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Obamacare: What you should know

Last Updated:2017-Nov-01
Principal Writer:Barry Shatzman

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Court Cases
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More Information
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Health Care Policy

Related Bills

Patient Protection and Affordable Care Act

2010 (HR-3590)

Related Court Cases

(2015) King v. Burwell
(2012) NFIB v. Sebelius


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Obamacare is a law defining our nation's health care policy

The Patient Protection and Affordable Care Act - often referred to as Obamacare - is the nation's public policy for health care.

Obamacare did not change the nation's basic model for health care - that for-profit insurance companies pay for a portion of our health care using money we pay to them as premiums.

It did change a few things, such as...

o Who can purchase insurance (and who must purchase it)

o What benefits and protections that insurance must provide

o How much that insurance will cost you

Obamacare helps most Americans - either directly or indirectly

How you are affected by Obamacare depends on your situation...

You don't receive health care insurance from your employer

If you don't receive health care insurance from your employer, and your income is greater than the Federal Poverty Level (FPL), then you must purchase coverage that meets the law's requirements. Otherwise, you will be required to pay a tax penalty.

Your income is less than that Federal Poverty Level

If your income is less than the Federal Poverty Level, Obamacare provides for virtually free health care under Medicaid.

Prior to Obamacare, each state set its own (often very restrictive) eligibility requirements for Medicaid. Obamacare's Medicaid Expansion provision expanded eligibility to virtually anyone who makes less than the Federal Poverty Level.

In 2012, however, the Supreme Court ruled that the federal government could not compel states to expand their Medicaid coverage. As of 2017, 19 states have rejected Medicaid expansion (even though the federal government covers 90 percent of the cost). In these states, the poorest residents have little access to health care.

The company you work for has more than 50 employees

If you work for a company with more than 50 employees, Obamacare requires that the company offer you health care insurance.

Those under the age of 26

Anyone under the age of 26 can be covered by their parents' policy.

Medicare and VA

If you have health care through Medicare or the Veterans Health Administration (VA), you remain covered under these programs.

Obamacare offers protections that did not previously exist

Obamacare added protections to ensure that you can obtain health care regardless of your current health. These protections did not exist prior to Obamacare. Most became effective in 2014.

o An insurance company cannot deny you coverage - regardless of your health. You cannot be charged differently based on any pre-existing condition you might have.

o Insurance companies can charge more for an older person - but the cost for an older person cannot be more than three times the cost for a younger person.

o All insurance plans must provide coverage for essential health benefits, including outpatient care, preventive care, mental health, and maternity care.

o Insurance companies cannot limit the amount they will pay over the lifetime of an insured person.

o Insurance companies cannot rescind coverage on someone if they get sick.

o Insurance companies must offer a way for a customer to appeal a denied claim.

The law also puts restrictions on insurance companies. They must spend at least 80 cents of every dollar on actual health care services. They cannot take more than 20 percent of premiums for profit and overhead.

Insurance companies also must have large premium increases approved by the federal government.

Obamacare provides significant help to pay for health care

As we mentioned previously, Medicaid Expansion means that anyone with income less than the Federal Poverty Level (FPL) is eligible for virtually free health care under Medicaid (unless they live in one of the 19 states have rejected Medicaid expansion).

But Obamacare also provides financial assistance to those with moderate incomes.

Premium subsidies help cover the cost of insurance

If your family's income is less than four times the federal poverty level, the government will help pay for a portion of your monthly premium.

Obamacare limits the portion of your income that you are required to pay. So if insurance companies increase their premiums, the subsidy increases accordingly and your actual cost stays virtually the same.

The amount of the subsidy is calculated based on the cost of a silver-level plan. This means you are not necessarily limited to the cheapest plans - which might offer cheaper premiums but pay much less for your care.

If your family's income is more than four times the federal poverty level, you are not eligible for assistance. You would pay the full premium - and could be affected by annual premium increases.

Cost sharing reduction subsidies

Health care costs more than just premiums. And your insurance won't do you much good if you can't afford the out-of-pocket expenses that are part of receiving the care you need.

If your family's income is less than 2.5 times the federal poverty level, you are eligible for Cost Sharing Reduction Subsidies. These subsidies significantly reduce your out-of-pocket expenses such as deductibles and copayments.

This benefit is available only with silver plans. So even though a lower-quality bronze plan might have a slightly lower premium, the amount you actually spend could be much less with a silver plan.

What are the health care exchanges?

Those who must buy their own health care insurance can do so directly through a private insurance company or through an online marketplace (either from your state or the federal government) - referred to as insurance exchanges.

However, the previously-mentioned subsidies are available only if you purchase insurance through an exchange.

The intent of Obamacare was that each state would set up its own exchange. Several states did this. Others, for various reasons, do not have their own exchange. Residents of states without an exchange use the one set up by the federal government (

Regardless of whether the exchange is maintained by a state or the federal government, it will provide the same basic features:

o It will list available policies in a way that will make it easy to compare benefits and costs.

o It will provide a way for you to buy any of the listed policies.

o It will allow you to report information about your family and income to determine your eligibility for subsidies or Medicaid.

Dates you should know

These were the key dates for the Open Enrollment period for 2018. The Open Enrollment period ended Dec. 15, 2017.

Note that the Open Enrollment period for 2018 was shortened from previous years. It ended Dec. 15 (it previously went through the end of January).

November 1, 2017: Open Enrollment Starts
This is the first date you can view or purchase actual policies and premiums on your state's (or the federal) insurance exchange. Note that coverage for these policies does not begin until Jan. 1, 2018. Click here to find your exchange.

December 15, 2017: Open Enrollment Ends
This is the last day you will be able to purchase insurance on the exchange for coverage in 2018.

January 1, 2018: Coverage begins
This is the first day coverage can begin for policies bought through the health insurance exchanges. However, this depends on when you applied. It can take up to 6 weeks from the time you apply for the policy to take effect.

If you do not have health care insurance that conforms to the standards of the Patient Protection and Affordable Care Act by the end of the Open Enrollment period, a few things will happen:

o You will be required to pay a tax penalty on your 2018 taxes (that you file by April 2019). For those not having insurance in 2017, the penalty was at least 2.5 percent of your income (minimum $695 per adult).

o You will not be able to buy insurance on the exchange until the next open enrollment period. Note: There are exceptions to this such as losing insurance related to a job or a change in your family makeup.

o You still may be able to buy health care insurance directly from a company. However, they would not be required to accept you (for example if you're sick or just suffered an injury). Even if you do buy insurance after this date, you still will be subject to the tax penalty.

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