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What 2014 means for Obamacare

Welcome to Health Reform Watch, Sarah Kliff’s regular look at how the Affordable Care Act is changing the American health-care system — and being changed by it. You can reach Sarah with questions, comments and suggestions here. Check back every Monday, Wednesday and Friday afternoon for the latest edition or sign up here to receive it straight from your inbox. Read previous columns here.

Happy New Year! And, more important for this crowd, welcome to the Obamacare era of health insurance. Whether you love or hate the law, today is indisputably the day the Affordable Care Act fundamentally changes how our insurance markets work. It's hard to capture everything happening today in one column -- we are, after all, talking about the most significant change to our health-care system since, arguably, 1965. But here are a few of the thoughts I'm keeping in mind as I think about what today means.

1. It's hard to overstate how much the health-insurance market changed at midnight: The Affordable Care Act has essentially flipped a multibillion-dollar industry upside down. For decades and decades, the best way to run a health-insurance plan in the individual market was to simply exclude the people who have really expensive health conditions. They got left out of the market, the insurer picked up the cheaper patients, and that was pretty much it.

That was true last night. But it's not true this morning: Beginning today, insurance companies have to take each and every customer who wants to buy their product (provided that the customer is a legal resident of the United States and not incarcerated). And they won't be allowed to charge the people who have really expensive medical conditions a dime more than those who are perfectly healthy. This totally changes the calculus for providers of health plans, who are now going to have to work really hard to get healthy people into their plans -- because they can't do anything about the sick people signing up. The requirement to purchase health insurance should help (a lot, according to some economists), but we won't know until March how many younger (and generally healthy) people decide to sign up.

2. This is great news for people who are very sick -- and a mixed bag for the very healthy people. Sick insurance subscribers mean more claims for health care. And more claims mean higher premiums for everyone jumping into the insurance pool. For someone who is sick, this makes their own costs less expensive -- a great deal for them. Healthy people are helping to foot that bill, meaning they spend more on insurance premiums than they take out in medical claims. In that sense, this is a bad deal for healthy people. But there's also two possible upsides. First, insurance protects against the unexpected -- if a healthy person gets hit by a bus, that person ends up getting more than he or she paid into their insurance plan. Second, healthy people do, at some point, become sick people. A market structure that's a bad deal now becomes a better deal decades down the line.

3. It's impossible to know how many people are gaining insurance today. There is no national clearing house for which Americans get their health insurance where, which makes it all but impossible to know who has insurance on Jan. 1 who didn't on Dec. 1. Here's what we know for sure: At least 6 million people have signed up for Obamacare's coverage expansion, either through private insurance or the public Medicaid program.

We don't know how many of those people had insurance before Jan. 1 and are transitioning into a new, Obamacare-compliant plan. We also don't know how many of the people signed up for coverage have paid their first month's premium -- and they have to do that by Jan. 10 in order to be covered by their new health plan. The Wall Street Journal estimates that about half of those who have picked a private plan have so far made this payment.

4. There are still people who want Obamacare coverage but aren't able to sign up. Up until late afternoon Tuesday, I was still getting e-mails from Obamacare shoppers who were stuck -- and frustrated. certainly works better now than it did in October, but it's by no means perfect. Some people  were still trying to sign up for January coverage on New Year's Eve; others had resigned themselves to starting a plan in February instead.

"There were a lot of miscommunications and technical problems," says Lori Fuchter. We initially spoke on Oct. 1, when Fuchter first tried to buy coverage for her husband on She finally succeeded on Dec. 28 -- four days after the deadline to purchase January coverage. "If we had been able to get in by January 1, we probably would have paid that premium, but now we're going to wait until next month,"  she said.

5. The next Obamacare fight is going to be about access. After three months of enrollment, January will be the first month when shoppers can see what they purchased. We know that the plans for sale on the marketplace tend to have relatively limited networks, as insurers restricted doctor access to hold down premium prices. New subscribers could find that a doctor they want isn't in network, and get frustrated. Co-payments may seem alarmingly high -- a byproduct of keeping premiums low. While the health-care system probably has the capacity to absorb a few million new insurance subscribers (for a variety of reasons explored here) there is still room for issues about access to specific doctors and the price tag that comes along with trips to the doctor's office.

KLIFF NOTES: Top health-policy reads from around the Web.

Medicaid is undergoing a big transformation. "Medicaid embarks on a massive transformation Wednesday — from a safety-net program for the most vulnerable to a broad-based one that finds itself at the front lines of the continuing political and ideological battle over the Affordable Care Act. Already the nation’s largest health-care program, Medicaid is being expanded and reshaped by the law to cover a wider array of people." Sandhya Somashekhar and Karen Tumulty in The Washington Post.

Nuns win temporary relief from the birth control mandate. "Supreme Court Justice Sonia Sotomayor granted a temporary exemption late Tuesday to a small group of Catholic nuns that shields it from having to comply with a part of President Obama's health-care law that requires it to provide contraceptive coverage in its insurance plans. She acted on an emergency appeal from lawyers for the group who said the nuns faced 'draconian fines' beginning on New Year's Day if they failed to comply with the law widely known as Obamacare." David G. Savage and Maeve Reston in the Los Angeles Times.