Why is healthcare so complicated?
Healthcare is complicated. It involves millions of workers and more than one hundred million customers and users. It is one of the largest government programs ever undertaken in the United States. Healthcare is also complicated because of the wide variety of needs it must satisfy.
Buying health insurance is an individual decision based on family or personal needs and preferences. When multiplied by millions and added to the number of medical services and support systems needed, the complexity cannot be avoided.
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Obamacare is a Complex Law
The Patient Protection and Affordable Care Act of 2010 was a bold attempt to reform the health insurance industry and promote coverage among millions of Americans that did not have insurance. It banned discrimination in accepting applicants and stopped the use of pre-existing conditions to deny coverage.
The law affected Medicare, Medicaid, and the CHIP. It expanded Medicaid to cover millions of uninsured low-income Americans. It reformed the health insurance business by placing standards on health plans including screening and prevention services at no extra costs.
The Individual Mandate
The individual mandate is the key mechanism of the Affordable Care Act. It makes everyone eligible for coverage subject to a fine for not having a qualified plan. Universal coverage is the goal of the law; this is not possible unless everyone gets covered.
Uninsured citizens pose a burden on the health system as well as the enormous health risks that come from going without medical care.Diseases that could be prevented or treated early can grow to life-threatening conditions if left alone.
Qualified Health Insurance
The law requires health insurance coverage, but the plan must be a qualified health plan in order to avoid the penalty for no insurance.
A qualified plan must have minimum essential coverage. This includes minimum actuarial value and the ten essential health benefits.
The Affordable Care Act requires that participating insurers accept applicants without regard to health or medical history. In requiring universal acceptance, the law squares with the individual mandate requiring that every eligible person get and keep qualified health coverage. The below-listed items describe the permitted exceptions for price differences among customers buying the same plan.
- Tobacco usage
Advanced Premium Tax Credits
One of the appealing parts of the law is the use of tax credits to reduce the costs of the monthly premiums. The credits lower the expense of premiums by applying credits to the monthly bill. The remarkable savings makes high-value policies more affordable for millions of customers.
For those earning less than 400 percent of the federal poverty level, the Obamacare Marketplace and the state exchanges can offer assistance to reduce the expenses related to health coverage. These assistance programs use income as a trigger. For example, those within 250 percent of the federal poverty level can get cost sharing reduction subsidies.
Four Types of Health Plans
One attempt to make the selection of health plan easier was the metal tier approach. The CMS divided health plans according to the actuarial value. Placing them in metal tiers, the CMS hoped to make it easier to compare policies that offered similar value to the consumer.
The use of high deductible policies health plans with Health Savings Accounts offers a way to pay expenses and possibly build financial strength for the future. The below-listed items describe the four types of Obamacare policies.
- Platinum plans have high premiums and low deductibles. They pay about 90 percent of the covered benefits leaving 10 percent for the policyholder’s payment. These plans are ideal for those with moderate to heavy demands for medical services.
- Gold plans have high premiums and pay about 80 percent of covered benefits. These plans have moderate and reachable deductibles. They are excellent choices for those with moderate demands for services. They offer low copays and coinsurance.
- Silver plans have moderate premiums and a wide range of deductibles. Silver plans pay about 70 percent of covered benefits leaving thirty percent for the customer’s account. Some silver plans match with Health Savings Accounts. These have higher deductibles, and customers can use pre-tax dollars from their income to pay expenses.
- Bronze plans meet the minimum value requirements under the Obamacare rules. They cover about s60 percent of the costs of plan benefits. These plans have high deductibles that are unlikely to reach without a serious event. They offer low premiums and access to regular checkups and prevention services.
Types of Service Networks
The health plans offer differences in consumer flexibility. As a general rule, the greater the consumer flexibility, the higher the costs of insurance. Insurers try to reduce costs by offering fewer options and price incentives for keeping customers within their low-cost networks of medical care providers.
- HMO is the Health Maintenance Organization. They require a primary care physician to assign services to customers. The primary care physician can refer customers to network specialists. Most HO plans do not pay for outside services.
- PPO is the preferred provoker organization. This type of plan allows the use of outside doctors and without referrals. Customers pay more when the go outside the network. Outside network spending does not count towards the out-of-pocket limit.
- EPO is the Exclusive Provider Organization. These plans do not pay for outside doctors and consultations. They offer savings when using network resources through low prices.
- POS is the Point of Service network. These plans keep prices low by requiring approvals from the primary care physician for network specialists and resources. They charge less when the customer uses network resources than when they go outside of the network.
Costs were at the heart of the enactment of the Affordable Care Act as the nation’s health care costs spurted upward year after year. The Affordable Care Act had safeguards to protect insurers from unforeseeable losses. The risk corridors were established to enable greater participation and competition among insurance companies.
State and federal agencies have the choice of getting involved in the plan development to foster low prices and high-value policies. The below -described actions help control costs.
- Active purchaser state exchanges work with insurers to produce the highest content and the lowest plan prices.
- Improving competition through programs such as the COOP ( Consumer Owned and Oriented Providers).
- Changing the basis for accountability from volume to quality of customer outcomes.
Selecting in a Complex Environment
The ultimate task for most Americans is to get and keep qualified health insurance. The law requires it, and regular medical care enhances the health and safety of the future. Comparison shopping is an essential part of working one’s way through the complex area of health insurance.
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