In less than one week some of the 45 million Americans without healthcare will be able to sign up to finally get it as the next stage of the Affordable Care Act, euphemistically called Obamacare, rolls out on October 1. That is the date when states will start enrolling some of the 21.5 million adults under the age of 65 who will now qualify for a benefit currently available to 60 million poor children, the disabled, and some of the elderly. Each state determines the criteria and how it will allow more people get Medicaid.

Here are some things you need to know about the Affordable Care Act:

Everyone has to get insurance by 2015 or face a penalty

To pay for this expansion in coverage under the law passed during Obama’s first term in 2010, the government requires that all Americans get health insurance by 2015. Those who do not will be assessed a penalty when they file their annual tax returns.

Mandatory insurance encourages people to take responsibility for their healthcare in advance

Obamacare is about encouraging people to be responsible for their own healthcare in advance rather than forcing the government to shoulder the burden should the need arise unexpectedly. The mandatory insurance is meant to save the government money it now spends on the uninsured when they have to go to the emergency room for care. Currently, US law prohibits hospitals from not providing emergency care to anyone who comes to them. But when hospitals are unable to collect on hospital stays from people who are uninsured, they eventually apply to the government for a reimbursement from the Medicaid fund.

To make the healthcare act work, the federal government has a challenge to get 7 million enrolled the first year. Through a vigorous public awareness campaign, the Feds will have to convince 2.5 million healthy young people who make up a third of the uninsured to sign up for healthcare.  And although 73% of those surveyed who are 30 and under believe getting health insurance is the responsible thing to do, not all will sacrifice their weekend beer habit to pay for monthly premiums.

But there’s a learning curve challenge…

The challenge is that many Americans still have no clue that Obamacare is the law of the land. A Kaiser family poll released in April showed that 40% of those surveyed didn’t know it was in effect and 7% thought the US Supreme Court had overruled it rather than, upholding the law. A third of them are concentrated in the heavily populated large states of Texas, California and Florida.

A Gallup poll this summer revealed that 53% of Americans  didn’t know they faced a penalty if they didn’t get insurance by 2015. A forthcoming article to be published in the Journal of Health Economics finds that most Americans don’t even understand basic terms associated with healthcare. Only 14% of respondents knew the most basic terms, “deductible, copay, co-insurance and out-of-pocket maximum.”

But the law has already taken effect and benefitted some groups:

  • Young people: An estimated 7 million young people between the ages of 18- 26 have been able sign up or stay on their parents’ plans to get healthcare.
  • Families preventive screenings: Many families and individuals may or may not realize that they no longer have to pay for certain sick visits or screenings because of the law. It required insurance companies to eat the co-pay costs of Mammograms, well-women visits, gestational diabetes for pregnant women, cancer, domestic violence screenings and breastfeeding supplies.
  • Insurance policy holders: Also, this summer, 12.1 million individuals and businesses got $1.1 billion in rebate checks from their insurance companies. The rebates came from insurance companies that made their insured persons pay for overhead such as CEO bonuses, administrative costs and other charges that had nothing to do with providing healthcare.
  • Seniors: It also eliminated a coverage gap where seniors’ prescription costs skyrocketed for a brief time. Under the law, seniors subject to the lapse were spared from having to fork up thousands for their prescriptions.
  • Those with pre-existing conditions: Insurance companies were prohibited from banning people with pre-existing conditions from coverage.

Getting states on board is challenging too

In less than a week, some states will start enrolling newly qualified adults into their Medicaid plans and make available healthcare plans from across the nation under state exchanges. The federal government is under the gun given that 26 states have opted out of creating their own exchange programs leaving it up to the feds to set up.  Nevertheless, when Medicaid was first created in 1965, most states didn’t offer it either but over the following few years, almost all got on board when their state residents pressured them into it.

Those who buy private insurance can shop for better options

The 16 million Americans who currently buy independent healthcare–not through an employer–will get more options, including those available in plans in other states through exchanges. Through these exchanges programs set up on state websites, insurers who participate will present their plans, coverage, copay, and deductibles in the pot among other insurance plans.

The Congressional Budget Office estimates 24 million to sign up through 2016.

Insurance companies, not tax payers, fund exchanges

Kaiser Family estimates that the exchanges will cost states between $25 to $65 million  to run, but most hope to offset those costs via the fees they charge insurance companies to enroll. Insurance companies are willingly signing up on state exchanges. Because Obamacare requires everyone to get health insurance; they are essentially guaranteed a wider market of potential new customers.

Families and Individuals Eligible for Insurance Premium Subsidy

Approximately 26 million Americans who are already insured may be eligible to receive government subsidies for those up to 400% of the poverty line of $45,000 for an individual or $92,000 for a family of four. Those who are already insured and perhaps pay out-of-pocket or through an employer plan could be eligible to receive a subsidy in the cost of their current premium via a government tax credit.

Test State Case: Maryland

Maryland is one of 17 states nationwide that has agreed to set up an exchange and it is among a few of them that has already set up a website, assembled insurers, and is nearly ready to begin enrolling new Medicaid cases on October 1 through its web portal.

On January 1, 2014, already insured residents and those who don’t qualify for Medicaid can get access to the part of the website that will empower them to compare all the various available plans, and pick the one that best meets their needs.

The intent is for competition to encourage premiums across the board to drop. The essence of a free market economy is the availability of options will require competitors to create better products, and make services competitive.

One application

Using one application, they can apply for the subsidy, pick a plan and find out if a family member may qualify for Medicaid or the state’s Maryland Children’s Health Program (MCHP). Its website also offers a calculator to help small businesses determine if they will be eligible for a tax credit for their portion of employee health insurance they currently pay. Even though only employers with 50 or more employees will be required to provide health insurance, those who have less than 25 may also be eligible for a tax credit. Maryland is a state to watch to determine how many enroll and how implementation of this stage is working out.

If you already have insurance, beginning in 2014, they will have to cover:

Emergency services
• Hospitalizations
• Laboratory services
• Maternity care
• Mental health and substance abuse treatment
• Outpatient, or ambulatory care
• Pediatric care
• Prescription drugs
• Preventive care
• Rehabilitative and habilitative (helping maintain daily functioning) services
• Vision and dental care for children

At this point, whether one has insurance or not, all will have to start doing some basic research on the available options and prepare to apportion their budgets accordingly to absorb a penalty or to pay for a reasonable plan that meets their needs. Those with insurance should prepare to apply for tax credits or be on the lookout for benefits. They should also monitor their bills and premiums to make sure they’re not being charged for items that the law says should not be.

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