What is Obamacare, exactly?
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• The ACA requires Americans to have health insurance coverage
• The ACA expanded health care rights for everyone
• No one can be denied for pre-existing conditions
• The ACA provides subsidies to lower costs for eligible incomes
• The ACA expanded Medicaid and child health services (CHIPs) to cover more low-income adults and children
• The law authorized state and federal health care exchanges for individuals to buy health insurance
Obamacare is the common name for the Affordable Care Act of 2010 (the ACA). It was a major new health care reform law that regulated health insurance and gave millions of Americans easier access to health care services. Obamacare changed the range of choices for Americans. Comparison shopping is the best way to find if Obamacare is the best option for you and your family. Start comparing health insurance rates now by using our FREE tool above!
What is Obamacare?
The name Obamacare is the commonly used phrase for the Patient Protection and Affordable Care Act of 2010. The name Obamacare was first used by opponents of the law but became popular everywhere because the law was mainly created by the efforts of President Barack Obama and his Administration in 2009-2010. The law was intended to reform health care in the US and makes a significant difference in the lives of Americans by expanding access to health insurance and health care services. It involved some major reforms including subsidies for costs of premiums, increasing coverage of adults, keeping young adults on parental policies, and stopping denials of coverage for health and gender status.
The Congress designed the law to operate through a series of health insurance marketplaces. Called insurance exchanges, these state organizations would carry out the important tasks of working with insurance providers to create plans that could meet the healthcare needs of residents and at prices they could afford. However, many elected officials refused to establish exchanges and some attempted to block the law so that their citizens could not take advantage of the benefits of health insurance coverage, tax subsidies, and expanded aid to the poor.
Signing Up for Coverage
Americans living outside of the District of Columbia and the 16 states that manage insurance exchanges can use Healthcare.gov to get insured. The open enrollment period for coverage in 2016 began on November 1, 2015.
The official open enrollment for 2016 runs from November 1, 2015, to January 31, 2016.
The offered plans can be confusing and difficult for many consumers. The plans sometimes create hard choices between lower premiums and higher out of pocket costs. Comparison shopping is an ideal method for finding the best plans for the individual or family circumstances. Using comparison shopping, consumers can identify the features that are most important and consider which plan offers the best price.
Lower Monthly Premiums
The ACA grants tax credits to individuals that purchase qualified health insurance plans. To reduce monthly premiums, the regulations permit a subsidy based on income for those within 400 percent of the area poverty line. Plans purchased on the state or federal exchange offer prices that include the tax subsidy so that monthly costs are much lower.
Health Insurance Exchanges
Residents in the below-listed states can search, select, and purchase health insurance coverage from a state authorized and operated insurance exchange. Residents of these states get the benefit of state efforts to increase coverage and lower costs. Many state governors refused or failed to create state exchanges. The federal government created a website and resources for residents in states that do not provide health insurance exchanges. The governments offering insurance exchanges for their residents are California, Colorado, Connecticut, District of Columbia, Hawaii, Idaho, Kentucky, Maryland, Massachusetts, Minnesota, Nevada, New Mexico, New York, Oregon, Rhode Island, Vermont, and Washington.
The ACA Increased Insurance Coverage
Since its enactment in 2010, the Affordable Care Act has changed the proportions of uninsured Americans. The below-listed points describe some highlights of the impact of the ACA.
Since 2010, the ACA has:
- assisted 5.7 million young adults to retain coverage under a parent’s health insurance plan
- enrolled 11.7 million in state and federal marketplace plans
- covered a total of 14.1 million Americans with health insurance from October 2013 through March 2015
- Increased overall coverage for 16.4 Million Americans under the Affordable Care Act.
SHOP for Small Businesses
The ACA provides tax incentives in the form of tax credits for small businesses that offer health insurance coverage for employees. The Small Business Health Options Program or SHOP provides tax credits for small business owners that can offset tax obligations and improve profitability. Businesses can qualify with 25 or fewer employees and that average $50,000 or less in salary. Under the formula in the regulations, the maximum amount of business tax credits goes to firms with ten or fewer employees.
Saving Money and Saving Lives
Improving patient safety and treatment outcomes were among the vital goals of the Affordable Care Act. According to the Department of Health and Human Services, programs sponsored by the ACA have reduced hospital-acquired illnesses by 1.3 million, and avoided 50,000 patient deaths. The impact of these lifesaving programs on national health care costs was dramatic. They reduced health care costs by $12 billion over a three-year period.
The Purposes of Obamacare
The ACA was designed to reduce the number of Americans without health insurance coverage and access to a minimum desired level of health care services. A major contribution was the legal requirement for insurers to accept applicants without regard to past medical conditions and other factors used to deny coverage or increase the costs of coverage. The background of denial and industry practices for charges were compelling reasons to reform health insurance. Increasing costs for women who have children or denying coverage to sick children were examples of the need for change.
Making Local Hospitals Stronger
By increasing the numbers of insured persons, the ACA has strengthened local health services providers. At every level in the US, medical services have been burdened with unpaid bills when costs of treatment exceed health insurance limits and the individual’s ability to pay. Medicaid expansion was important for covering low-income adults who might otherwise have little or no access to health services. It also helped facilities that have been burdened with unpaid bills for services rendered to low-income residents who lack the financial ability to pay. The build-up of unpaid services has forced many hospitals to close and left millions of Americans in underserved communities, without easy access to health care.
An important provision of the ACA relates to the treatment of mental health conditions. The law establishes a right to evaluation, diagnosis, and treatment of mental health conditions including drug and alcohol addictions. These include inpatient and outpatients modes of treatment and care.
Types of Plans
The structure of plans available on federal and state exchanges uses a system of labels (Platinum, Gold, Silver, and Bronze) to describe plans. The regulations group plans by the percentage of costs covered by the insurance. Comparison shopping can help select plans with the best mix of costs and benefits for an individual’s or family’s needs. The following percentages estimate coverage amounts paid by insurance and the consumer:
- Platinum offers the highest coverage, the highest premiums, and the lowest subsidy percentage for monthly premiums. The value of Platinum plans is in the range of 90 percent of estimated total costs.
- Gold Plans offer a very high degree of coverage. The actuarial value of gold plans covers about 80 percent of costs.
- Silver Plans are the benchmark plans for determining value, approximately 70 percent of estimated total costs
- Bronze Plans have at least 60 percent coverage of estimated total costs.
Comparing State Exchange Plans
Sixteen states have established health insurance exchanges for their residents to review, compare and select health insurance plans. Healthcare.gov serves residents in the remaining states. Comparison shopping is the best way to buy health insurance coverage. An effective comparison shopping tool can reduce the time needed to find and compare plans that offer services, features that are most important for the buyer.
The Obamacare Record
Now in its third full year of implementation, Obamacare facts support estimates of its impact on reducing the numbers of uninsured persons, expanding the numbers of persons receiving health care services, and driving down overall costs. Costs have increased each year of Obamacare. The rates of increase are lower than projected before Obamacare.
Competition and Lower prices
The ACA created important processes for controlling insurance prices and reducing health care costs. These included state insurance exchanges because states create, and regulate insurance activities. The role of the states is vital to improving healthcare services and lowering costs.
States have the power to approve terms and prices of plans that can be offered on their exchanges.
When carrying out this function, states could choose to be active and negotiate with insurers, or to provide guidance through the review and approval process. By either method, states could have a profound influence on the terms and prices of plans offered to residents through state exchanges. By working with insurers to increase services and lower or contain costs, state exchanges can offer high-quality care and help residents by lowering prices and premiums.
Paying for Un-Needed Services
The ACA provides a set of minimum coverages, and it guarantees certain basic rights to everyone. Since every medical service has a cost, some people ask why they must accept more than they need. For example, a single, childless man must pay for maternity benefits and child related services. This is the methodology of the law; it seeks to require certain benefits for everyone and make them available and cost effective. The theory is that we all benefit from basic protections like good prenatal care and maternity care whether we have children or not. For someone in our families and connected lives, these universal requirements are essential elements of health care.
Individuals can sign up for health insurance during the annual open enrollment period that runs in 2015 from November 1st, 2015 – January 31, 2016. In states that operate health insurance exchanges, residents can go online to the state insurance marketplace, select a program, and enroll for health insurance coverage. In all other states, residents can go online to Healthcare.gov and review plans, select a plan, and enroll.
The federal regulations provide a fixed annual enrollment period. The exceptions to the rule of open enrollment are the listed life events that permit enrollment after the open enrollment period closes. The rules permit enrollment outside of the open enrollment dates for certain life events. Following these events, the rules allow a sixty day period for enrollment in a qualified health plan. The life events involve a change of status including moving to a different state, the birth of a child, marriage, and loss of insurance by a dependent.
One major purpose of the Affordable Care Act was to improve competition and drive down prices. The Consumer Operated and Oriented Plan ( called CO-OP) was an important tool for increasing the number of services and lowering prices.
The basic outline of this program was to provide loan funds to local groups that would develop and operate consumer-owned health care services organizations.
These non-profit entities would increase the amount of service providers in a local market, and offer lower prices by putting profits back into services. The CO-OP providers design plans that offer maximum services at minimum costs and fill gaps left by other private providers in a local market.
What Obamacare Means for You
Obamacare affects every resident of the US in some important way. For everyone, it ends the time when insurance companies can deny coverage and charge higher premiums for the insured person’s gender, status, or prior health conditions. It sets out required basic services that every insurance plan must provide at no additional costs including basic health assessments, preventive care, and maternity services. The law provides funding for health care services for vulnerable populations. These include low-income persons, who can least afford it, and children. It provides expanded coverage for low-income adults and child health programs through Medicaid.
The ACA offered plans, subsidies, to consumers and Medicaid expansion to the states. The law left to state governments to choose to receive the additional federal aid. Obamacare is an important change in US health care. Comparison shopping is the ideal method to determine if it is the right choice for you and your family members. Start comparing health insurance rates now by entering your zip code in our FREE tool below!