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. Find out how these change under Trump's plan to repeal and replace Obamacare.

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. That includes plans you received through the Consolidated Omnibus Budget Reconciliation Act. You can retain a retiree plan, Medicare, Medicaid, CHIP, Peace Corps Volunteer plans, TRICARE and other veterans’ health care programs. If you have any questions, see qualifying health plans or ask your health coverage provider.

Check to see if your plan was in existence March 23, 2010. If so, it was "grandfathered in." That means it doesn't have to provide the 10 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. If you become sick, your insurance company can no longer drop you even if you made a mistake on your health insurance application.
  1. It can't limit the coverage you receive over your lifetime.
  2. If you have a pre-existing condition, you no longer have to worry about losing coverage if you change your insurance. 
  3. Insurance companies must submit justification to the states for all rate hikes. Obamacare provides funding to the states for administering this.
  1. You may have received a rebate from your insurance company. Obamacare requires that they spend at least 80 percent of premium payments on medical services instead of on 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 and force them onto Obamacare. This happened to at least 1 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. These companies know their workers can get coverage on the health insurance exchanges. Others may prefer to shop the exchanges themselves to get a better deal. The Congressional Budget Office estimates between 3 million to 5 million employees lost their existing plans as a result.(Source: “The Effects of the Affordable Care Act on Employment-Based Health Insurance,” CBO, 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 increases 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 12. Without it, you'll pay as much as 2 percent of your income on your 2017 tax return. Calculate the exact amount and see how much it goes up in 2018 in How Much Will Obamacare Cost Me?

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 previously received. They get a $4,500 subsidy for individuals or $10,000 for family coverage to help pay the cost. (Source: “Members Only,” Wall Street Journal, August 8, 2013.)

The enrollment period for 2018 is from November 1 to December 15, 2017. The 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 health care 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 percent or less of the federal poverty level. The federal government funds Medicaid expansion 100 percent through 2017 and 90 percent after that. 

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 percent of the poverty level. Instead of waiting for your annual tax rebate, you can get the tax credit each month. 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, your state hasn't expanded Medicaid or you are in a situation of hardship. 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 "doughnut hole." By 2020, the ACA will eliminate the doughnut hole.

If You Are a Small Business Owner

25 employees or less - You can get a tax credit of 50 percent of the costs of health insurance purchased on the Small Business Health Options Program Marketplace. Non-profits receive a 35 percent 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. This covers all but the first 30 employees. This 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, aged 55 to 64 years old, you can get federal financial assistance. Find out how at Early Retiree Reinsurance Program. See 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: “The Healthcare Law and You,” Healthcare.gov.) 

More on Obamacare

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