insured population was self-insured through private sources.
- The remaining 16 percent of Americans were uninsured.
You might not consider 16 percent to be a very high percentage, but consider this: In 2011, the population of the United States was approximately 310.5 million according to the U.S. Census. If 16 percent of the population had no insurance, then that means roughly 50 million people did not have access to quality and affordable healthcare. For some perspective, the number of people without health insurance at the time of the Kaiser study was greater than the entire population of California and New York City combined. You can see why healthcare needed to be reformed. Without reform, millions of people living in the most developed nation in the world would die every year of preventable medical conditions.
During the 2014 open enrollment period, more than 8 million Americans enrolled in health insurance on either the state or federal marketplace. This brought the percentage of uninsured Americans down to approximately 13%. The Congressional Budget Office estimates that enrollment numbers for the 2015 open enrollment period will increase to 13 million people.
Essential Healthcare Coverage and Added Benefits
While the Affordable Care Act was created to improve access to healthcare for lower income families, the law actually benefits every citizen in some way. People who earn more will see less of a benefit from the new law because they already enjoyed good healthcare options at their income level while people who earn less will see greater improvements. Regardless of your income level, you are now entitled to what the government calls "essential health benefits," of which there are ten:
- Ambulatory Patient Services or outpatient care
- Emergency treatments
- Hospitalization and/or surgery
- Laboratory services
- Maternity and newborn care pre- and post-labor
- Mental health care services
- Pediatric service
- Prescription medication
- Preventative care such as wellness checkups and screening
- Rehabilitative care including rehabilitative devices
These ten essential benefits must be included in your healthcare plan whether you purchase a plan through your employer, enroll in the Federal Marketplace or choose government assistant programs such as Medicare. Preventative care also includes treatments used in chronic conditions like back pain, which means your chiropractic visits will be covered if they're used to treat a medically diagnosed condition. In addition, children must have access to dental and vision care under the law.
Along with the Essential Health Benefits, you can now expect better accuracy and transparency when it comes to your plan. Choosing a healthcare plan has always been difficult because paperwork is so complex. From insurance jargon to confusing percentages, even the most diligent people sometimes misunderstood their coverage and were left without recourse when an insurer denied coverage for a procedure or treatment. Now, you can rest easy knowing that you're getting the coverage you need. Additional benefits under the Affordable Care Act include:
- A clear and concise explanation of your coverage
- Approval for insurance regardless of a Pre-existing Condition
- Lack of limits on lifetime benefits or annual totals
- Consistent premiums regardless of health status or gender
- Free preventative services including wellness checks for women
- Widespread access to family planning treatments
Keep in mind that these benefits only apply to non-grandfathered plans. Some insurers will still adhere to old regulations until 2017 if your plan is considered under grandfather status. For more information about grandfathered plans and how to enroll in a better plan, check out the official site of the Affordable Care Act or contact your local healthcare representative.
At the outset of the ACA, many people worried about whether they could still continue to see their same physicians under the new law. In short, you can still see your same doctor. However, your doctor must be participating in the plan that you choose as is the case with any insurance provider. Smaller networks will offer fewer choices when it comes to healthcare providers, but Obamacare may improve your choices thanks to the highly competitive nature of the program. In other words, as more insurers and networks attempt to compete with low-cost options on the government Marketplace people will have better options for getting the care they need.
What Obamacare Means to Different People
In this section, we'll take a closer look at the percentages outlined above in terms of how the new ACA affects different groups of people. While everyone receives some type of benefits thanks to Obamacare, not everyone shares equal benefits. We want to help you understand how the new law affects you depending on where you fall within the percentages listed above.
Employee-Sponsored Health Insurance
If you're a part of the 49 percent of Americans that receive insurance from your employer, then not much will change in terms of how much you pay provided that your employer upholds its end of the law. However, you will be entitled to better benefits and less discrimination when it comes to how you receive care. Better benefits include access to more comprehensive mental health treatments, coverage for adult dependents up to 26 years old and no-charge preventative options like yearly health screenings.
You should be aware that employers must adhere to guidelines set forth by the Affordable Care Act. Essentially, large companies that employ more than 50 full-time employees must provide healthcare coverage for those employees. If you work full-time for large company, then you must be offered healthcare unless your company chooses to incur a penalty fine. Companies that provide health insurance can't offer plans that cost more than 9.5 percent of your income.
Unfortunately, many businesses have chosen to incur a fine or have reduced staff to part-time status to avoid facing fines. If you lose your insurance because of these changes, then you may be entitled to a hardship exemption to offset your monthly insurance premiums through the government Marketplace.
Smaller businesses or those that earn less than $250,000 in revenue operate under a different set of guidelines, but they still must offer health insurance unless they employ less than 25 full-time workers. In that case, the government offers tax credits to encourage small business owners to provide healthcare coverage for their staff.
If you currently have a plan with your employer but would like to check out the benefits of a plan on the Marketplace, you can do so provided that you don't require any cost assistance. If you need cost assistance, then your current plan needs to meet one of two conditions in order for you to apply for assistance:
- Your Employer-Sponsored Health Insurance requires a premium that is greater than 9.5 percent of your income.
- Your existing healthcare plan does not provide the ten essential benefits outlined by the ACA and covers no more than 40 percent of your health costs.
For part-time workers or those who work less than 30 hours per week, the law does not address healthcare coverage. In fact, some businesses have reduced their Full-time Employee staff to part-time just to undermine the system and avoid penalty charges. If you work part-time and need healthcare coverage, then you always have the option to purchase a subsidized plan on the Marketplace. Your employer may even offer assistance by providing you with an allotment to purchase insurance through the government site.
If you quit your job, get fired or become self-employed, then traditionally you might seek to obtain COBRA benefits through your previous employer. Under the ACA, you now have the option to ditch expensive COBRA benefits in favor of more affordable options on the Marketplace.
Medicare and Medicaid - How Are They affected By Obamacare
Like employee-sponsored healthcare, Medicare does not change significantly under the new law. In fact, you don't have to enroll in a Marketplace plan if you currently receive benefits from Medicare. Your benefits will either stay the same or improve depending on the type of coverage you currently receive. Additionally, the ACA seeks to prevent fraud, identify scams and weed out the waste that plagues the current system. Other benefits include:
- Protection of your existing earned benefits
- Better and more effective preventative care such as screenings for cancer and high cholesterol
- Free access to diet counseling, immunizations, mammograms, colonoscopies and other treatments
- More affordable prescriptions
- Unchanged benefits through Medigap and Medicare Advantage plans
Just as your plan doesn't change under the new law, your doctor also doesn't have to change. As long as your doctor still participates in Medicare, you can continue seeing the physician you know and trust. You can read more about Medicare, including specific plans and changes, by visiting the Medicare website or speaking with a local healthcare representative.
For those who get insurance through government assistance such as Medicaid the Affordable Care Act has expanded the benefits offered through these plans particularly where Medicaid is concerned. Because Medicaid has always been a joint effort between the federal government and state governments, the Supreme Court ruled in 2012 that individual states could opt out of the expanding benefits of Medicaid.
To date, 30 states and the District of Columbia have opted to expanded Medicaid coverage. Several states have tabled the discussion for now while the remaining states have decided against expanded coverage. To find out if your state has expanded Medicaid coverage, check out your state's insurance marketplace or the official ACA website.
Other assistance programs and programs designed for groups like Native Americans will operate normally. Interestingly, members of Congress and their staff are the only people who will be forced to obtain insurance through the government Marketplace. Individuals still have the same choices they always had.
Private Insurance Options - Mostly The Same As Obamacare
The private healthcare industry will probably experience the most change in terms of cost, benefits offered, policy updates and guidelines due to the lack of regulation prior to the implementation of Obamacare. If you pay for private insurance either because you dislike the plans offered by your employer or you're self-employed, then you may benefit significantly from a Marketplace plan.
Under the old guidelines, private insurers didn't have much regulation when it came to benefits and cost. They could drop you at any time due to a variety of reasons including sickness, annual policy limits and something as innocuous as an administrative error. However, the new law requires that private insurers adhere to the same guidelines as government-sponsored and employee-sponsored healthcare options with the added provision that private insurers must spend at least 80 percent of collected premiums on healthcare benefits. If they fail to do this, then they must send a reimbursement check for the difference to policyholders.
Thanks to new regulations, many insurers have given up on faulty practices and unfair dealings and have advised their policyholders to sign up for a Marketplace plan once their grandfathered plans expire. Unfortunately for some individuals and families, this means that insurance costs will increase over time. However, there are better benefit options that could reduce the lifetime cost of healthcare should you need to enroll in a more expensive plan.
Along with the provisions set forth in the ACA requiring the ten essential benefits, free preventative care and healthcare options for everyone including those with pre-existing conditions, private insurance plans must also meet certain conditions as follows:
- Private healthcare plans must offer similar features to plans that exist on the Marketplace. Currently, these plans are Bronze, Silver, Gold and Platinum and the Catastrophic Plan. You must be able to compare plans easily so that you can make a more informed decision about your coverage.
- Private plans must not discriminate against gender, age or health conditions. The ACA allows states to set the premium rate dependent on age provided that premiums do not exceed three times the cost for a 21-year-old person.
If you still want to purchase private insurance rather than government-sponsored healthcare coverage, then you need to stay alert when it comes to potential scam artists. Thanks to widespread confusion about the new law and its implications, many dishonest companies and individuals have attempted to sway well-intentioned people into purchasing non-compliant or fraudulent plans. Check with your state's licensing commission and research potential insurers thoroughly before enrolling in a plan.
Healthcare Options for Uninsured Americans
As mentioned above, nearly 45 million lacked insurance before the first open enrollment period in 2014. If you're part of this shockingly high number, then you understand how difficult it is to find quality healthcare without insurance. The Affordable Care Act was designed specifically to help uninsured American citizens get the treatment and preventative care they need to sustain healthy lives. If you do have healthcare coverage, then you might be surprised to learn why someone doesn't have insurance. The reasons vary and might include:
- A person's employer doesn't offer coverage or offers coverage that is too expensive
- Private insurance plans are very expensive with little to no actual benefits
- A family has too many dependents and not enough income to cover them under insurance
- A self-employed individual doesn't make enough to cover insurance premiums
- A person has health problems or a pre-existing condition that disqualified her from getting coverage
The reasons for lacking insurance are not always black-and-white, and you can see how some hardworking individuals might be denied coverage based on insubstantial reasons. Contrary to popular belief, uninsured Americans are not those who don't want or need coverage. Rather, the uninsured population might simply lack insurance due to discrepancies in the insurance industry.
Under the new law, if you need insurance but can't find affordable options directly through an insurance provider and you believe you may qualify for a federal subsidy based on your income level, then you can enroll in a plan offered through the state or federal Marketplace. Insurance agents and brokers can also assist consumers in enrolling in a subsidized plan.
If you did want to go directly to the source and enroll Off-Exchange for a private insurance policy, how would you go about doing that? You can check out one of three options for enrolling in private healthcare: use a website like this one to shop for all of the plans that are available in your geographic region, contact an insurance agent or broker, which you can do by calling one of the phone numbers on this website or using the Get Assurance™ agent communication tool, or speak directly with the insurance provider. The marketplace might be a good place to start because you can compare plans at the government level to see if you still want to enroll in a private plan. You could also speak with a broker who understands the intricacies of the ACA and can lay out the terms for you. Finally, you might want to consult directly with an insurer if you feel comfortable with the company and its reputation. The latter option probably poses the most risk simply because insurers will always be more interested in profit than in client wellness.
Keep in mind that the 2016 Open Enrollment Period started on November 1, 2015 and ends on January 31, 2016. If you do not have coverage at the close of the 2016 Open Enrollment Period you will be charged a fine for non-compliance. Details about this fine are available in a subsequent section as well as other articles on this site.
How to Make Obamacare More Cost-Effective
Despite the fact that the Affordable Care Act offers affordable plans, many American will still struggle to afford even the most basic plan due to hardship, single-parent households, low pay or other factors that prevent them from allocating their budget on something like health insurance. For these people, the ACA offers cost assistance to make plans for affordable. Cost assistance comes in the form of:
- Medicaid and existing assistance programs like those offered to veterans and Native Americans
- Insurance offered by employers as a result of the 2016 employer mandate
- Healthcare coverage provided by small businesses due to tax credits and other incentives
- Low-cost plans and a Subsidy offered through the state and federal government Marketplace
Half of the remaining uninsured citizens will be able to take advantage of government assistance programs and subsidies designed to reduce the burden of monthly premiums. To qualify for a subsidy, individuals must be legal residents of the United States, live in the United States, earn an income between 100 percent and 400 percent of the Federal Poverty Level and be free from incarceration. In addition, if insurance will cost more than eight percent of your family's adjusted gross income then you will be exempt from the shared responsibility fee imposed by the ACA.
Unfortunately, if you do not meet all of these eligibility requirements, you will not qualify for a subsidy under the ACA. You will also be ineligible for cost assistance if you enroll in an employee-sponsored healthcare plan. However, you may still apply for insurance through the Marketplace, your employer or a private source. In the case of employer-sponsored insurance, the cost of your premiums may be mitigated by employer contribution.
The new law is designed to help alleviate the stress and cost associated with inflated healthcare policies, but some have questioned its cost-effectiveness for those who truly can't afford extra monthly costs. In reality, not everyone will be able to afford insurance at first. However, over time the ACA is designed to make the insurance playing field more competitive. This means that people with lower incomes and lower resources may find an affordable plan in the future even if they can't right away. It also means that Obamacare will increase access to care provided that those who can afford insurance enroll in a qualifying plan as intended.
Understanding the Health Insurance Exchange
Throughout this article, we've referred to the federal and state marketplaces in which you can sign up for government-sponsored healthcare. For clarification, we'll go over how to use the marketplace to enroll in an insurance plan, check for cost assistance eligibility and apply for assistance programs. If you hear someone refer to the marketplace as a "health insurance exchange," then rest assured that it's the same thing. Both terms apply to the system whereby Americans can enroll in government-sponsored healthcare.
For starters, each state manages its own state marketplace exchange though some states do not sponsor a site at all. Individuals living in states without a marketplace can access government plans through the federal Marketplace hosted on the ACA website. If your state does host a marketplace exchange, then you can begin your application process by creating an account.
Using the state marketplace, you can browse through plans offered by private insurers, doctor co-ops, nonprofits and the government. The marketplace is designed to present you with clear, easy-to-understand information on your preferred insurers. Created with users in mind, the marketplace will help you compare plans and costs using a side-by-side comparison feature. You can also apply for subsidies using the same website because the site is meant to provide a "one-stop" experience for users.
People who qualify for government assistance such as Medicaid will be told via the website if they qualify. From there, they would need to visit the Medicaid website for their state and apply because the state marketplaces do not host Medicaid enrollment or applications.
You can choose from five different plans that meet your budget using the state marketplace. These plans are outlined below, but more information can be found on the ACA website:
- Bronze: This is the basic plan you can purchase, and it covers 60 percent of your healthcare costs.
- Silver: Silver plans cover 70 percent of healthcare costs.
- Gold: Gold plans cover 80 percent of healthcare costs.
- Platinum: This plan costs the most in monthly premiums but provides 90 percent coverage for health expenses.
- Catastrophic: With high deductibles, low monthly premiums and limited coverage, catastrophic plans are reserved for people under the age of 30 who need basic coverage to comply with the law but who only expect to use insurance during emergencies or people who are experiencing a hardship.
In essence, the more you pay for your monthly deductible the less you can expect to pay for co-pays and out-of-pocket healthcare costs. The marketplace will help low-income families find affordable options, but people who can afford higher premiums may not find the best deal using the marketplace. This is because the marketplace operates on a sliding scale in which those with less shoulder less of the financial burden of Obamacare and those who earn more shoulder a greater portion. In addition, families that fall within the right FPL range may qualify for an exemption or a subsidy that reduces or totally eliminates their shared responsibility requirement. If you need to apply for assistance, you can use the state marketplace to submit an application.
Time Limits for Obamacare Enrollment
While the Affordable Care Act was signed into law in 2010, its implementation did not come about until October 2013 during initial enrollment. Americans originally had until January 31, 2014 to enroll in a healthcare plan either through their employers, through the government, through private insurers or through an assistance program like Medicaid. Due to confusion about the ACA, the deadline was extended until March 31, 2014 for policies beginning May 1, 2014. If you had enrolled in a plan by March 31, 2014 then you are in full compliance with the Affordable Care Act. This strict deadline applies to every subsequent Open Enrollment Period, even if an extension is granted by the government.
The 2016 open enrollment period has a different time period. The enrollment period will begin on November 1, 2015 and will end on January 31, 2016. If you want a plan that will kick in by January 1st, you will need to complete the enrollment process by December 15, 2015. If you enroll after that date your plan will become effective at the start of the second month. For instance, if you enroll in a plan on January 18th, your plan will take effect on March 1st.
If you didn't have healthcare coverage by the date above, then unfortunately you will be assessed a tax fee by the IRS. This tax depends on your tax filing status. Single individuals will owe the greater of 2.5 percent of their income or $695 for uninsured adults and $347.50 for uninsured children for the 2016 calendar year, and the fee will continue to increases during subsequent years. If you meet exemption status or don't pay taxes due to low income, then you will not be assessed a non-compliance fee.
Why Everyone Needs Health Insurance
If you've never purchased healthcare before, then you may not understand why the Affordable Care Act was even necessary. Young people in particular hesitate to purchase insurance because they get less sick and experience less chronic conditions than their parents or grandparents. Surely those who wanted insurance could get it if they needed. Unfortunately, this wasn't always the case. In fact, millions of people who needed insurance for themselves or their dependents found it impossible to get coverage due to pre-existing conditions, their gender, their age or the cost. Still, the question gets asked: Why should I pay for insurance that I don't need or want?
In reality, you will need insurance at some point in your life even if you take excellent care of your health. You may become pregnant, get injured in an accident or develop an unexpected illness. While healthy diets and regular exercise will prevent a wide range of medical conditions, these choices alone don't prevent emergencies. As with home insurance, you may not need the coverage until an emergency, but it's a lifesaving and money-saving investment that will make the whole experience much less stressful.
You don't want to get stuck in an emergency room without insurance. The cost can be astronomical even with cash discounts and write-offs provided by religious hospitals. The longer you wait to buy insurance, the more expensive premiums become for everyone else. This is why the ACA refers to the penalty fee for non-compliance as a Shared Responsibility Payment.
There are always options for those who can't afford insurance. Even under the new law, you can apply for an exemption or subsidies to make healthcare more cost-effective. For example, people younger than 30 can choose a Catastrophic Plan that covers only emergencies. At the low end of the spectrum, a Bronze Plan also provides basic coverage while alleviating a tight budget. In any case, all insurance plans available today must offer free preventative care along with other essential benefits that could help save millions of lives and reduce the financial burden of the existing healthcare industry. If everyone does his part in terms of purchasing affordable healthcare, then healthcare actually remains affordable.