Considering its significant impact, the Patient Protection and Affordable Care Act (ACA), commonly referred to as ObamaCare is one of the most high profile pieces of legislation in the last decade. The passage of ObamaCare represents the most significant overhaul of the US healthcare system since the passage of Medicare and Medicaid in 1965. Despite, or perhaps even because of its high profile nature, many Americans are unsure exactly what it entails. Political rhetoric from both sides have clouded objective facts. The following article will provide a brief overview of ObamaCare.
History and Timeline of ObamaCare
The Patient Protection and Affordable Care Act was signed into law by President Barack Obama on March 23, 2010. However, it actually has a much older set of roots. Healthcare reform was one of the major political issues in the 2008 election, especially during the 2008 Democratic presidential primaries. Prior to that there was also considerable discussion of healthcare reform during the Clinton administration in the 1990s, and some aspects of the ACA proposed as early as the 1980s.
ObamaCare was formally signed into law in March of 2010; however, it by no means fully went into effect at that time. It is comprised of many phases which will gradually take effect over the course of many years, culminating in the year 2020. ObamaCare is divided into 10 titles which further consist of different provisions. Each of these provisions may become effective immediately, 90 days after enactment, or six months after enactment. The reason that there is such a long timeline with many different phases is because the logistics of some of the changes are very extensive and involved. It is necessary to provide individuals, companies, and hospitals the time needed to adjust to these changes, as well as allowing the necessary revenue to be raised in order to pay for the system.
Taxes and Funding for ObamaCare
One of the main concerns about ObamaCare has always in regards to how it will be paid for. The majority of the funding will come from taxes, fees, and reductions in spending in other areas. One of the primary sources of revenue will be an increase in the Medicare tax rate for high income earners. In addition to this higher tax rate for people in top income brackets, there will also be an annual fee charged to health insurance providers. Additionally, there will be higher taxes on pharmaceuticals and high-cost diagnostic equipment as well as a federal sales tax for indoor tanning services. There will also be a variety of other revenue sources coming from additional taxes, fees, and alterations to tax deductions.
ObamaCare also has a goal of saving money and improving the quality of life by placing a great focus on preventative care. In turn this preventative care should help reduce costs in certain other major areas. For example there will be reduced funding for Medicare Advantage policies, home health care payments, and Medicare hospital payments. The ten year projection for these spending offsets totals almost $200 billion.
Major Impact and Changes of ObamaCare
Naturally one of the main things that people are curious about when it comes to ObamaCare is just what kind of changes they can expect. We do a separate article highlighting some of these major changes, however, we also wanted to briefly touch on some of the key points in this overview article. As discussed above, one of the focuses of ObamaCare is on preventative care, for this the following benefits must now be included under all insurance plans:
- Annual checkups
- Laboratory services
- Maternity care
- Breast-feeding supplies
- Cancer screenings
- Pediatric Care
- Vision and dental care for children
ObamaCare also has a big focus on insuring more people. Starting in 2014 there will be a tax penalty for people who are not insured. However, there will be subsidies for many low-to-middle income Americans so that they can afford health insurance. Opening on October 1st, 2013, is The ObamaCare Health Insurance Exchange (HIX). The exchange (either State or Federal managed) will become an online marketplace where consumers who are under a certain income bracket can find the best deals on discounted health insurance from private healthcare providers.
Additionally, ObamaCare will make it easier for people to find affordable healthcare regardless of their gender or health status. New provisions will make it illegal for health insurance companies to cancel someone’s health insurance because they become sick. Maximum benefit limits will also be reduced and pre-existing conditions are being phased out for everyone, including those who were previously deemed high risk.
This concludes first part of our ObamaCare article series: the overview. Make sure to check back for future updates as we post articles relating to additional important ObamaCare related topics. Future installments will include a more comprehensive discussion of the major changes, as well as a subsequent article about how these changes will impact the everyday person.