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Women win some, lose some under Obamacare

Before going into what’s good and bad for women from the Affordable Care Act — a.k.a. Obamacare –let’s discuss the basics.

First, apart from a few exceptions, everyone’s supposed to buy health insurance by the end of March 2014. Those who aren’t insured by then have to pay a penalty.

This requirement to buy insurance is what’s known as the “individual mandate” and is what’s essential for Obamacare to work. The idea of the mandate is to make healthy uninsured people buy insurance so that their premium payments can offset the additional costs that will be incurred by the unhealthy people who will now have coverage through the ACA.

Second, people who already have insurance, whether through their employer, through a plan they bought on their own, or through the government, don’t have to sign up because they’re already insured. The ACA is targeted at the roughly 50 million Americans who are uninsured.

A lot of women — about 21 million according to estimates from a report on “The State of Women in America” from the Center for American Progress — don’t have insurance.

So, exactly how do women benefit from Obamacare?

First, the Affordable Care Act eliminates the discrimination that women have faced when buying insurance. For years, insurance companies may have charged women up to ten times more for their insurance than they charged men. Women often were denied coverage because of a “pre-existing” condition. As Senator Barbara Mikulski, Democrat of Maryland, recently said, “Maternity was considered a pre-existing condition. In some instances, if you’d had a premature birth or a C-section, you were denied coverage, because it was a pre-existing condition. In eight states, if you were a victim of domestic violence, that was counted as a pre-existing condition and you couldn’t get access to healthcare.”

Under Obamacare, insurance companies can no longer use gender as a factor when setting premiums.

Mothers will like the fact that maternity, newborn care, and pediatric services, including oral and vision care, are among the ten essential health benefits that insurance providers must offer. The ACA also requires insurance providers to allow parents to keep their dependent children on their plan until the child is 26-years-old.

Many women will benefit from the tax subsidies and cost restrictions under Obamacare. The exact benefit depends on things like a woman’s income, family composition, and where she lives. The ACA limits the out-of-pocket costs a policyholder must pay and includes all cost-sharing payments towards that maximum and prohibits companies from requiring co-payments for wellness treatments. Under current practices, insurance companies can decide that certain health payments don’t count toward the maximum out-of-pocket expenses.

For lower-income women, the ACA has a provision known as “expanded Medicaid” that may make them eligible for Medicaid benefits. According to the Health Policy Center at the Urban Institute, some 4.6 million women of reproductive age are among the 15 million poor uninsured adults who would gain coverage under the expanded Medicaid provision. (Not all states have adopted the expanded Medicaid provisions.)

The ACA reduces some of the costs that women insured through Medicare now incur. Even with Medicare, women spend about $4,844 on premiums and out-of-pocket expenses each year, according to the Kaiser Family Foundation. Part of this expense goes toward prescription drugs, where elderly women spend an average of $338 each year. The ACA phases out the so-called “doughnut hole,” or coverage gap, in the prescription drug program, eliminates cost-sharing for some preventative services, and allows Medicare beneficiaries to get more preventative care services, such as a free wellness visit each year.

Finally, Obamacare provides refundable subsidies for people to purchase insurance. The idea is to encourage low income people to purchase insurance through the state-based Health Insurance Exchanges. People whose income is between one and four times the poverty level may qualify for a subsidy.

The Kaiser Family Foundation estimated the potential premiums and credits for families who are now buying insurance in the individual market and who will switch to the health insurance exchanges. It found that the average family would receive a $2,672 premium subsidy that would reduce its payment by about one-third.

Those programs identify a lot of things to like about the health care overhaul. Now, it’s time to identify the drawbacks. None of these drawbacks applies specifically to women.

The government recently released its estimates of premiums under the ACA for the 36 states where the federal government will operate the Health Insurance Exchanges, or Marketplace. It found that premiums would be lower than initial estimates for Obamacare. By contrast, in a separate study, the Manhattan Institute estimated that women would pay from 55 to 62 percent more for insurance under Obamacare than they pay now.

Although the idea is that everyone will have insurance, the ACA doesn’t actually require people to buy insurance. It provides an incentive to do so, however, by penalizing people who decide not to buy insurance. In 2014, adults without insurance will pay the maximum of $95 a person or 1 percent of income; kids are subject to half the adult penalty. (The Congressional Budget Office predicts that 31 million people will be uninsured and pay $6 billion in penalties in 2023.) Penalties rise over time, but they’re limited to the cost of an insurance policy from the health insurance exchange. (The IRS will collect the penalties through the individuals’ federal income tax return by either reducing the amount of refund due or increasing the amount of tax owed.)

Whether a woman will be able to continue to see her own doctor or go to the same hospital is an issue many will face. States that have set up their own health exchange systems generally provide a range of insurance providers and plans but, to keep costs low, may exclude some doctors and hospitals.

For example, a study conducted by the Health Research Institute of PricewaterhouseCoopers found that many insurance companies were excluding certain doctors and medical centers from their plans to reduce their premiums. According to a report in the New York Times, California’s Blue Shield plan, for example, excludes the University of California’s medical centers and the Cedars-Sinai Medical Center near Beverly Hills. Patients can still see their preferred doctor or use a preferred facility, but they must pay those expenses on their own.

Employers are changing to their insurance coverage. Trader Joe’s, for example, is cancelling its plan for part-time workers and giving them $500 to buy insurance from the health exchanges.

Because the ACA requires that employers with at least 50 full-time employees provide insurance for those working at least 30 hours a week, employers may cut the number of employees or reduce the hours of their part-time workers so they don’t have to provide health insurance for them. Since women who are over 20-years-old make up 57 percent of part-time workers, a further reduction in part-time hours will disproportionately hurt them.

Some taxes have gone up to pay for the ACA.  High-income taxpayers pay a slightly higher payroll tax to help cover the costs of health reform. Some medical devices are subject to an excise tax. Starting in 2018, high-cost plans may be subject to the so-called “Cadillac tax” if benefits exceed a certain amount.

Working women who are insured through their husband’s employer-based policy may also lose due to changes that employers are making to their coverage. The United Parcel Service, for example, has said it will save $60 million a year by dropping coverage for 15,000 working spouses who can get insurance elsewhere, according to a report by Kaiser Health News. The company said that the additional costs from the ACA, such as the research fee and a fee that goes toward supporting the exchanges, were a factor in this decision. The ACA requires large employers to cover employees and dependent children, but not spouses or domestic partners.

Finally, the ACA costs a lot. In May, the Congressional Budget Office estimated that providing coverage will cost $250 billion in 2023 and a combined $1.798 trillion from 2014 through 2023. Exchange subsidies and related spending make up $1.075 trillion of the total outlays.These costs will be offset by $435 billion in revenues over the decade, making the net cost for providing insurance through the ACA $1.363 trillion over ten years.

On balance, women are likely to be better off due to the benefits from Obamacare, but those benefits aren’t evenly distributed and some women may find themselves worse off under the new health law.