Lots of folks have been talking about Obamacare and what it means to the community. I’ve been tracking the law since it passed in 2010 and now I’m helping to get it implemented. Now that healthcare reform is about to fully kick in, there’s been a lot of buzz about what it is and what it isn’t. To start things off, I think there’s got to be some clarity about the words we’re using.
Healthcare Reform is the changing of our healthcare system in our country. If we have another big change in the next 10 years, it will still be called Healthcare Reform, whatever changes we make. It is the change, not the law. The Patient Protection and Affordable Care Act (PPACA) is the law that was passed in March of 2010. It is known by most people as ObamaCare. Some people also call it by its shortened name, the Affordable Care Act (ACA). Just understand that all three; PPACA, ObamaCare, and ACA are the same exact thing, the law itself.
The health insurance exchange or marketplace is the system your state is setting up that allows you to buy insurance from different insurance companies. ObamaCare authorized these exchanges/marketplaces to allow regular people like us to compare prices and be protected from unfair practices of health insurance companies. Each state has different names for its exchange or marketplace.
So why did we have to go through Healthcare Reform?
Right now, the healthcare costs in our country are skyrocketing. There are a lot of debates about what is causing this, but it remains clear that healthcare costs are climbing faster than inflation, than our GDP, and will eventually bankrupt our families, companies, and country as a whole. On top of that, it has been getting harder and harder for people with pre-existing health conditions to buy and keep health insurance. If you had an illness like diabetes before the law was passed, it would be very hard or very expensive to buy health insurance. Insurance companies would also do mean things to customers that unfairly cancel your insurance, or limit how much they would pay for the your medical costs.
ObamaCare was primarily designed to solve these two problems; to protect people from unfair health insurance practices and to make health insurance more affordable. That’s why the law is called the Patient Protection and Affordable Care Act.
Health insurance is expensive, how does ObamaCare help make it more affordable?
The law does three big things for people who have a hard time paying for insurance.
First, the law expands Medicaid (Medi-Cal in California) to more people. Before Obamacare, Medicaid had a lot of rules that made it hard for low income folks to qualify to get Medicaid health insurance, and it required that you had an income of less than 100% of the federal poverty level. Now after Obamacare, the only rule is that you need an income of less than 133% of the federal poverty level and be legally present in the United States. That means more families qualify for free public health insurance, including young people. Some states are refusing to make this change though.
Second, anyone making under 400% of the federal poverty level who is legally present in the United States can get assistance from the government to buy insurance. That means that the government is willing to pay for part of your monthly health insurance premium if your income qualifies.
Third, it allows anyone under the age of 26 to get on their parents health insurance plan. Even when you’re living away from home, you can still be covered under your parents’ plan and not have to buy your own.
Will I get fined by ObamaCare if I don’t have health insurance?
First and foremost, if you already get health insurance through your job or on your own, relax, you don’t have to pay a fine. Plus, if you get health insurance from a public program like Medicaid or Medicare, you also don’t have to pay a fine.
If you are currently uninsured, starting next year, you will have to buy health insurance or sign-up for a public program, or else you will get a tax penalty of 1% of your income or $95 per adult, all the way up to $285 per family. You can only go three months without insurance, and you will be penalized for every month after that if you don’t have health insurance. This means you’ll have to buy health insurance by March 31st, 2014 to avoid penalties. These penalties will go up in 2015.
Whoa, why are they fining people without insurance?
Part of the reason of buying health insurance is that you get covered. You can get free access to check ups and other preventative services, as well as be protected from medical emergencies. The other reason is that if everyone buys insurance, the cost of healthcare will not rise as sharply in the future. The more we all pay into healthcare now, the cheaper it will be in the long run, especially when us young folks get older.