With the US government recently shutting down over disagreements on Obamacare, the entire world has turned its attention to the issue of health-care reform in the US. However, regardless of the political controversy that has resulted, many people in other parts of the world are not entirely aware of what Obamacare actually is in the first place or what it means for the American people. Without delving into the politics of the situation, here is a quick all-you-need-to-know guide for Obamacare.
What is Obamacare?
Obamacare, or the 'Patient Protection and Affordable Care Act', is a reform of the US health insurance industry and the health care system under the Obama Administration with the primary goal of making affordable health-care available to every US citizen. Its many provisions are taking effect gradually from 2010 till a proposed end date of 2020. All Americans who can afford insurance will be required to be covered by January 1, 2014 or pay a fine.
In the US, most people are covered under an employer's health insurance plan. "Medicare" provides health insurance for seniors and youth with disabilities, and "Medicaid" provides health insurance for low-income families and individuals. However, there are still about 32 million citizens who don't have health insurance.
When these citizens require care at a hospital, many are not able to afford their treatment, and the hospital will pay instead, thus raising prices for medical care for everyone. Obamacare aims to lower not only the number of uncovered citizens but premiums as well.
What has changed?
Here are some of the changes that have already taken effect because of Obamacare:
- Insurance companies can no longer deny sick individuals or chronically ill children coverage
- Youth until the age of 26 are covered under their parents' health insurance
- Pregnancy exams are mostly free
- Insurers can no longer raise premiums without state approval
- Individuals who have been denied coverage from a private insurer because of a pre-existing condition can apply for temporary cover from the government.
- Children under the age of 19 no longer receive different premiums for pre-existing conditions.
- Rebates through Medicare have been increased
- Medicare has been extended to smaller hospitals
- A profit limit has been placed on insurers to combat price-gouging.
- Health plans must provide preventative care (colonoscopies, mammograms) without extra charge
- An Online Health Insurance Marketplace has been established for buying regulated private health insurance
- Chain restaurants (such as McDonalds) must display calorie information on menus
Changes yet to come
The following is list of changes that are scheduled to happen in the future:
January 1st, 2014
- Pre-existing conditions will no longer affect an individual's policy or premium. Medical history will no longer be an issue.
- Businesses with 25 employees or less will receive tax credits for two years
- Businesses with 50 or more employees will be required to provide health insurance to all full-time employees. Businesses who do not will pay a penalty.
- No more caps on annual spending for medical care.
- Annual deductibles will be limited.
- Congressional staff will be offered the same options as regular citizens. No more preferential treatment and abuse of tax dollars.
- A tax will placed on pharmaceuticals, medical devices, and insurance companies based on market share.
- A doctor's pay will be based on their quality of care, not the number of patients they treat.
- States will be allowed to propose their own plans as long as they provide the same care at the same price as the PPACA.
- All medical care plans (not only new plans) will be required to cover preventative care.
- A tax will be placed on premium health care plans.
- The Medicare Part D coverage gap ("The Medicare donut hole") will be eliminated.
How have premiums been affected?
The main idea behind Obamacare is that everyone, both the wealthy and the poor, should have access to health-care. However, to pay for the insurance that is becoming available to poorer individuals and families, the young, the healthy, and especially the wealthy are seeing higher premiums and higher taxes.
According to a recent Forbes study, rates for men have increased by an average of 97-99%, and rates for women have increased by an average of 55-62%.
Rates are increasing differently depending on the state. The state of Colorado has seen the best changes, with an average 36% decrease in premiums for 27-year-old men and women. On the other end of the spectrum is Nebraska with the difference between the cheapest plan in the pre-obamacare system and post-obamacare reaching 279% for men and 227% for women.
With these drastic premium increases, it quickly becomes clear why so many Americans are vehemently against the Affordable Care Act. The Obama Administration, however, still maintains that premiums will decrease in the future. Pacific Prime analysts will continue to track the situation in the US, eagerly waiting to see whether or not that future ever comes to pass.