What Is Obamacare? The ACA and What You Need to Know

Obamacare is the Patient Protection and Affordable Care Act of 2010.

The Affordable Care Act of 2010, also known as Obamacare was signed into law on March 3, 2010. It was phased in over four years. Every citizen was required to have health insurance by March 31, 2014, or face an income tax surcharge.

Everyone can choose how to get coverage. If they already have a plan, whether through their employers, Medicaid, Medicare, or privately, they can keep it. Those who couldn’t get health insurance have additional options. They can purchase it from a health insurance exchange (and possibly get a subsidy). They may be eligible under expanded Medicare guidelines. Many people found they qualified for exemptions.

Most people think it only affects health insurance, but it has already changed the way America delivers health care itself. This Act requires you to have health insurance at least nine months out of every twelve or be subject to a tax.

Under the Affordable Care Act “Obamacare” pre-existing conditions are not excluded by insurance companies. Obamacare will allow individuals and families to get health insurance and get treated for their pre-existing conditions.

How It Affects You

• The health insurance exchanges are open for enrollment between November and January each year. If you miss the window, you can still use the exchanges to buy interim private insurance or apply for Medicaid. You can also use them to compare plans for the future. Some exchanges are run by states and some by the federal government. Keep in mind you should compare not just your monthly premium, but your anticipated overall health care costs. That includes annual deductible, coinsurance percentage and copayments.

If you already have insurance, you can keep it if:

1. It was in existence before March 23, 2010. In that case, it’s been grandfathered in.
2. Your employer keeps its plans. But many companies used this opportunity to drop coverage, or change how they provide it.
3. Your insurance company keeps your plan. Many have canceled plans that don’t meet the minimum requirements.

All insurance plans must provide services in the ten essential health benefits in order to comply with the Affordable Act. The ten essential health benefit categories are:

1. Preventive and wellness visits, including chronic disease management. Preventive care visits have no copay. Obamacare Affordable Care Act Milwaukee, Wisconsin requires that all 50 procedures recommended by the U.S. Preventive Services Task Force be covered as preventive services. These include well-woman visits, domestic violence screening, and support for breastfeeding equipment and contraception.
2. Maternity and newborn care. That must be provided without cost since it is preventive care.  Most young people who don’t have insurance will find this is a needed benefit if they become pregnant.
3. Mental and behavioral health treatment. It includes treatment for alcohol, drug and other substance abuse and addiction. Insurance companies avoid paying for these diseases, which need a long-term commitment. They raise co-pays to as high as $40 a session and limit the number of therapist visits.
4. Services and devices to help people with injuries, disabilities, or chronic conditions. Most plans cover services and equipment that help you recover from temporary injuries, like a broken leg. The ACA requires coverage for equipment needed to treat a chronic disease, like multiple sclerosis.
5. Lab tests. Plans must pay 100 percent of the cost of tests if doctors use them to diagnose an illness. Otherwise, regular copays and deductibles apply.
6. Pediatric care. Dental and vision care must be covered.
7. Prescription drugs. Plans must cover at least one drug in every category in the S Pharmacopeia. Your out-of-pocket drug expenses count toward your deductible. That wasn’t true for all insurance plans before the ACA. They also usually offered this at a cost.
8. Outpatient care.  Most health insurance plans covered this already.
9. Emergency Room Services. Most plans include this. Some charge extra if you go to a hospital that’s out of their network, or go without pre-authorization. Obamacare plans don’t charge extra.
10. Hospitalization. Not all plans cover enough of this tremendous cost. Most people don’t realize that a day in the hospital can cost between $2,000 -$20,000 a day. If you have a high-deductible plan or a one with a low maximum, you may be surprised by how much you wind up paying out-of-pocket. (Source: AARP, The Health Care Law’s 10 Essential Benefits, September 2013)

Health insurance companies can’t exclude those with pre-existing conditions. They also cannot drop those who get sick. Parents can put their children on their plans up to age 26. If your plan began before March 23, 2010, then it might be “grandfathered in” and not have to provide all these benefits. But even if you have insurance, it will be worth your time to compare it on the exchanges.

If you have Medicare, the “doughnut hole” gap in Prescription Drug coverage will be eliminated by 2020.

If You Can’t Afford Insurance – Medicaid was extended to those who earn up to 138 percent of the federal poverty level. But not all states have elected to expand Medicaid, even though the federal government subsidizes it. If you live in a state where you are eligible for Medicaid, but the state won’t give you coverage, you won’t have to pay the tax if you can’t get insurance.

The poverty level usually increases each year to keep up with inflation. Those who earn too much for Medicaid will receive tax credits if their income is below 400 percent of the poverty level.

The credit is applied monthly, rather than as an annual tax rebate. There are also reduced copayments and deductibles.

How much Obamacare Affordable Care Act Milwaukee, Wisconsin costs you depends on five factors: your age, income, family size, location and the type of plan you choose.  That’s because the Affordable Care Act provides subsidies for middle-income individuals, families and small businesses. It also expands free Medicaid for low-income households. It taxes higher-income families, businesses that don’t provide health benefits and people who don’t sign up for insurance, unless they are exempt.

First, your cost depends on the plan category you choose. All health insurance plans fall into one of four categories. They all offer the same 10 essential health benefits. The four categories are:

1. Bronze – Has the lowest premiums, but only pays 60 percent of your health care costs. Pick this plan if you don’t expect a lot of medical bills.
2. Silver – Pays 70 percent of your covered medical costs, but the premiums are higher than the Bronze plan.
3. Gold – Pays 80 percent of your costs, with higher premiums than the Silver plan.
4. Platinum – Pays 90 percent of your costs, but has the highest monthly premiums. It will make sense to pick this plan if you have a chronic health condition.

The plans in each category allow you to compare monthly premiums, deductibles, copays and annual out-of-pocket maximums. That’s where it gets tricky. Even within the same category, the plan with the lowest premium may have the highest deductible.

You might end up paying more for health costs if you get sick than you would with a plan with a higher premium but lower deductible. So you’ve got to estimate how much actual health care costs will be, then determine the insurance plan that helps you cut the total cost the most.

Second, your costs depend on your age.

Health insurance companies are allowed to charge higher premiums for older people. But they can’t charge more than three times the premium for younger people.

Third is where you live. That’s because the cost of living, including health care, is higher in some cities than in others.

Fourth and fifth are your income and family size.

The Catastrophic Plan

When you’re shopping for coverage, you may be presented with an option for “catastrophic” coverage. This plan is reserved for young adults under the age of 30 who need basic emergency insurance. Certain adults over the age of 30 may also qualify for a catastrophic plan on the Obamacare Affordable Care Act Milwaukee, Wisconsin marketplaces if they meet specific hardship conditions. This type of plan is similar to short term health insurance in that it covers very little outside of true emergencies, but unlike short-term coverage, catastrophic plans also cover:

• Preventive services
• At least three visits with your primary care doctor each year
• All essential benefits provided by the ACA

Catastrophic plans come with high deductibles. Until you hit that deductible, you’ll be responsible for the total cost of your medical care. After you reach the deductible, your insurer will take care of the rest. For young, relatively healthy individuals, a catastrophic plan can make good economic sense. These plans qualify as ACA-compliant major medical plans, which means that you won’t be charged a penalty fee for not having coverage if you get one. They’re also much cheaper than the metal plans. The tradeoffs are higher deductibles and higher out-of-pocket costs.

3 things to know before you pick a health insurance plan

• The ‘metal’ categories: Bronze, Silver, Gold & Platinum
• Your total costs for health care: Premium, deductible & out-of-pocket costs
• Health insurance plan & network types: HMOs, PPOs, and more

Remember that plans also may differ in quality. For the 2017 plan year, HealthCare.gov is introducing a pilot program to present health insurance plan quality ratings (or ‘star’ ratings) for some plans. Plans in Virginia and Wisconsin will feature the quality ratings this year. Learn more about quality ratings.