ObamaCare (the very major overhaul to the US healthcare system) has generated a great deal of publicity in the health insurance insurance sector. Even those Americans who do not closely follow politics or take an active interest in insurance and healthcare have most likely heard about ObamaCare. Many wonder exactly what all the changes of ObamaCare will entail. Nevertheless, we wanted to take a moment to inform Beaty Insurance’s customers and readers about the most major and important changes created by ObamaCare.
No More Pre-Existing Conditions
One of the most revolutionary changes in the system is the dissolution of pre-existing condition. The term “pre-existing conditions” refers to a health condition or illness that someone had prior to becoming insured by their current healthcare provider. It has long been a common practice in the health insurance industry for insurance companies to exclude coverage for pre-existing conditions or to charge higher premium for higher risk individuals. According to some estimates about one in two Americans have some type of pre-existing condition.
Starting in 2014 ObamaCare will begin to phase out pre-existing condition, making it illegal for health insurance companies to exclude coverage or raise rates due to them. By 2017 there will be no more pre-existing conditions for anyone, even high risk individuals.
Additional Benefits and Protections
ObamaCare also has a focus on expanding health insurance benefits and providing greater protections to the insured. Some of these protections include:
- No more lifetime limits or maximums on benefits
- No more annual limits on benefits
- Protection from insurance companies cancelling policies when an individual gets sick
- A faster appeals process for claims
- Young adults can remain on parents’ health insurance plan until age 26 regardless of whether or not they live at home, attend school, or are married.
In addition to these increased protections, ObamaCare also has a goal of expanding benefits and ensuring that people get better coverage. Some of the expanded benefits and requirements for all health insurance plans under ObamaCare include:
- Rehabilitative services and devices
- Maternity and newborn care
- Laboratory services
- Emergency services
- Coverage for mental health disorder
- Coverage for substance abuse
- Pediatric services
- Preventative care services
- Annual check ups
- Cancer screening
Additionally, ObamaCare will seek to encourage more primary care physicians. This will be done by offering funding and other incentives. ObamaCare will also provide more resources to community health centers.
Steps To Make Healthcare More Affordable
ObamaCare’s formal name is The Patient Protection and Affordable Care Act and it is also often simply referred to as the Affordable Care Act (ACA). Hence, another major objective for the plan is to make healthcare itself more affordable. One of the most significant ways in which ObamaCare seeks to do that is by setting up Health Insurance Exchange (HIX).
The Health Insurance Exchanges opens October 1st, 2013 and will consist of either state or federal run (depends on the particular state and whether or not it has opted to run its own) online-marketplaces where consumers can go to get the best deals on their health insurance. There will be four plan types: bronze, silver, gold, and platinum. By law, the bronze and silver plan types may cost no more than 9.5% of an individual’s annual income if that person makes less than 300-400% of the Federal Line of Poverty (FLP). The gold and platinum plan types may cost no more than 12% of the person’s income.
Additionally, as discussed above, ObamaCare will also make it illegal for insurance companies to charge higher rates due to pre-existing conditions and health risks. ObamaCare also makes it illegal for insurance companies to charge a person more based on gender. Finally, ObamaCare’s focus on preventative care and other reform steps seek to reduce cost by saving money and cutting spending.
Tax Penalty For Not Having Insurance
Another step that ObamaCare takes toward saving money for the nation’s healthcare, is to strongly encourage everyone to have health insurance. In the past people who needed emergency services, but did not have health insurance would often end up unable to pay, leaving the government in the position of having to pick up a lot of the slack, and also resulting in the health insurance companies raising the rates for everyone to offset that cost. By raising the number of people who have healthcare to begin with, much of this cost is able to be avoided.
In addition to making healthcare more affordable to begin with using programs such as the Health Insurance Exchanges and altering many of the health insurance laws, ObamaCare also seeks to increase the rate of individual coverage by charging tax penalties for people who do not have health insurance. Starting in 2014 the tax penalty for people who do not have health insurance will be $95 a year, or up to 1% of the person’s income, whichever is greater. By 2016 that amount will rise to $695, or 2.5% of the person’s income, again whichever is greater.
The Employer Mandate
Another big step toward ensuring higher rates of coverage is the Employer Mandate. Originally the Employer Mandate was set to begin in 2014, but it has been delayed until 2015 instead. The Employer Mandate will require that all companies who have at least 50 or more full-time employees must pay toward their health insurance otherwise they will be be charged tax penalties which will go toward paying for the tax credits available on the Health Insurance Exchanges.
Furthermore, companies must contribute at least 50% of the employee’s premium cost in order to be eligible for tax credits. Once again the employee’s share of the cost cannot exceed 9.5% of their annual income if they are under the 300-400% of the FLP.
Medicaid and Medicare Reform
One more big change that we want to highlight in this article is the Medicaid and Medicare reform being done under ObamaCare. These programs and the perceived problems that they have, have long been very contentious topics with many politicians and citizens calling for reform. As part of that reform ObamaCare will expand the coverage that Medicaid provides to roughly an additional 17 million uninsured Americans. ObamaCare will overhaul Medicare to provide new benefits, expand coverage, cut costs, and fight fraud. All of these changes are aimed at improving the overall level of care for patients.
The change discussed here are only a small sampling of some of the biggest, most major changes that ObamaCare creates. If you have specific concerns relating to your situation then it is important to do your research or to talk to your health insurance agent. Here at Beaty Insurance we are always happy to help our customers in anyway, so that each receive the absolute best, most affordable coverage possible.