There is a lot of confusion surrounding the Affordable Care Act, referred by some as Obamacare. It is a very broad set of laws and regulations which aims to make health insurance available for nearly a third of Americans who are not able to get reliable health insurance. Despite concerns that this is just another tax that people will have to pay, the facts about the healthcare plan tell a very different story.
What it Means to Consumers
In one way or another, the ACA will affect all Americans. This does not mean that all Americans are going to see increased rates or have to pay a new tax, though. What is does mean is that more
care will be available at reasonable costs, actually reducing the burden of essential health services.
- People living at or below 133% of the poverty level will be eligible for Medicaid.
- People earning 134% to 400% of the poverty level will be eligible for subsidies to offset the cost of insurance.
- Only those who do not purchase a health insurance plan will be penalized, and that penalty will be used to provide insurance for them and others.
What it Means to Insurance Companies
A large portion of the ACA involves health insurance companies. The purpose is to increase the availability of insurance and to force insurance companies into being more
competitive and cost-effective. Additionally, these laws prevent insurance companies from simply charging more to make up for the costs of following the policies.
- Insurance companies will be required to spend at least 80% of the premiums they collect on medical care and procedures, whereas before, they could spend your premiums on advertising and
- Insurance companies will not be allowed to deny coverage or drop individuals for preexisting conditions.
- Insurance companies will not be allowed to set annual or lifetime limits on medical procedures.
- Insurance companies will be required to provide free preventive care and screenings.
New Organizations and Innovations
Several new health maintenance organizations will be created, and others will be overhauled. This is meant to provide more complete care where it is needed most, addressing segments of the
population which do not have adequate care or have trouble attracting caregivers. Some of these groups are funded by the federal or state governments, others will be funded through the penalties
and fees collected from consumers who choose not get insurance.
- Incentives to increase medical care in rural areas.
- Treatment programs to reduce return hospitalization for seniors.
- Insurance exchanges will create “one-stop” access to insurance providers and information regarding them.
- The Children’s Health Insurance Program (CHIP) will be expanded.
- The Community First Choice Option is meant to reduce dependence on nursing and convalescent homes by increasing home healthcare options.
- Medicaid and Medicare programs will be overhauled to increase care and reduce costs for those who are not able to pay.
- Healthcare facilities will be required to transition to electronic or digital billing. This is meant to standardize billing processes and save millions of dollars.
The items listed here do not cover all aspects of the new law, but they should serve as an example of the primary goals of the ACA. It should also be noted that the ACA is not an immediate action,
but will become effective gradually. Some portions of the law went into effect in 2010, while others will take place or become mandatory through the year 2020, with a majority of them being
instituted by 2014.