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How Obamacare Will Affect You
Posted on Mar 26, 2013 by Ailee Slater (G+)
It's been three years since the Affordable Care Act (also known as the ACA or simply Obamacare) was signed into law, but according to a recent study, most Americans still don't understand it: 48 percent of people in the United States are unsure if their state has chosen to expand Medicaid, nearly half believe that Obamacare will allow illegal immigrants to buy insurance, and two-thirds of uninsured Americans, the precise people for whom the health care law was designed, don't know how they will be affected.
This randomized survey was conducted earlier this month by researchers from Kaiser, who asked adults a number of questions related to Obamacare - if they had been affected positively or negatively by the passage of the plan, how the ACA would change their health insurance situation in the future, and which elements of Obamacare they saw as favorable. More so than uncovering Americans' opinions, however, the survey seems to have revealed the depths to which health law and the recent changes to care and insurance legislation haven't been made clear to the public.
With that confusion and lack of clarity in mind, here are a few explanations of how the Affordable Care Act will affect key groups in the United States.\
The Uninsured
Most uninsured Americans are either self-employed, or working for a small company that does not offer health benefits. Although some businesses do offer to pay part of their employees' insurance premiums, the outstanding cost may still be unaffordable for the worker, and so he or she remains uninsured. The average uninsured American lives on an income large enough to not qualify for Medicaid, yet small enough to not consider purchasing private insurance.
With Obamacare, many uninsured Americans will become newly eligible to join Medicaid; depending on where they live. States such as California, Massachusetts and Illinois have all agreed to take federal funds and expand Medicaid programs to include anyone with a yearly salary up to 138 percent of the federal poverty level; around $15,000 for an individual and $30,000 for a household of four. You can visit www.healthcare.gov to find more information about Medicaid programs in your state, and to learn whether you might be able to join Medicaid and start receiving insurance coverage through this public program.
If you are uninsured but don't qualify for Medicaid, not to worry - Obamacare was specifically designed, and many would say originally conceived, to help this exact group of people buy insurance. By October 2013, your state will have set up an insurance exchange on the internet, where you can compare different insurance coverage and pricing from private plans; kind of like shopping online for a new toaster. Besides creating and regulating these exchanges, the ACA further helps uninsured Americans by offering government tax credits to help purchase coverage. Anyone with a salary of up to 400 percent of the Federal Poverty Line (around $45,000 for an individual) will qualify for this federal assistance. Best of all, the tax credit will be given immediately, meaning lower monthly premiums for most Americans who were previously uninsured.
Insured, Working Adults
Americans with workplace health insurance will not be able to shop for a new plan through online exchanges. However, Obamacare will still affect these workers - under the new rules of the ACA, job-based insurance plans created after March 23rd 2010 are no longer able to deny coverage or set limits based upon pre-existing conditions. This rule also applies to an employee's children who are covered by the same insurance plan. This is great news for workers struggling with chronic health conditions, or who have children with a disability. Previously, an insurer could refuse to cover the cost of an asthma hospitalization for a child, classifying the disease as a pre-existing condition and therefore not insurable; after Obamacare, this sort of health care will be covered.
Small Businesses
Along with the uninsured, small business owners are another group who stand to benefit greatly from Obamacare. At the moment, small businesses that offer health care coverage usually pay more than big businesses, as a company with hundreds of employees can bargain with an insurer for better, bulk rates. With the Affordable Care Act, a small business with 25 or fewer employees can qualify for a tax credit of up to 35 percent of what it costs to provide workers' health coverage. That federal contribution will increase to 50 percent in 2014.
Also starting in 2014, small business owners will be able to shop for insurance coverage using an online exchange; just like an uninsured individual, a small business can compare prices and plans, and reap the benefits of marketplace competition between insurers. Obamacare is also expected to help small businesses by forcing insurance companies to justify any premium increases over ten percent. In fact, this rule has already led to declining rate increasing during the last quarter of 2011, according to data from the federal government.
Seniors
Affordable Care Act reforms with regards to Medicare mostly center around the so-called Donut Hole - a gap in prescription drug coverage for seniors who have reached a spending limit of $2,800 from Medicare, and become suddenly responsible for the entire cost of all medication, until an out-of-pocket limit of $4,550 is incurred. At that point, Medicare will once again help with the cost of prescription drugs.
Seniors 65 years and older have already seen the benefit of Obamacare thanks to a $250 rebate to help Donut Hole patients pay for prescription drug coverage. Obamacare also offers a 50 percent discount on many brand name drugs to again reduce costs for seniors in the Donut Hole, and by 2020, the federal government estimates that this gap in drug coverage will no longer exist.
The Affordable Care Act also works to strengthen Medicare by giving seniors better preventative services and wellness visits, without the need for out-of-pocket co-payments. To reduce spending long term, Obamacare has set up a program to fight Medicare fraud and waste, which should strengthen the system and lead to lower costs in the future.