In 2010, big changes in America’s healthcare system rolled out when the Affordable Care Act(ACA), or Obamacare, went into effect. A recent poll found that Americans are pretty much split down the middle about their feelings toward Obamacare, with 27% supporting, 38% opposing, and 34% with neutral feelings regarding the law.4 Regardless of where you fall on this spectrum, a majority of Americans believe that the law will not be repealed, but adjusted.3 That said, it is important to understand just how Obamacare affects you and your family.

Many people who have a health insurance plan purchased through the Health Insurance Marketplace (healthcare.gov) throw around the phrase “I have Obamacare.” Others, who have other coverage, through their job for instance, say they “do not have Obamacare.” The fact is that a certain way of enrolling in health insurance alone is not Obamacare, nor is qualifying for a subsidy, or choosing a particular plan. The Affordable Care Act/Obamacare is a health care reform law created to help regulate health insurance in America, ensuring that all individuals and families have access to healthcare that works for them.13 Because this law pertains to all Americans, understanding how major medical insurance was regulated before Obamacare and how it is regulated now are crucial in understanding what it means to you.

Health Insurance Requirement

Perhaps the biggest change for health insurance under Obamacare is the requirement to have minimum essential coverage with a major medical insurance plan (also referred to as a qualified health plan). Although minimum essential coverage sounds more like a list of individual insurance qualifications, it is actually a list of qualifications that a major medical plan must meet in order to be considered a qualified health plan. For instance, all plans purchased through the Health Insurance Marketplace, obtained through a public health program, or through an employer are considered minimum essential coverage.9 Prior to Obamacare, individuals were not required to have health coverage. However, because health insurance was not easily obtained or affordable, 50.7 million Americans were uninsured in 2009, just a year before the Affordable Care Act was signed into law.6 Below shows the decrease of uninsured in the U.S. from 2013 to 2015.

individuals without health coverage by year

Because minimum essential coverage is a requirement, there will of course be a consequence for not meeting it. This consequence comes in the form of a tax penalty, which you will be subject to paying at the end of the year from your federal income tax. In 2014, individuals who did not hold minimum essential coverage paid either $95 per adult and $47.50 per child under age 18 or 1% of their annual household income, whichever was greater. In 2015, those without minimum essential coverage will be penalized $325 per adult and $162.50 per child under age 18 or 2% of their annual household income, whichever is greater. Each year, the penalty amount increases, and according to healthcare.gov, will be $695 per adult and $347.50 per child under age 18 or 2.5% of annual income.12

The Health Insurance Marketplace

This change goes hand-in-hand with the requirement to have a health insurance plan with minimum essential coverage. Because health insurance is now mandatory, the government needed to create a location where people could turn to get themselves insurance. This location is the Health Insurance Marketplace, or the Marketplace for short, found at healthcare.gov. The majority of states require their residents to use this Marketplace, but fifteen states have set up their own for their residents. In both instances, this is where individuals who do not have health coverage through their employer, a public program, or otherwise can find a plan that fits their needs and enroll in it all at the same time.7

Before your options for health plans are provided, you will be asked a few simple questions, which will help determine your eligibility for certain plans. After answering the questions, you will know if you are eligible for Medicaid or the Children’s Health Insurance Program (CHIP) or if you can proceed to find a health insurance plan through an insurance company based on your income. While you can go through this process alone, we suggest contacting a licensed health and life insurance agency in your state like Health Choice One. They will be equipped to assist you in sifting through the plans and help you enroll in one that best fits your situation.

Accepting Pre-existing Conditions

Before Obamacare, it was much more difficult to get affordable health coverage, or even any coverage at all, if you had a pre existing condition, meaning if you were ill prior to applying for your health insurance. Before the Affordable Care Act went into effect, applications for insurance were medically underwritten by the insurance company. This meant that when you applied for health insurance and were required to document your health history, underwriters would determine your coverage eligibility based off of your health.

If someone had previous health conditions, the insurance provider could raise that person’s rates, limit their coverage, or even deny them coverage all together. Obamacare takes that control away from insurance providers and requires them to provide coverage, regardless of previous health history. In turn, this actually makes the insurance application process more time-efficient. When applications had to be medically underwritten, the process could take weeks. Now, those applying for health insurance can be covered in a small fraction of that time.2

Coverage for Young Adults

Once upon a time, young adults faced the challenges of getting themselves affordable health insurance. In pre-Obamacare America, children were typically kicked off of their parents insurance plan around the age of 19, or a little older if they were going to school full-time.8 As if that age isn’t hard enough, add the struggle of finding health coverage that you can afford right out of high school- not an easy task!

The Affordable Care Act changed these guidelines, and life got a little less confusing for young adults. Children are now able to remain on their parents’ health insurance plans until they are 26 years old in most states (and 30 years old in Florida).8, 2 This is huge for young adults, who will no longer be forced to pay high costs for health care out-of-pocket or neglect seeking care because they could not afford to hold health insurance on their own.1

4.5 million young adults have been able to obtain health insurance under this provision and others since the Affordable Care Act went into effect

https://www.whitehouse.gov/blog/2015/01/29/45-million-young-adults-have-gained-coverage-2010-improving-access-care-and-benefitt

Preventive Health Services

Preventive health screenings are an important practice for ensuring you remain healthy. Before the implementation of the Affordable Care Act, most insurance companies would not cover preventive services (outside of age screening guidelines) such as colorectal screenings, mammograms, or even something as simple as cholesterol screenings. A colonoscopy alone without assistance from insurance could cost anywhere from a few hundred dollars to well over a thousand dollars.11

Recognizing that these screenings are crucial in maintaining your health, Obamacare requires all qualifying health insurance plans, and many other private insurance plans, to cover these services and many others at no charge to you.2, 10 What’s even better is that all qualified health insurance plans do not require you to meet your yearly deductible to qualify for these free-of-charge services, nor will they require a copayment or coinsurance. However, you must seek these services from a network provider.10 With that being the only stipulation to free preventive care, it’s a pretty good deal!

The Power of Insurance Companies

Before 2010, insurance companies had a great deal of power when it came to how your health insurance plans operated. They had the authority to limit how much they would cover for plan benefits, increase premiums, and as previously mentioned, restrict coverage based on pre-existing conditions. With the Affordable Care Act, insurance companies are much more heavily regulated in these areas.

Cost Limits on Coverage

Before, insurance companies could limit how much they would spend covering your benefits. Some plans had a lifetime limit, which would not cover over a certain amount, regardless of how long you had the plan. So if within the first two years of having that plan you reached your lifetime limit, your insurance company would cover nothing beyond that and any additional cost would be up to you. Similarly, many plans had an annual limit with set a cap on how much they would cover each year. Insurance companies offering individual health plans and job-based plans are prohibited from doing this under the Affordable Care Act.2

Rate Increases

Prior to the Affordable Care Act, insurance companies also had the ability to raise premiums without having to provide too much of an explanation. Now if an insurance company raises their rates by 10% or more, they must publicly justify their reason for doing so.2 The requirement to offer a public explanation protects you from being charged more than is necessary for your insurance coverage.

Claim Denials

Not only can you now have the peace of mind knowing that you are paying a reasonable rate for your health coverage, but you can contest any claim denials. Should you have a claim that is denied, you can appeal the decision made by your insurance company, and request that they review your claim again to ensure that the correct decision was made fairly and justly. If the claim comes back denied once again, you may request an external review. Requesting this third review of your claim will have an independent, unbiased third-party review your claim. If at this point the claim comes back as approved, your insurance company will be required to reverse their decision and cover your claim.2

Cancelling Your Coverage

Mistakes happen, right? That wasn’t the philosophy of most insurance companies prior to Obamacare, because if you made a mistake on your insurance application, they could cancel your coverage and/or require you to pay back anything they have paid out for a claim. If you make a mistake or accidentally leave out a little piece of information that isn’t particularly relevant to your health, the law prohibits insurance companies from cancelling your policy. However, if you blatantly lie or intentionally omit pertinent health information, that is still considered a valid reason to require you pay back any money paid out for a claim, or cancel your policy altogether.5

Go Forth and Get Covered

Now that you have the 411 on how much health insurance has changed in recent years, you will be better equipped when the time comes for you to enroll in a major medical insurance plan. Maybe you will feel more at ease with your decision to purchase a plan, knowing that preventive services will no longer break the bank, or that you can’t be turned down for a pre-existing condition. Maybe now you understand how to go about getting enrolled in health insurance plan through the Marketplace- you can do it yourself, or you can contact a licensed broker to help save you some time and trouble. Or maybe you’ve simply become aware of the fines ahead of you at the end of the year should you choose not to enroll in a qualified health plan. Whatever the reason, you should now feel more comfortable and confident when you sign up for a major medical plan. Happy enrolling!

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Citations

  1. 15 economic facts about millennials. (2014, October). Retrieved from Whitehouse.gov website: https://www.whitehouse.gov/sites/default/files/docs/millennials_report.pdf
  2. About the law. (2015, August 13). Retrieved from U.S. Department of Health & Human Services website: https://www.hhs.gov/healthcare/rights/index.html
  3. Alonso-Zaldivar, R., & Junius, D. (2015, March 28). AP-GfK poll: Obama’s health care fails to gain support; Americans expect fixes, not repeal. Retrieved from AP GfK website: https://ap-gfkpoll.com/featured/our-lastest-story
  4. Alonso-Zaldivar, R., & Swanson, E. (2015, May 5). AP-GfK poll: Can Supreme Court be fair in health law case? Retrieved from AP GfK website: https://ap-gfkpoll.com/featured/findings-from-our-latest-poll-17 (supporters opposers of ACA)
  5. Cracking down on frivolous cancellations. (n.d.). Retrieved September 9, 2015, from HealthCare.gov website: https://www.healthcare.gov/health-care-law-protections/cancellations/
  6. Deparle, N.-A. (2010, September 16). The Affordable Care Act helps America’s uninsured. Retrieved from https://www.whitehouse.gov/blog/2010/09/16/affordable-care-act-helps-america-s-uninsu red
  7. Health insurance marketplace basics. (n.d.). Retrieved September 9, 2015, from HealthCare.gov website: https://www.healthcare.gov/quick-guide/one-page-guide-to-the-marketplace/
  8. Health coverage for children under 26. (n.d.). Retrieved September 9, 2015, from HealthCare.gov website: https://www.healthcare.gov/young-adults/children-under-26/
  9. Plan types that count as coverage. (n.d.). Retrieved September 9, 2015, from https://www.healthcare.gov/fees-exemptions/plans-that-count-as-coverage/
  10. Preventive health services for adults. (n.d.). Retrieved September 9, 2015, from HealthCare.gov website: https://www.healthcare.gov/preventive-care-benefits/adults/
  11. Tangka, F. K., Subramanian, S., Beebe, M. C., Hoover, S., Royalty, J., & Seeff, L. C. (2013, August 1). Clinical costs of colorectal cancer screening in 5 federally funded demonstration programs. Retrieved from U.S. National Library of Medicine National Institute of Health website: https://www.ncbi.nlm.nih.gov/pubmed/23868481
  12. The fee you pay if you don’t have health coverage. (n.d.). Retrieved September 9, 2015, from HealthCare.gov website: https://www.healthcare.gov/fees-exemptions/fee-for-not-being-covered/
  13. The Patient Protection and Affordable Care Act detailed summary. (n.d.). Retrieved September 9, 2015, from Democratic Policy and Communications Center website: https://www.dpc.senate.gov/healthreformbill/healthbill04.pdf