Affordable What Act? Like it or not, Obamacare is coming. Here’s what to expect

Posted Sept. 08, 2013, at 5:34 a.m.
Last modified Sept. 09, 2013, at 6:05 a.m.

The nation’s most pivotal health reform in 50 years kicks into high gear this fall. You’ll be affected. Here’s how.

The Patient Protection and Affordable Care Act has been called a lot of things since it became law three years ago. Also known as the ACA or Obamacare, the law is derided as “bad for America” and lauded as a “dream come true,” depending on whom you ask.

Sick of all the rhetoric? Just want to know what will change the next time you visit the doctor’s office or the pharmacy counter? You’re not alone.

Roughly half the public reports that they don’t have enough information about the act to understand how it will affect them and their family, according to an August poll by the Kaiser Family Foundation. Many people remain confused about the law’s status, with 44 percent thinking it has been repealed (8 percent) or overturned by the U.S. Supreme Court (5 percent), or unsure whether it remains the law (31 percent).

(The poll also found that only 8 percent of people said they trust the news media “a lot” for information about the health care law. Ouch. We’ll do our best here to boost that number.)

Sorting through all of the information is no easy feat. Search “Affordable Care Act” on Google and you get a dizzying 111 million results.

Let’s start with the basics — why the act was passed, what it does, and what it doesn’t do.

The ACA is the law of the land

The Supreme Court in June 2012 upheld a key part of the law, ruling 5-4 in favor of the requirement that, starting in 2014, individuals either obtain health care coverage or pay a tax. The justices also upheld a major expansion of the Medicaid health insurance program for the poor, one of the chief ways the law sought to expand coverage of the uninsured. But they ruled that the federal government cannot force states to participate.

About half the states, including Maine, have resisted expanding Medicaid, at least for the time being.

As for other threats to the law, Republicans in Congress have repeatedly tried to repeal it, albeit unsuccessfully. The latest attack on the law, a plan championed by some conservative Republicans to strip the act’s funding, has garnered plenty of headlines. Yet many other Republicans don’t support that effort, and a majority of the public disapproves of defunding even though the law remains broadly unpopular, according to Kaiser’s August poll.

Despite what you may have heard, the ACA is not universal health care, where the government, rather than private insurers, pays for all health care costs for its citizens. The law is built on the existing system, with some people covered through government programs such as Medicare and Medicaid and most others through their jobs.

The act overhauls America’s dysfunctional health care system.

Considered President Barack Obama’s signature legislation, the 900-page Affordable Care Act is complicated and sometimes perplexing, even for experts. Its enormous scale and ambitious approach to expanding health insurance to millions of Americans often gets compared with the rollout of Medicare in 1966.

While its merits have been fiercely debated, the reason the ACA exists is widely accepted: America’s health care system is sick. It is exorbitantly expensive and drains money from the economy, businesses’ profits and workers’ paychecks.

The U.S. spends about 18 percent of its gross domestic product, or $2.5 trillion annually, on health care, far more than other countries that offer coverage to all of their citizens. Despite the money we spend, Americans’ health isn’t great. The U.S. ranks between 25th and 33rd among all nations in health outcomes.

Maine ranks fifth nationally for per capita health care spending at $8,521 annually, 25 percent higher than the national average. At the same time, Mainers also earn 10 percent less than the national average by median household income. Not a healthy combination.

The American health care system traditionally has paid doctors and hospitals based on the number of visits, procedures and medical devices they provide, rather than the quality of the care patients get. The ACA takes initial steps to slow spending in the long term without undermining care. It includes provisions designed to better coordinate care, reduce preventable complications during hospital stays, and encourage the adoption of improved health information technology.

Some experts think these cost-saving provisions don’t go far enough.

The ACA expands health coverage to the uninsured and seeks to improve the quality of health insurance for those who have it.

Most of us need health insurance to afford care, but 50 million Americans — including 133,000 Mainers — don’t have coverage. Many simply can’t pay for it.

The ACA attempts to insure more Americans in several ways.

First, the law expands Medicaid to cover more low-income individuals and families (at least in other states besides Maine that are on board with the expansion).

Many of the reforms target the most common way Americans get health insurance — through work. The ACA seeks to fill in the gaps where existing coverage often falls short in the “employer-sponsored” system of health insurance.

If you already have insurance through your job, the only changes you will see under the law are some new benefits and better protections from insurers’ efforts to restrict your coverage and earn big profits. You don’t need to take any action or do anything differently.

The same goes for people covered through Veterans Affairs and Medicare. Other than some improvements, such as the closure of the “doughnut hole” in Medicare’s prescription drug coverage, things won’t change much. You can go back to living your life, or eating that doughnut, or whatever else you were doing.

If you’re one of the relatively few people who don’t get coverage through work or the government, listen up because things will change plenty. The law created new health insurance “marketplaces” where consumers and small businesses can shop for private health plans. The marketplaces, which the White House formerly called “exchanges,” are a key component of the health reform law. They open for business on Oct. 1 — by phone, online and snail mail — hence all the Obamacare chatter as of late.

The marketplaces are designed to make it easier to compare plans on an apples-to-apples basis, with all plans required to provide a basic set of benefits.

While some states will operate the marketplaces themselves, Maine and 26 other states chose to let the federal government run them. Consumers also can apply through the marketplaces for federal help to afford their coverage.

Small businesses with fewer than 50 workers also can shop on the marketplaces and those with fewer than 25 employees can apply for tax credits.

The changes will extend insurance to about 33 million more Americans, according to the Congressional Budget Office. That’s expected to boost the number of insured Americans from 82 percent to 93 percent. Some people will be left out, including undocumented immigrants and some individuals in states that don’t expand Medicaid who won’t be eligible for either Medicaid or the federal subsidies. The latter could amount to tens of thousands of people in Maine; we’ll delve into that later in the series.

The ACA requires you to buy insurance and larger companies to offer coverage to their workers.

With few exceptions, all Americans must have health insurance by Jan. 1, 2014, or pay a penalty. Known as the individual mandate, this building block of the law is both key to its success and one of its least popular components.

The ACA extends insurance to nearly everyone, including sicker people who need expensive care and often are denied coverage. To pay for that care, insurers need a wider pool of consumers buying their policies, especially young, healthy individuals who use fewer services. The mandate was adopted to ensure this happens and to avoid a situation in which only sick people enroll, which would drive up premiums. Whether the individual mandate will work as hoped remains up for debate.

Only those who have affordable coverage available to them but choose not to sign up will be hit with a penalty when they file their income taxes.

Beginning in 2015, employers with at least 50 full-time workers also must offer health insurance to their employees or face a penalty. Those plans must be affordable and pay at least 60 percent of covered health services.

So there you have it, ACA 101. An Obamacare primer. Health reform for dummies (or people just trying to figure out what all this means between going to work, trying to find a job, taking the kids to school, or feeding the dog).

Next up: Buying coverage on the marketplace? What you need to know.

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