***THIS POST WAS WRITTEN ON October 5, 2013. Scroll to the bottom of the page to read a short update***
The Affordable Care Act (aka Obamacare) is a set of health reforms passed by Congress, signed into law by President Obama, and upheld by the United States Supreme Court. The law itself touches on everything from how hospitals are reimbursed for care to whether chain restaurants post calorie counts on their menus. But most of the controversy and misinformation is centered around the provisions of the law that relate to the efforts to insure about 30 million Americans through subsidized private insurance or government-provided Medicaid. Since the ACA was signed into law by President Obama in 2010, the republican party and conservative media have used every day of the past 3 years to disseminate false information in hopes of killing it. They lost that fight but they were very successful in getting a large amount of the public to believe their false information. So with the help of Ezra Klein’s Wonk Blog I’m going to post the truth about Obamacare and answer some of the most frequently asked questions.
Is the Affordable Care Act better than Obamacare?
Actually these two are the same. The official name of the new health care law is the Affordable Care Act or ACA for short. Newspaper headline makers started using the term “Obamacare” during the democratic primaries in 2007 because it was a lot shorter than printing “Obama’s health care overhaul”. Republican presidential candidates picked up the term in 2008 and began using it as a pejorative. The democrats and President Obama decided to “reclaim” the term and embraced it as a positive and it has stuck ever since. So just to recap, the Affordable Care Act and Obamacare are the same.
Who get’s insurance from Obamacare (ACA)?
Here’s the biggest thing to know about Obamacare: Most people will never notice it.
If you get health insurance through your employer or the government — as 80 percent of Americans do — it’s very unlikely that you’ll interact with Obamacare’s coverage expansion at all. (There are other provisions in Obamacare, like some of the efforts to improve care quality or cut health-care costs, that could affect you. But that’s not the core of the law)
Obamacare mostly matters most for the 20 percent of Americans who are either uninsured or get insurance on the individual (or “non-group”) market. Anyone in those groups can get insurance through Obamacare. Those who make more than the federal poverty line, but less than four times the poverty line ($94,200 for a family of four), can buy subsidized insurance on the marketplaces. Those making less than 133 percent of the poverty line, and living in a state that has accepted the Medicaid expansion, can get Medicaid.
The Congressional Budget Office expects that the Affordable Care Act will cover about 14 million of the uninsured in 2014 and 25 million by the end of the decade. That still leaves about 30 million people uninsured. More on them here.
If I already have health insurance, do I have to care about this?
Probably not. The truth of Obamacare is that it mostly affects the uninsured and people who don’t have employer-based or government-based health insurance. That’s a relatively small fraction of the population, even though we often talk about the law as if it affects everyone.
How much are the premiums?
How much will I pay out of pocket?
Depends. Out-of-pockets costs in Medicaid are almost nothing. In the insurance marketplaces, however, there are four levels of insurance coverage: Bronze, silver, gold and platinum. These levels correspond to the amount of health costs they’ll cover for the average applicant: 60 percent for bronze, 70 percent for silver, 80 percent for gold, 90 percent for platinum (there’s also a bare-bones “catastrophic” option available to applicants under age 30). The lower your level of coverage, the more you’ll pay out of pocket.
But the law also has secondary out-of-pocket protections, including limits on out-of-pocket costs for lower-income families. The Kaiser Family Foundation’s subsidy calculator will tell you if you qualify.
What if I have a preexisting condition?
Under Obamacare, it doesn’t matter. One of the really big changes that the health law makes to the insurance marketplaces is eliminating the relevance of preexisting conditions altogether. This is true for both plans sold on the new marketplaces, and those sold outside of it. This means that insurers won’t be allowed to ask you about your health, or charge you more because of it.
Where do I go to buy it?
But aren’t there a bunch of glitches?
When the healtcare.gov site first went up over a year ago it definitely had glitches. Thankfully all the glitches and problems with the website have been fixed and it’s been running smoothly ever since.
How long do I have to sign up?
The next open enrollment period starts on October 7, 2014, however you can do some comparison shopping on the www.healthcare.gov site anytime you want.
What if I don’t want to buy insurance?
First off: Nobody will come knocking down your door, demanding that you purchase a health plan. But if you decide not to purchase coverage, you will have to pay a $95 tax penalty. This would be deducted from your 2015 tax return.
Can the government put a lien on my property or arrest me if I don’t get coverage?
While this is a popular Obamacare myth, it is, in fact, untrue: The federal government is actually really limited in the action it can take to collect the tax penalty for not purchasing health coverage. It can’t send agents to your door, nor can it put a lien on your house. The most they can do is take the fine out of your tax refund – or, if you’re not getting a refund this year, put it on your tab for next year’s refund.
What if I can’t find an affordable plan? Do I still have to buy something?
Nope! Although it’s the government, not you, who gets to decide what counts as “affordable.” The health care law says that if you can’t find a plan that costs less than 8 percent of your income, then you’re exempt from the requirement to purchase health insurance. This will, obviously, depend a lot on an individual’s circumstances and not the sticker price of the plans sold on the new marketplaces.
I’m 25 and uninsured. What does the law do for me?
For you, Obamacare might be the best deal: The health law allows young adults up to age 26 to stay on their parents’ health insurance plan. About 3 million people have taken up this option so far. So start bugging your mom to fill out the paperwork.
What is a Government SUBSIDY?
A government subsidy is a form of financial assistance. In simpler terms it’s money from the government.
How are the subsidies paid for? Are my taxes going up?
There are essentially two big funding streams for the Affordable Care Act. The first are cuts to Medicare reimbursements. We heard a lot about this during the presidential campaign, when Mitt Romney would talk about the law cutting $716 billion from Medicare. These are cuts largely to the rates that we pay doctors who see Medicare patients, and also what we pay private insurers that cover these subscribers.
The other big funding source are taxes on different health care industries like hospitals, insurance companies and, more relevant in recent days, medical device makers. There’s a debate about whether those taxes will get passed on to consumers, but, as it stands, they’re not direct taxes on you as an individual.
There is one tax that is applied to some individuals, which began last year: The Affordable Care Act raised taxes on investment income for people who earn more than $200,000.
Did the President exempt himself and congress from the mandate?
No one is “exempt” from the individual mandate. I know republicans have repeated this “exemption” nonsense over and over but it still doesn’t make it true.
Where can I get more information about Obamacare?
The best place to go is the ACA signup site at www.healthcare.gov
*Most of this information came from Ezra Klein’s Wonk Blog article “Everything you need to know about life under Obamacare“.
Is there a short video explanation I can watch?
Yes. Here are two:
OBAMACARE UPDATE 9/5/2014
Remember the dire warnings from republicans about how horrible Obamacare would be? Death panels according to Sarah Palin? Michelle Bachmann on the floor of the Senate saying stop it before it literally kills women children and the elderly? Ted Cruz saying it would destroy the entire healthcare system? Ben Carson saying Obamacare will be worse than slavery? Turns out everything every republican has said about Obamacare has been proven wrong. The law is not only working, it is out performing even the best expectations. That’s why they stopped talking about it. Don’t they owe America an apology? Or at least an apology to their constituents who trusted them to be truthful and work for the country’s best interest? I think so, but I wouldn’t hold my breath. Read about the law’s success at: http://www.vox.com/2014/9/5/6108493/obamacare-premiums-lower-2015