Obamacare Explained
Obamacare Explained (Like You're An Idiot)
Turns out a wonky website and warp-speed policy changes are the least of Obamacare's problems. A big reason Americans have hesitated to sign up for health insurance is they don't understand it.
A survey of more than 12,000 people released earlier this week by the
journal Health Affairs found that only 60 percent of the people who
should be signing up for Obamacare understand all of its key concepts.
A Carnegie Mellon University study done earlier this year was even less
optimistic. It found that 86 percent of Americans between the ages of 25
and 64 not only didn't have a grasp on Obamacare, they couldn't even
wrap their heads around the fundamental concepts of any kind of health
insurance.
Insurers are also reporting mass confusion.
"Our hot line reports that on pretty much every call, customers ask our
agents the most basic questions about insurance, said Chini Krishnan,
co-founder and president of GetInsured, an online insurance marketplace
certified by the government to help enroll people in Obamacare plans.
"Then add in premium tax credits and cost-sharing reductions -- it's a
lot for them to process."
So are you an idiot if you don't understand what the deal is with
Obamacare? Karen Pollitz, health care policy expert and senior fellow at
the Kaiser Family Foundation, doesn't think so. But she explained it as
if you are.
Is it possible to explain Obamacare in 10 words or less?
No. But Pollitz at least provided a simple explanation.
Obamacare – also known as the Affordable Care Act, or the ACA – is a law
enacted to ensure that all Americans have access to affordable health
insurance. It does this by offering consumers discounts (known as tax
credits) on government-sponsored health insurance plans, and by
expanding the Medicaid assistance program to include more people who
don't have it in their budgets to pay for health care.
The ACA also changed some of the rules insurance companies have to
follow. For example, in the past if you had diabetes or some other
preexisting medical condition, you could be turned down for insurance or
your cost for coverage would be astronomical. Now you can't be turned
down for any reason and the hope is that costs will be contained.
You buy Obamacare plans on healthcare.gov if your state participates in the federal program or from your state's healthcare website if it isn't.
Also, if you get insurance through your employer, you don't have to
worry about any of this. Obamacare is mainly for people and small groups
who pay for their own insurance.
Wow. Everyone gets health insurance tax credits. That's fantastic.
No again. You only receive discounts to help offset health insurance
costs if your household income is between one and four times the Federal
Poverty Level, a number the government uses to determine the minimum
amount of money needed for food, shelter and other basic needs. You can
elect to apply these credits to your premiums to lower your monthly
insurance bill or wait until the end of the year and declare them on
your tax return.
Dozens of websites have simple calculators to help you determine whether or not you qualify for tax credits.
But my income doesn't fall into that range.
If you make too much money to qualify for credits, you can still buy a
plan on the federal insurance marketplace or your state's exchange but
you won't get any discounts, Pollitz said. However, you may still get a
good deal, so it's worth checking out, she advised.
If you make less than that, you could be eligible for Medicaid or some
other government assistance. Again, Pollitz said it's worth exploring
your options no matter what.
Does everyone have to buy the same plan?
Nope. Plans are divided into four "metal tiers" that run from Bronze all
the way up through Platinum. The main difference between the levels is
price and cost-sharing percentages. Bronze plans are the cheapest but
only pay 60 percent of your medical costs. Platinum plans are the most
expensive but pay 90 percent.
The trick is to choose a plan that meets your needs, keeps all your
favorite doctors in your network and covers your most frequently filled
drug prescriptions.
By the way, Pollitz offered this tip for those who have an income
between one and 2.5 times the Federal Poverty Level: Choose a Silver
plan that covers 70 percent of your medical bills. You'll automatically
be upgraded to a Gold plan that pays 80 percent of the bills at no extra
cost.
There's all this talk about Obamacare deadlines and extensions. It sounds like I have a term paper due.
It's true that the government keeps shifting Obamacare-related dates
around so often there ought to be an organizer app for that.
As of this moment, here are the two important dates you need to know:
Monday, Dec. 23, 2013: The deadline for signing up for a plan on healthcare.gov. Some states and plans have extended this deadline.
Friday, Jan, 10, 2014: In most states, this is the date your first monthly insurance premium is due in order to have retroactive coverage for Jan. 1.
Some states have extended the payment deadline even longer. Double-check
your state's insurance marketplace website and your individual plan's
information.
If you miss your deadlines you won't be covered by the first of the year
but you can still sign up for a plan that kicks in later.
I've also heard I will be penalized if I don't buy insurance. Does that mean I will go to jail?
Relax. Pollitz said no one is going to jail over Obamacare. But any
American who meets certain income-based criteria must now, by law, have
insurance, Medicare or Medicaid or pay a penalty that will be levied
when you file your 2014 tax return.
The government just announced a big exception to this financial penalty:
For those who received a notice from their insurance company cancelling
their old plan because it wasn't up to snuff with Obamacare standards,
they'll be exempt from the penalty this year.
I've avoided signing up because I've heard the healthcare.gov website is a nightmare.
After a disastrous start, Pollitz said that healthcare.gov is actually
much improved. For the most part, consumers report that they're able to
sign up for a plan with few glitches. Most state exchange websites are
performing much better too, Pollitz said, though some are still a mess.
I'm a Senior and on Medicare.
Seniors on Medicare can just ignore this whole Obamacare thing. You're covered.
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