Obamacare Summary

Think Obamacare Doesn't Affect You? Think Again.

Doctor Discussing Medicine in His Clinic With a Patient
Read this quick Obamacare summary before you talk to your doctor. Photo: Digital Vision/Photodisc/Getty Images

Obamacare is the familiar name for the Patient Protection and Affordable Care Act of 2010. Even if you didn't buy insurance on the exchanges, it has already affected you, someone you know, and the economy overall. Here's a quick summary of how Obamacare affects you, depending on your situation. 

If You Already Have Health Insurance

You can keep your existing insurance if it's an individual plan you bought yourself.

You can also keep an employer plan (including COBRA), a retiree plan, Medicare, Medicaid, CHIP, TRICARE and other veterans health care programs, and Peace Corps Volunteer plans. If you have any questions, see qualifying health plans, or ask your health coverage provider.

Check to see if your plan was in existence on March 23, 2010, and was therefore "grandfathered in." That means it doesn't have to provide the ten essential health benefits. Many people have had their plans canceled by the insurance company because it didn't comply with these standards.

Obamacare improved the benefits you receive in the following seven ways:

  1. It allows you to add your children up to age 26 to your health insurance plan.
  2. You won't have a co-pay for wellness or pregnancy exams.
  3. Your insurance company can no longer drop you if you become sick, even if you made a mistake on your health insurance application.
  4. It can't limit the coverage you receive over your lifetime.
  1. If you have a pre-existing condition, you no longer have to worry about losing coverage if you change your insurance. 
  2. Insurance companies must submit justification to the states for all rate hikes. Obamacare provides funding to the states for administering this.
  3. You may have received a rebate from your insurance company. Obamacare requires that they spend at least 80% of premium payments on medical services, instead of advertising and executive salaries. If they can't, the money goes back to you.

    Many people are concerned that their company will cancel their health insurance, forcing them onto Obamacare. That did happen to at least one million employees. They found their insurance company no longer wanted to provide non-compliant plans. Others worked for companies that found it more cost-effective to pay the penalty, knowing their workers can get coverage on the health insurance exchanges. Others may prefer to shop the exchanges themselves to get a better deal. The CBO estimates between 3-5 million employees lost their existing plans as a result.(Source: CBO, The Effects of the Affordable Care Act on Employment-Based Health Insurance, March 15, 2012)

    But that didn't happen to most people, and here's why. Companies offer health insurance as a benefit to attract good employees. It's cheaper for them than higher wages because they don't have payroll taxes.

    If anything, your premiums should decrease over time.  Obamacare's primary goal is to lower health care costs. By allowing parents to add their children, more healthy people are paying premiums without using the system.

    That increase health insurance companies' profits. They should offer lower premiums over the long run. Similarly, Medicare recipients now have more of their prescription costs covered. That allows them to continue taking medications needed to prevent emergency room visits.

    Everyone is required to have health insurance. That means that more people will use preventive care, instead of waiting until they need the emergency room. The average emergency room visit is $1,265. Hospitals have to eat this cost for indigent patients. They also transfer the costs to insurance companies or Medicaid. When these expenses are prevented, hospital costs, and, therefore, overall healthcare costs, will drop. 

    If You Don't Have Health Insurance

    You are required to have insurance for at least nine months out of every twelve. Without it, you'll pay as much as 2% of your income on your 2016 tax return. Calculate the exact amount, and see how much it goes up in 2016, in How Much Will Obamacare Cost Me?

    The enrollment period for 2016 closed on January 31, 2016.  It reopens on November 1, 2016 — January 31, 2017, for coverage in 2017. If it's any consolation, members of Congress are also mandated to get their health insurance through the same exchanges, instead of the government-provided health insurance they get now. They get a whopping $4,500 subsidy for individuals ($10,000 for family coverage) to help pay the cost. (Source: WSJ, Members Only, August 8, 2013; Affordable Care Act)

    Exchanges allow you to compare health plans before you buy one. The exchanges also help you find out if you qualify for subsidies or free healthcare through Medicaid. States are given substantial Federal grants to fund the exchanges and expand Medicaid. Despite this incentive, not all of them signed up. Find out your state's status.

    If You Can't Afford Health Insurance

    You will qualify for Medicaid if your income is 138% or less of the Federal poverty level. The federal government funds Medicaid expansion 100% through 2017, and 90% after that. Learn more about Medicaid.

    If you don't qualify for Medicaid, you may still be eligible for a subsidy. You will be eligible if your income is under 400% of the poverty level. You can get the tax credit each month, instead of waiting for your annual tax rebate. You may also qualify for reduced copayments and deductibles. Here's How to Get Obamacare.

    You may also qualify for an exemption from the tax if your income is too low, and your state hasn't expanded Medicaid, and a variety of other hardship situations. Find out more in Obamacare Exemptions.

    If You Are on Medicare

    You now receive many wellness and preventive care visits for free. See Medicare Preventive Services for the full list. If you have Medicare Part D, Obamacare helps pay for your prescription drugs if you fell into the "donut hole." By 2020, the donut hole will be eliminated.

    If You Are a Small Business Owner

    25 employees or less - You can get a tax credit of 50% of the costs of health insurance purchased on the SHOP marketplace. Non-profits receive a 35% credit. 

    Less than 50 employees - You don't have to pay a fine if your workers get tax credits through an exchange.

    50 or more employees - You must provide health insurance or pay a tax of $2,000 per employee (for all but the first 30 employees). That started in January 2015.

    Less than 100 employees - You can shop for insurance on the exchanges in 2014 that should provide cheaper alternatives than are available now. If you offer health insurance as a benefit to early retirees 55-64, you can get Federal financial assistance. Find out how at ERRP. For more resources to help small businesses comply with Obamacare.

    Note - This article summarizes Obamacare benefits. To find out about taxes and fines, please see Obamacare Taxes. (Source: Healthcare.gov, The Healthcare Law and You

    More on Obamacare

    To save money on Obamacare, see my book The Ultimate Obamacare Handbook (2015 - 2016).

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