First of all: the name. The term “Obamacare” was a derogative word created by pundits who opposed the passage of the Patient Protection and Affordable Care Act. But because “Obamacare” is so catchy, it was eventually adopted across the aisle in an attempt to drum up attention. Even President Obama gave his blessing on the word, and so the media began using it as the semi-official title.
But just what is Obamacare? It’s actually a collection of provisions and rules that work in tandem to change the way the insurance market operates. Or at least that’s the hope. Here’s a basic overview of some of the goals that are contained within:
Goal 1: Better Access
- Dependent children covered to age 26 – Beginning in 2011, dependent children will now be covered by their parents’ group plans until they are 26.
- Employer Shared Responsibility – Initially set to be implemented in 2014, recent regulations from the Treasure Department have delayed the implementation of the “Employer Mandate” until 2015. This provision requires employers with more than 50 full-time employees to offer “affordable” coverage to all employees who work more than 30 hours week. For every full-time employee not offered “affordable” coverage, the employer will have to pay a fine of $2,000 per employee.
- Exchanges – Beginning in 2014, individuals not offered employer coverage will have access to public marketplaces (exchanges) and of course the existing private exchanges. Each state is required to create their own exchange, partner with another state, or allow their citizens access to the federal exchange. Qualified individuals will be given a subsidy only if they buy insurance from a state or federal marketplace.
- Auto Enrollment –This provision requires all employers with more than 200 employees to “auto enroll” their employees into one of their health plans. It will then be up to the employee at a later date to switch plans. Obviously this will be a huge logistical and financial burden on many employers, so the roll-out for this provision is on the back burner. It's anticipated to be implemented either in 2015 or 2016. Refer to DOL Technical Release 2012-01 for more information.
Goal 2: Improve Care
- Pre-Existing Conditions – Starting in 2011, children under the age of 19 could no longer be denied coverage because of pre-existing medical conditions. By January 2014, this will be extended to everyone. In addition, health and medical information will not be allowed to affect the cost of premiums, with the only exceptions of some employer health incentive programs and smoking.
- Preventative Care for Women Beginning in 2012, coverage was expanded for women’s preventative care. This includes “well woman” visits, contraception, breastfeeding support, and STD testing among others. Women with coverage are also guaranteed many free health and wellness services.
- Essential Health Benefits – Beginning in 2014, all health care must include a set of services determined by the Department of Health and Human Services, referred to as “Essential Health Benefits”. The goal will be to assure consumers that any plan they buy will at least cover their minimum needs. For more information on Essential Health Benefits, including a list of services covered, check out our article on them here.
- Yearly/Lifetime limits – Insurance companies have traditionally set yearly and lifetime limits on the amount they would cover. If you cost them more than that, you could get dropped from coverage. Beginning in 2014, these limits will go away for essential health benefits.
Goal 3: Share Costs
- Medicaid Expansion – States were given the option to “expand” Medicaid under Obamacare with some help from the federal government. Beginning in 2014, states who voted for expansion will be extend Medicaid coverage for anyone up to 138% of the Federal Poverty Level. You can see an in depth look, including if you might qualify, here.
- Subsidies – As previously noted, individuals and families making less than 400% of the Federal Poverty Level will be given subsidies in the form of tax credits to buy insurance from the exchanges. These will be applied on a sliding scale depending on the level of income which you can find out more about here on our site soon. It is important to note that these subsidies are only available for those who buy from the exchanges and don’t already qualify for Medicaid.
- Employer Shared Responsibility – As mentioned, if you work more than 30 hours a week for an employer with more than 50 employees, you should be offered affordable health care insurance. Those employers will also have to provide plans which cover at a minimum 60% of all expenses. Again, this is not set to be rolled out until 2015.
So these are the goals that Obamacare has outlined, as well as the steps it’s planning on taking. 2014 is the critical year in which a majority of the changes will take place, so we’ll have to wait and see how it all works out. It’s important to remember that this all costs money, and Obamacare has specifically promised to not expand the national deficit. To raise the funds, Obamacare has some pretty clever provisions that are intended to generate revenues to fund the law. You can read about that here if you’re interested.