Everything you need to know about life under Obamacare

September 30, 2013

What is Obamacare?

It's more than just a bumper sticker. (REUTERS/Jessica Rinaldi)
It's more than just a bumper sticker. (Reuters/Jessica Rinaldi)

“Obamacare” is what we’ve all apparently decided to call the Patient Protection and Affordable Care Act, a set of health reforms passed by the Congress and signed into law by President Obama in March 2010.

The law itself touches on everything from how hospitals are reimbursed for care to whether chain restaurants post calorie counts on their menus. But, generally, by "Obamacare" most people mean the provisions of the law that relate to the efforts to insure about 30 million Americans through subsidized private insurance or government-provided Medicaid.

When is Obamacare?

Soon! Obamacare’s insurance marketplaces -- where people who don't get health insurance through Medicaid, Medicare or their employer will go to buy it -- begin open enrollment on Tuesday (Oct. 1). The law actually begins delivering insurance coverage, both through private plans bought on the marketplaces and through Medicaid, on Jan. 1.

Are you sure it will really start then?

Pretty sure. There have been some small delays in the functionality of different marketplaces. In the D.C. marketplace, for instance, consumers won’t be able to see their subsidies until November. In the federally-run marketplaces, small businesses won’t be able to shop online until November. But overall, the law looks on track for New Year's Day.

Will Obamacare be available in every state?

Some of it will, some of it won’t. The insurance marketplaces, and the subsidies that go along with them, will be available in every state and the District of Columbia. But the Medicaid expansion, which serves people making less than 133 percent of the federal poverty line ($31,322 for a family of four), was made optional by the Supreme Court. As of now, only 26 states are likely to participate in it come January.

What makes this particularly troublesome for the law (and, more to the point, for the uninsured) is that there are no subsidies for private insurance for people making less than the poverty line. So if you’re poor and in a state that hasn’t accepted the Medicaid expansion, you’re out of luck.

This is a lot to read. Can't you do it in cartoon form?

Er, no. But the Kaiser Family Foundation can.

Ack, sorry, I meant "graphic novel" form. I'm too old for cartoons.

Sure.

Actually, I like reading stuff. So who gets insurance through the program?

Here's the biggest thing to know about Obamacare: Most people will never notice it.

If you get health insurance through your employer or the government -- as 80 percent of Americans do -- it's very unlikely that you'll interact with Obamacare's coverage expansion at all. (There are other provisions in Obamacare, like some of the efforts to improve care quality or cut health-care costs, that could affect you. But that's not the core of the law or the part that's starting Tuesday.)

Obamacare mostly matters most for the 20 percent of Americans who are either uninsured or get insurance on the individual (or "non-group") market. Anyone in those groups can get insurance through Obamacare. Those who make more than the federal poverty line, but less than four times the poverty line ($94,200 for a family of four), can buy subsidized insurance on the marketplaces. Those making less than 133 percent of the poverty line, and living in a state that has accepted the Medicaid expansion, can get Medicaid.

The Congressional Budget Office expects that the Affordable Care Act will cover about 14 million of the uninsured in 2014 and 25 million by the end of the decade. That still leaves about 30 million people uninsured. More on them here.

If I already have health insurance, do I have to care about this?

Probably not. The truth of Obamacare is that it mostly affects the uninsured and people who don’t have employer-based or government-based health insurance. That’s a relatively small fraction of the population, even though we often talk about the law as if it affects everyone.

Are there death panels? 

No.

But I wanted death panels. 

Thanos wants death panels.
Thanos wants death panels.

Sorry.

How much are the premiums?

That will vary depending on the state you’re in, your age, your health, your income, the kind of plan you want, etc. The fastest way to figure out your costs is to go to www.HealthCare.gov.

What does it cover?

All insurance under Obamacare has to cover a set of health benefits the Obama administration has defined as “essential.” They are “ambulatory patient services; emergency services; hospitalization; maternity and newborn care; mental health and substance use disorder services, including behavioral health treatment; prescription drugs; rehabilitative and habilitative services and devices; laboratory services; preventive and wellness services and chronic disease management; and pediatric services, including oral and vision care.”

The bottom line is that if you get sick, the insurance you get through Obamacare is almost certainly going to cover you.

How much will I pay out of pocket?

Depends. Out-of-pockets costs in Medicaid are almost nothing. In the insurance marketplaces, however, there are four levels of insurance coverage: Bronze, silver, gold and platinum. These levels correspond to the amount of health costs they’ll cover for the average applicant: 60 percent for bronze, 70 percent for silver, 80 percent for gold, 90 percent for platinum (there’s also a bare-bones “catastrophic" option available to applicants under age 30). The lower your level of coverage, the more you’ll pay out of pocket.

But the law also has secondary out-of-pocket protections, including limits on out-of-pocket costs for lower-income families. The Kaiser Family Foundation's subsidy calculator will tell you if you qualify.

How many options will I have to choose from?

Since both Medicaid and the insurance marketplaces are different in different states, it depends on where you live. Entering your information at HealthCare.gov will give you the quickest overview.

What if I have a preexisting condition?

Under Obamacare, it doesn’t matter. One of the really big changes that the health law makes to the insurance marketplaces is eliminating the relevance of preexisting conditions altogether. This is true for both plans sold on the new marketplaces, and those sold outside of it. This means that insurers won’t be allowed to ask you about your health, or charge you more because of it.

What if I’m young and really, really healthy?

Congratulations! You’re in the prime of your life – and may have heard that you’re getting ripped off by the health care law. Here’s the deal: The health care law limited the amount that insurers can charge really old people, and that might lead them to bump up the rates for younger people. A lot of this will depend on where you live.

This chart from the Kaiser Family Foundation, which shows the premiums for a 25-year-old who earns $25,000, might help you out:

How much information will I have to share with the government?

You’ll have to tell them some basics: name, age, address, income and the size of your family. You will have to tell whether you use tobacco (the law includes a premium surcharge for smokers). You won’t have to share information about your health status or doctor.

Where do I go to buy it?

www.HealthCare.gov.

But aren't there a bunch of glitches?

Definitely. As much as health wonks were looking forward to October 1st, the conventional wisdom was that relatively few people would actually try and sign up. That was...wrong. The marketplaces have been overwhelmed with traffic, which has meant some error messages and lengthy wait times. There are also some marketplaces, like the one in Washington, D.C., that aren't fully functional yet. But as with any online product launch, the technical kinks are likely to get worked out. So if you want to sign up, give it a shot, and if it doesn't work, try again later.

Who can help me buy health insurance?

If you don’t want to just sign up on your own, there are people who can help guide you through the process. You could go to the insurance brokers who sell health plans right now, typically receiving a commission for their work. The health care law funds some new positions to provide similar help. Dubbed “navigators,” these are people whose whole job is to explain the enrollment process. They do not receive a commission from the health plan for enrolling someone in coverage.

Too much text!

Video interlude! Here's a two-minute Obamacare explainer for those who might need to jet at this point (although you really don't want to miss everything that comes next).

How hard will it be to sign up?


Maygan Rollins, a field organizer with EnrollAmerica, canvasses in Miami. (AP Photo/Lynne Sladky)

That’s a little difficult to predict right now. What we do know is that anyone who wants to buy coverage will have to enter in basic information: Their age, income, state of residence and family size. After that, if all goes as planned, shoppers will be able to compare different health plans.

Federal officials have found that, in the very best case scenario, people will be able to buy coverage in just seven minutes. That’s probably not the typical case, where someone will want to take time going over plan options. And there’s also the possibility of glitches with information processing that could delay the process.

How long do I have to sign up?

Finally, a simple question! You can buy health coverage on the marketplaces from Oct. 1 to March 31. After that open enrollment period, you’re out of luck for buying a plan in 2014. There are exceptions made for people who experience a life-changing circumstance, such as moving to a new state or losing a job.

What if I don’t want to buy insurance? 

First off: Nobody will come knocking down your door, demanding that you purchase a health plan. But if you decide not to purchase coverage, you will have to pay a $95 tax penalty. This would be deducted from your 2015 tax return.

How will the government know if I have health insurance?

You’ll have to tell them, via the taxes that you file for 2014. Starting then, the Internal Revenue Service will send out a form where you’ll fill in the type of health plan you purchased (or, if you didn’t purchase coverage, noting that fact). Employers might hand out pre-populated versions of these forms to make things a little bit easier.

Will the government send gunmen to track me down if I’m not insured?

Creepy Uncle Sam will not come find you if you don't have health insurance (YouTube)
Creepy Uncle Sam will not come find you if you don't have health insurance. (YouTube)

While this is a popular Obamacare myth, it is, in fact, untrue: The federal government is actually really limited in the action it can take to collect the tax penalty for not purchasing health coverage. It can’t send agents to your door, nor can it put a lien on your house. The most they can do is take the fine out of your tax refund – or, if you’re not getting a refund this year, put it on your tab for next year’s refund.

What if I can’t find an affordable plan? Do I still have to buy something?

Nope! Although it’s the government, not you, who gets to decide what counts as “affordable.” The health care law says that if you can’t find a plan that costs less than 8 percent of your income, then you’re exempt from the requirement to purchase health insurance. This will, obviously, depend a lot on an individual’s circumstances and not the sticker price of the plans sold on the new marketplaces.

What if I don’t want to buy insurance yet, but think I might want to buy it later?

Open enrollment lasts until March 31, so you have until then to weigh your options. After that, you can’t buy insurance until next open enrollment period, which starts on Oct. 7, 2014.

What if I get insurance through Obamacare and then I get a job that pays more money?

Well, go out and have a celebratory drink! And then celebrate more by...filling out some paperwork! If your income changes, you’re supposed to go back online and report that shift. Any federal help you get purchasing health insurance coverage will likely be adjusted to reflect your new income. The other option here is not to report your new income, although the government will figure it out when you file taxes the next year – and then look to recoup the tax credits you were not supposed to receive.

Was the individual mandate delayed?

It was not. While the White House did delay the requirement that large employers offer coverage to their workers, it did not touch the provision that says all individuals must carry health insurance coverage. That still takes effect on Jan. 1.

I own a small business. What does this mean for me?

A few things, starting with the new small business health insurance marketplaces. These are new online marketplaces that open Oct. 1, where you could help your workers buy insurance coverage. Initially, the idea for these marketplaces was to have employers chip in a certain amount and then their employees could pick any health insurance plan they wanted; a young worker might want cheaper premiums, whereas someone older could purchase more robust coverage.

The federal government had to delay that functionality for one year, though, because of technical problems. That means, in 2014, you will pick one plan for your workers to enroll in. Some states running their own marketplaces, however, will allow for full employee choice of any plans starting Tuesday.

How are the subsidies paid for? Are my taxes going up? 

There are essentially two big funding streams for the Affordable Care Act. The first are cuts to Medicare reimbursements. We heard a lot about this during the presidential campaign, when Mitt Romney would talk about the law cutting $716 billion from Medicare. These are cuts largely to the rates that we pay doctors who see Medicare patients, and also what we pay private insurers that cover these subscribers.


The other big funding source are taxes on different health care industries like hospitals, insurance companies and, more relevant in recent days, medical device makers. There's a debate about whether those taxes will get passed on to consumers, but, as it stands, they're not direct taxes on you as an individual.

There is one tax that is applied to some individuals, which began last year: The Affordable Care Act raised taxes on investment income for people who earn more than $200,000.

I hear that there are long waiting lists in countries with laws like Obamacare. Am I going to have to wait longer for surgeries?


The United States does right now have some of the shortest wait times in the world to see speciality doctors. We tend to have shorter wait times than a few countries with national health care systems, like Canada and the United Kingdom.

We're expanding our health care system to cover millions more people, making it a little more like a national health care system. When we hand out all those insurance cards, will people still be able to see their doctor?

We don't know for sure what will happen, but we do have a few historical examples to look at, like when Medicare launched in 1965, and the New York Times ran this cartoon to illustrate the looming influx of patients:


The long wait times never really materialized in any serious way. "At the end of its third week," the New York Times reported a few months later, "the Medicare program was reported going smoothly, with difficulties in some areas of the South still the only major problem."

In Massachusetts, wait times to see specialists were bad before the state passed a universal coverage law, and bad afterwards. You can read more on that from Jonathan Cohn.

I'm 25 and uninsured, but my folks have insurance. What does the law do for me?

For you, Obamacare might be the best deal: The health law allows young adults up to age 26 to stay on their parents' health insurance plan. About 3 million people have taken up this option so far. So start bugging your mom to fill out the paperwork.

Where can I go for more information?

After Oct. 1, the best way to learn about what Obamacare does and doesn't mean for you is to go to www.HealthCare.Gov and tool around. Meanwhile, the Kaiser Family Foundation's subsidy calculator is your best bet. For more of an overview of the law, the Kaiser Family Foundation's summary is excellent.

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