Healthcare Reform (Obamacare) & You

The PPACA (Patient Protection and Affordable Care Act) which is also known as the health care reform law has caused a great deal of questions, concerns and confusion for Americans since it was put into law in March of 2010. As we get closer and closer to the date where all American individuals, employers and health insurance industry companies are required to adhere to all aspects of the law the question of how it will affect you and your family is of the utmost importance. Because the health care reform law will affect both individuals and group health plans, HealthCentric has put together a simple, but detailed information package that will help you understand the changes and new health care protections you will be seeing in your medical insurance policies.

How Did the PPACA come into Fruition?

When President Barack Obama was elected he selected health care reform as a major priority when he took up residence in the Oval Office. For more than a year the health care reform law went through multiple drafts as law makers battled over the details of the new health insurance and medical care rules and regulations, however on March 23rd 2010 the bill was passed with a majority vote and President Obama signed the Patient Protection and Affordable Care Act into law.

The bill was approved by the U.S. Senate through a procedural rule known as “budget reconciliation” by which the government puts into place legislation that is used to help reconcile the country’s budget deficit over the course of years. The U.S. Senates passed the bill with 219 votes for and 212 votes against the reform law; this votes was viewed as an indication of each political party’s approval of the bill as every single Republication in the Senate voted against the bill and 34 Democrats leaned on the side of the Republicans as well.

Since that day the PPACA has slowly gone into effect as the health care industry, individual Americans, employers and the US government adjusts to government mandated health insurance regulations for every American citizen living in the United States. Though a significant portion of the rules and regulations for the health care reform law have largely been incorporated, the official health insurance mandate does not take effect until the beginning of 2014.

9 Facts about the Health Care Reform Law You Need to Know

  1. Uninsured Americans will now get Health Insurance – Some 33 million Americans who were previously uninsured will now be covered through a collection of private and public health insurance coverage.
    • The PPACA requires that every single individual be covered under one of the many health plans available to them or pay a yearly fine for continuing to be uninsured under the new health care reform law.
    • The new law has elected subsidiaries in place to help individuals and families acquire affordable health insurance in public and private health insurance exchanges.
    • The State-funded Medicaid medical insurance program will be extended throughout the nation to include adult Americans who meet low-income guidelines and who do not have/need medical insurance for children.
    • Health insurance marketplaces have been established to aid eligible uninsured people in their search for health plans such as Medicaid, subsidiaries and other affordable health insurance options.
  2. Preventive Care is Now Available for Free to All Individuals – The health care reform law now requires health insurance companies to offer preventive medical care under all health plans whether the individual or group includes adults, children or seniors. This will include regular medical check-ups, routine physical exams, preventive procedures (vaccinations, dental care, etc) and wellness health care that will aid in lowering the risks of preventable diseases, illnesses and conditions that are caught early. The law stipulates that all insurance plans and government subsidiaries provides these preventive care measures at no cost to the insured individual, however for private medical insurance plans this is expected to increase the insurance premium costs for these coverage benefits.
  3. Health Insurance Companies will Face More Regulations to Improve the Health Care System – One of the significant sticking points for the new health care reform law is requiring more rules and regulations for health insurance provider companies. All companies that offer medical health plans must adhere to an established medical loss ratio (MLR) that requires 80% to 85% of health insurance coverage premiums to be spent on providing medical care for the insured parties. The remaining percentage of the health insurance premiums can be earmarked for administrative costs that the health insurer incurs.
  4. Federal Funding will be Supplied to Help Review Health Insurance Quotes & Rates – Over the course of the next 5 years the health care reform law will supply every state will $250 million funding grants to help review and regulate medical insurance rates. Each state will use these grants to ensure that rates are reasonable and justifiable, and if they are not the state is able to deny the rate. All companies providing health insurance coverage will be required to supply rate increase justifications online for insured individuals to see.
  5. Americans Must Purchase Medical Insurance or Pay a Fine – The reform law mandates that all individuals must be covered under one of the health plans available to them or face a fine for being uninsured. This fine will not take effect until 2014, but once 2014 arrives the fine will be:
    • 2014: $95 or 1% of the individual’s income, whichever is larger.
    • 2015: $325 or 2% of the individual’s income, whichever is larger.
    • 2016: $685 or 2.5% of the individual’s income, whichever is larger.
    • After 2016 the fine for being uninsured will be calculated based upon a cost-of-living rate that will be adjusted each year.
  6. Employers Who Meet Criteria Must Offer Health Insurance or be Fined – The PPACA has regulations placed on employers that must be followed or those employers will face fines for each employee they have.
    • Large Sized Employers – The health care insurance reform stipulates that large businesses that have more than 50 full-time employees must offer health insurance coverage to their employees or face a hefty fine for each of their employer/employee violations. A “full-time” employee is defined as working more than 30 hours a week. For those employers who do not offer medical insurance a $2,000 fine will be incurred for every employee the company has, excluding the first 30 employees. Additionally, employers must offer affordable health insurance options and if the options are not deemed affordable they will incur a $3,000/per employee fine for each employee that purchases health plans through a private health insurance exchange or through a federal subsidiary.
    • Small Sized Employers – For those employers who have fewer than 50 full-time employees they will not be required to offer health insurance to their employees. However, those who do will be offered a tax credit based upon unique parameters if they have no more than 25 employees and pay average annual wages of no more than $50,000.
  7. State-Funded Medicare Program will Not be Affected by Reform – The benefits and overall Medicare program that is administered by the government will not be affected by the health care reform law. However, those seniors who are covered under the Medicare Advantage medical insurance program may incur higher premiums or reduced health insurance benefits.
  8. Higher Medical Insurance Premiums Need to be Expected – Because of the heavy rules and regulations placed on health insurance coverage companies by the reform, experts have said they expect medical insurance premiums to rise at least 1%. The health plans that are offered will offer more benefits, but because of this premiums will be raised. However, all insurance companies will be heavily regulated and must offer affordable health insurance, justifying all of their rate increases.
  9. PPACA will Aid in the Reduction of Health Care Fraud Nationally – In an effort to help bolster the health insurance system, legislation has been put into effect to stop and decrease the risks of medical insurance fraud for both insurance offered by private health insurance marketplaces and by government funded subsidiaries such as Medicare & Medicaid. The new measures are expected to save around $100 billion a year by decreasing the associated criminal activities that cause health care costs to rise. In the next few years it is expected that more health care fraud legislation will be introduced to help lower the risks and costs of fraud even more.