Obamacare Made Simple
What You Need to Know about Obamacare: 10 Common Questions Answered
The Affordable Care Act (ACA), otherwise known as Obamacare, is essentially a framework of federal rules around health-care coverage. Health insurance companies are now required to pay for a certain minimum amount of health care and services, and to remove caps (the maximum amount they'll cover) on certain care. The law sets up a system for guaranteed coverage and a "Patient's Bill of Rights," which establishes certain protections for consumers. And most U.S. citizens and permanent residents are now required to buy health care coverage; if you go without it for two consecutive months or longer, you might pay a penalty with your 2015 taxes.
Why would health care coverage be required under Obamacare?Here are a couple of reasons the ACA requires you to have health insurance.
- When people have no health insurance and get sick or injured, they often end up in hospital emergency rooms. This kind of care costs more than ordinary doctor visits. If you can't afford to pay, the hospital generally still has to provide some care, and someone has to pay it. This can mean increased health insurance premiums or taxes for everyone else.
- Health insurance companies can keep costs down if they insure many people, and only a small percentage of their members are considered high-risk (having ongoing or expected health problems). The more people a company insures, the more it can "spread out" the risk. People with health issues may be more likely to sign up for insurance than healthy people. But if everyone has to get insurance, regardless of their health, the average amount the insurer pays out for each person's care will likely go down -- so companies can keep premiums lower.
What are the categories of health insurance?
Obamacare, as many people call the Affordable Care Act, sets a minimum amount of coverage that health insurance policies must provide. Each plan must cover at least 60% of the total average estimated costs of patient care, as explained in this brief, helpful video.
Under the ACA in 2015, you can choose among several insurance plan categories, with the "metallic" names Platinum, Gold, Silver, and Bronze. The metal levels correspond to the different premiums and cost sharing you can expect for each insurance plan category; it isn't related to the amount of coverage or quality of care. Platinum has the highest premiums, but the lowest average out-of-pocket costs; Bronze has the lowest premiums, but the highest average costs. For example, you can expect a Bronze plan to have higher copayments and a higher deductible than a comparable Platinum plan.
There are several types of health plans: major medical plans (such as many employer health plans), qualified health plans (which are certified by the government's Health Insurance Marketplace), catastrophic plans, supplemental plans and short-term "gap" coverage. These are shown in the infographic below.
"Catastrophic" coverage is a kind of safety net for people under the age of 30 (and people who qualify for hardship exemptions) who aren't covered under another health plan (for example, by an employer or parent). A catastrophic plan typically has a low premium, but you might have to pay higher out-of-pocket costs than with the metallic plans. It's designed to cover you in case you have a "catastrophic" situation where your care could cost thousands of dollars, such as a serious illness or an injury accident. Click here for more information about catastrophic coverage.
Short-term "gap" coverage can provide some health coverage for you when you don’t otherwise have an opportunity to enroll in a more complete health plan -- for example, if you missed the Open Enrollment period. Click here for more information about gap coverage.
How has Obamacare changed health insurance and costs?
The new rules affect everyone - insurance companies, medical providers, and individual consumers like you.
- Before the ACA, people with health problems sometimes had trouble finding an insurance company that would cover them. The ACA requires not only that health insurers can't turn you down or charge you more if you have a "pre-existing condition;" it also mandates that if you have a health insurance policy and get sick (for example, with a chronic illness such as cancer), the company cannot drop you as a member for medical reasons.
- In most cases, you're now entitled to many free preventive services, such as certain vaccinations and screenings.
- Some people may have barely noticed a change; for example, if you get health coverage through your job and it covers everything Obamacare requires, things might not have changed that much for you.
- Others may have seen their health insurance premiums change in 2015 (or earlier). There are many factors influencing rates; one of them may be the increased coverage some companies may need to provide in order to meet ACA standards. Other factors may include where you live, your age, whether you smoke, and what plan category you have.
- Where you live can have a big effect on the size of your monthly premium. According to the Kaiser Family Foundation , a 2015 study of cities in 11 states found that in some cities, premium rates for Silver plans are lower than last year; on the other hand, some cities saw a premium hike of up to 16%.
- If you're not insured, or if you are but want to switch to a different insurance policy, you can now visit an online "marketplace" to explore your options. eHealth is one such marketplace, or you can visit your state health insurance website or Healthcare.gov.
What minimum health coverage does a plan have to include?
Under Obamacare, a health insurance plan has to cover at least a certain portion of your costs for these services and items (often called "essential health benefits"):
- Outpatient services
- Emergency services
- Pregnancy, maternity, and newborn care
- Mental health and substance abuse services
- Prescription drugs
- Rehabilitative care
- Lab services
- Preventive care
- Pediatric services
What recent news about Obamacare should I be aware of?Obamacare Health Subsidies Update
The U.S. Supreme Court upheld the ACA in June 2015, allowing the government to continue giving subsidies to millions of consumers to help pay for health insurance. If you have a low to moderate income, you might be interested in watching this helpful "How do Obamacare subsidies work in 2015?" video.Obamacare Small Business Update
Small businesses (with 50 to 99 employees) got an extension of the ACA deadline to provide insurance to their employees in 2014. These companies have until 2016 to research choices in the marketplace.
Will Obamacare affect my taxes?
You may have heard about Obamacare affecting your income taxes. You need to mark a checkbox on your tax return to indicate that you and your family had health insurance during the tax year. If you weren't insured, you may have to pay a fee unless you qualify for an exemption. In some cases, you might be eligible for tax credits that help with premiums and out-of-pocket costs; these tax credits may also be referred to as subsidies, and you apply for them when you buy a qualifying health plan. For more information about the ACA and your 2015 taxes, see here.
When can I sign up for Obamacare?
Usually, sign-up time is limited to the annual Open Enrollment Period -- November 1st, 2015 through January 31st, 2016.
But in some situations, you may qualify for a Special Enrollment Period and won't have to wait for the Open Enrollment Period. These situations generally reflect significant changes in your life. They include, but aren't limited to:
- Moving to a new area
- Losing your health insurance; for example, losing coverage from your job, or losing coverage through your spouse because of divorce or death
- Adopting a child
- Having a baby
- Getting married
- Experiencing changes in your income
- Getting out of prison
- Belonging to a federally recognized Native American tribe
What are the top qualifying life events that triggered Special Enrollment Periods?
A June 2014 analysis of eHealth shoppers has shown the following to be the top qualifying life events reported by eHealth customers:
|Loss of health coverage||49%|
|Marriage or divorce||6%|
|Birth or adoption of a child||3%|
If you think you might qualify for a Special Enrollment Period, feel free to fill out this form and get a customized quote.
Where can I find health insurance I can afford?
It's important to compare plans carefully and make sure you get one that suits your health needs and your budget. We're here to help you. Feel free to contact one of our licensed insurance agents, or just click the Find Plans button on this page.
How can I learn more about Obamacare?
We know that all the changes brought about by the ACA can be a lot to digest. That's why we've created an eBook that makes it all pretty simple. You can read the eBook on your smartphone or tablet. You can also visit Healthcare.gov.