President Obama signed the Affordable Care Act into law, but this program is the result of decades of ideas from both political parties and the health care industry. The idea of an individual mandate was first presented by current opponents of the law the Heritage Foundation in 1989. ObamaCare itself was in fact modeled after “Romney Care,” which is the nickname for the health care reform law implemented in the State of Massachusetts by then Republican Governor Mitt Romney.
The Affordable Care Act’s main focus is on providing more Americans with access to affordable health insurance, improving the quality of health care and health insurance, regulating the health insurance industry, and reducing health care spending in the US. The law contains hundreds of different provisions that address different aspects of “the healthcare crisis” in the US.
What is ObamaCare?
ObamaCare is the unofficial name for The Patient Protection and Affordable Care Act, a health reform law signed on March 23, 2010, by President Barack Obama.
|(President Obama Portrait Public Domain by Whitehouse.gov)|
What Does ObamaCare Do?
The Affordable Care Act does lots of important things including:
- Offering Americans a number of new benefits, rights, and protections in regards to their healthcare
- Setting up a Health Insurance Marketplace (HealthCare.Gov) where Americans can purchase federally regulated and subsidized Health Insurance during open enrollment.
- Expanding Medicaid to all adults in many states.
- Improving Medicare for seniors and those with long-term disabilities.
- Expanding employer coverage to millions of employees.
- Requiring most people to have coverage each month from 2014 in order to get an exemption, or pay a fee.
- And introducing new taxes and tax breaks, among other provisions.
(Source: http://obamacarefacts.com/whatis-obamacare/ – Obamacare website)
Some facts about Obamacare that you should know
- The Affordable Care Act (ObamaCare) requires you to get and keep major medical insurance (known as minimum essential coverage) throughout the year, pay a fee for each month you go without coverage, or get an exemption. The requirement to buy insurance is sometimes called the “individual mandate” and the fee you have to pay is called the “individual shared responsibility payment“. There are over 20 exemptions from the fee, including a short coverage gap of less than 3 months everyone qualifies for and an exemption based on income. Some exemptions require you to apply for the marketplace in advance, all exemptions are claimed on form 8965.
- Another fact about obamacare is that Minimum essential coverage includes all marketplace coverage, most major medical coverage sold outside of the marketplace, Medicare, Medicaid, employer based coverage, and more. It does not include short-term health insurance.
- Unless you qualify for Medicare, you can use HealthCare.gov or your state’s marketplace to sign up and enroll in a plan during each year’s open enrollment period. You can use the marketplace to compare plans, apply for cost assistance, and see if you qualify for Medicaid / CHIP. 24 / 7 assistance is offered on the phone, in-person, or via chat. If you don’t know what your states marketplace is, or are confused about how to shop for coverage, always start with HealthCare.gov.
- You can ONLY purchase qualifying private medical insurance during open enrollment (this is true both inside and outside the marketplace). The only exception is if you’ve recently had a major life change like moving, getting married, or losing your job. A major life change my qualify you for a special enrollment period in the Health Insurance marketplace.
- By using the marketplace, you’ll find out if you qualify for cost assistance on your premium and/or out-of-pocket costs. Cost assistance is based on your income – which must be between 100% and 400% of the Federal Poverty Level (FPL) – and is only available through the marketplace. Out-of-pocket assistance is only offered on Silver plans. If you get cost assistance, you’ll need to file form 8962 at tax time. Those with affordable employer coverage can get coverage, but can’t get cost assistance. Those with Medicare can’t use the marketplace and must go with a Medicare plan. For those looking for the best value we suggest people look into a Silver plan with an Health Savings Account (HSA) and being aware of where their income falls on the Federal Poverty Level. Keep in mind cost assistance is based on annual household income (head of household and spouse’s MAGI plus tax dependents AGI for the year you claim assistance), not monthly income.
- You can enroll in Medicaid and CHIP 365 days a year. Eligibility is based on income, which must be at or under 138% of the Federal Poverty Level (FPL) (in states that expanded Medicaid). During open enrollment, you can find out if you qualify for Medicaid by going to HealthCare.gov. Outside of open enrollment, you’ll need to follow these steps to sign up for Medicaid.
- You can Buy Insurance outside of the marketplace. Many insurers work with HealthCare.gov and can help enroll you in a marketplace plan if you qualify for cost assistance during open enrollment. If you don’t qualify for cost assistance, then shopping outside the marketplace could even be your best option as, in many cases, you’ll have a wider selection of plans. Private insurance must be purchased during the annual open enrollment period as all insurers have adopted the marketplace’s open enrollment period.
- When you choose a health plan, in most cases you’ll have to keep that specific plan until the next open enrollment period. Make sure to choose a plan that meets all your needs. Things to keep in mind: PPOs tend to have wider networks than HMOs – you’ll want to make sure the drugs and services you need are covered under your plan. If you rarely use medical services, a high-deductible low premium plan could be your best option. If you use lots of services, you’ll probably want a low-deductible plan with high cost sharing. Consider getting an HSA-eligible plan to take advantage of the tax benefits of a Health Savings Account on higher-deductible plans. In general, higher-cost plans will save you more the more you use them. You can learn more about comparing plans here.
- No matter what plan you get, most basics – like an annual checkup, immunizations, preventive tests, and more – will be covered with no out-of-pocket costs. Regardless of health status, all major medical plans must be sold to you. You can’t be charged more based on gender or health status, and you can’t max out annual or lifetime dollar limits on essential care. Familiarize yourself with your new benefits, rights, and protections.
- As the law stands now, the “employer mandate” says that large employers (those with over 50 full-time equivalent employees) have to cover their full-time workers starting in 2016.
(Source: http://obamacarefacts.com/obamacare-top-10/, Obamacare website)
Purpose of This List of ObamaCare Pros and Cons?
This ObamaCare pros and cons list is meant to give you an idea of the most praised and most controversial aspects of the 1000-plus page bill. Many online sources only want to give you one side of the story – we aim to bring you an unbiased look at both the negative and positive aspects of the Affordable Care Act. Let’s continue by discussing the ObamaCare pros and ObamaCare cons for majority groups of Americans. Then we will go through some specific points of the law that are commonly thought of as pros or obamacare failures Obamacare explained. Now let’s discuss about the pros and cons of Obamacare in details.
Advantages of Obamacare. Unbiased article list
- The biggest benefit is that it lowers overall healthcare costs. It does this by providing insurance for millions and making preventive care free. People receive treatment before they need expensive emergency room services. In 2015, the cost of health care services increased 0.5%. That’s much less than typical price increases of 3.0% to 4.0% annually in the years before the ACA. (Source: “Health Care Services Depress Recent PCE Inflation Readings,” Dallas Fed, August 2016.)
- It requires all insurance plans to cover ten essential health benefits, including treatment for mental health, addiction and chronic diseases. These patients wind up in the emergency room if they don’t have access to healthcare.
- Insurance companies can no longer deny anyone coverage for pre-existing conditions, drop them, or raise premiums once they do get sick.
- Lifetime and annual limits on coverage are eliminated.
- Parents can add their children up to age 26 on their health insurance plans. That increases profit for insurance companies, since they receive more premiums without higher costs for these healthier individuals. As of 2012, more than three million previously uninsured young people were added.(Source: Department of Health and Human Services, Obamacare chip)
- It provides tax credits for insurance to the middle class (below 400% of the poverty level, or $94,000 for a family of four). States are required to set up insurance exchanges, or use the Federal government’s exchange, to make it easier to shop for plans.
- It expands Medicaid to 138% of the Federal poverty level, providing this coverage to adults without children for the first time.
- The Medicare “donut hole” gap in coverage is eliminated by 2020.
- Businesses with more than 50 employees must offer health insurance, but receive tax credits to help with the costs.
- It lowers the budget deficit by $143 billion over the next 10 years by reducing healthcare costs, shifting cost burdens to health care providers and pharmacy companies, and raising taxes. (Source: CBO CBO Report on Health Care Reform and the Budget; Wall Street Journal, What Health Insurance Ruling Means, June 28, 2012; NPR, Medicaid Expansion, June 27, 2012. Obamacare ny)
Unbiased Disadvantages of Obamacare/ Obamacare Failures
- There are 30.1 million people who currently buy private health insurance. Many of them have had their plans cancelled by the insurance company because the plan doesn’t meet the ten essential health benefits. Their costs of replacement insurance are higher because it provides services, like maternity care, that many of them don’t need. (Source: Factcheck.org, The Keep Your Plan Promise, June 28, 2012)
- Another 3-5 million people could lose their company-sponsored health care plans. Many businesses will find it more cost-effective to pay the penalty and let their employees purchase their insurance plans on the exchanges. Other small businesses might find they can get a better plan through the state-run exchanges. (Source: CBO, The Effects of the Affordable Care Act on Employment-Based Health Insurance, March 15, 2012)
- Increased coverage may raise overall health care costs in the short-term. That’s because many people will receive preventive care and testing. These additional tests, such as cancer screening and cholesterol tests, will lead to higher medical spending. (Source: CBO, 2009 Study on Preventive Health Care, August 7, 2009)
- Those who don’t purchase insurance will be assessed a tax. Find out how much is Obamacare cost and Obamacare Taxes. However, many of them will avoid the tax through an ever-expanding list of exemptions.
- About 4 million people, or 1.2% of the population, will pay the tax rather than purchasing health insurance. The CBO estimates this will cost them $54 billion.(Source: Washington Post Factchecker, Tax Breaks vs Tax Hikes, July 6, 2012)
- Taxes were raised in 2013 on one million individuals on incomes exceeding $200,000 and four million couples filing jointly on incomes exceeding $250,000. They pay a total of 2.35% (up from 1.45%) Medicare taxes on income above the threshold. They also pay an additional 3.8% Medicare taxes. That applies to the lesser of income from dividends, capital gains, rent and royalties or income above the threshold. (Source: Smart Money, What Obamacare Means for Taxes, June 28, 2012. Obamacare nj)
- Starting in 2013, medical-device manufacturers and importers paid a 2.3% excise tax. Note: This tax has been suspended for 2016-2018. Indoor tanning services pay a 10% excise tax. This could discourage those businesses from hiring new employees.
- Starting in 2013, families could only deduct medical expenses that exceed 10% of income. Previously, they could deduct expenses that exceeded 7.5% of income.
- Pharmaceutical companies pay an extra $84.8 billion in fees over the next ten years to pay for closing the “donut hole” in Medicare Part D. This could raise drug costs if they pass this onto consumers.
- In 2020, insurance companies will be assessed a 40% excise tax on “Cadillac” health plans. These are plans with annual premiums exceeding $10,200 for individuals or $27,500 for families. Many of these plans are for people in high-risk pools, such as older workers or those with dangerous jobs. Most of the tax will be passed onto the companies or employees, raising premiums or deductibles.(Source: Kaiser, Cadillac Tax Explained, March 18, 2010)
Even three years after it’s been approved, 54% of Americans opposed the Act, and many groups are still working to repeal Obamacare.
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