Obamacare (Affordable Care Act)
Obamacare, or the Affordable Care Act, is reshaping the health insurance marketplace and it comes with rewards and challenges for consumers. Some of the key health insurance changes enacted by the law include:
- A requirement for insurers to provide insurance coverage to virtually everyone (often called “guaranteed issue”) regardless of health status or pre-existing conditions
- Penalties for individuals without health insurance and for many employers that do not provide health coverage
- Subsidies for qualifying individuals and tax credits to qualifying small businesses
- State and federal exchanges for the purpose of selling health plans
Most consumers are confused about Obamacare. This guide will help you quickly answer the following questions:
What are the new Obamacare plans and how are they different than existing insurance plans?
There are four basic Obamacare health insurance plan categories: Bronze Plan, Silver Plan, Gold Plan, and the Platinum Plan. Plans in each category require you to pay a different level of out-of-pocket costs. The Bronze plan, which typically has the lowest premium, charges you the highest out-of-pocket costs for medical services. On average, you will pay 40 cents out-of-pocket for every dollar healthcare services cost. With platinum plans, on other hand, you will pay 10 cents out-of-pocket for every dollar healthcare services cost. The premiums for a Platinum plan are generally the most expensive.
In many cases, the higher the level of plan, the wider your provider network will be. While a Bronze plan may limit you to a very narrow network of doctors and hospitals, a Platinum plan may include more providers and specialists. This is not always the case, however, and you should always check that your preferred doctor accepts the plan you are considering.
Our health plan comparison tool enables you to evaluate not only the premiums and benefits of these plans against one another but also their quality. Every one of these plans must cover the same essential health benefits.
Briefly stated, these benefits are: physician care, emergency services, hospitalization, lab tests, prescription drug coverage, maternity and newborn care, pediatric care, and mental health services. Many health insurance plans in the pre-reform market did not include all of these benefits. However, the essential benefits are now mandatory and Obamacare health plans cannot be sold to consumers without these benefits.
Will I have to change my health insurance even if I like my current plan?
The Affordable Care Act has strict requirements on what qualifies as an Obamacare plan, including the maximum out-of-pocket limits and the minimum essential health benefits a plan must include. Most insurance plans in the pre-reform market do not meet these requirements. However, if you have had your health insurance plan since March 23, 2010, then your plan may receive a special status as a "grandfathered plan" that allows it to remain in force. “Grandfathered” is not a permanent status and a health plan may lose this status due to a variety of factors.
Where can I buy health insurance?
Health insurance can be purchased from an insurance company, a health insurance exchange, or an insurance broker. Our website allows you to compare plans first, including quality scores, before you commit to purchasing a plan. With HealthPocket’s health plan comparison tool you can calculate premium subsidies for Obamacare metal plans. When you decide which plan is the best combination of cost, benefits, and quality, HealthPocket will display multiple options where you can purchase the plan that you want. In some cases, you may be eligible for a subsidy on your monthly premium.
How much will my monthly premium be?
Some of the key factors that will influence your premiums are where you live, the type of health insurance plan you chose and whether you qualify for public assistance, a health insurance subsidy, or Medicaid.
A recent study found that for 2016, the average Obamacare Bronze plan premium for a 30 year old was $257.68 a month. For a 40 year old, it was $289.98 and for a 50 year old, it was $405.28.
However, since premiums can vary significantly, comparison shopping can potentially reduce costs by thousands per year. Plan quality should also be evaluated and treated equally as importantly as the monthly premium. Similar premiums do not imply similar quality among health plans. There are some very expensive health plans that have poor quality and some very affordable health plans with quality scores better than more expensive competitors. HealthPocket’s health plan comparison tool allows you to review our quality ratings of plans alongside their premiums and benefits.
When can I buy health insurance?
People were able to enroll in a new Obamacare plan starting October 1, 2013. The open enrollment period for 2016 is now closed. The next open enrollment period, which will be for insurance coverage beginning in January 2017, is scheduled to begin October 1, 2016 and end December 15, 2016. Individuals can also qualify for special enrollment periods outside of the open enrollment period if they experience certain qualifying events.
What health insurance plan should I choose?
Short answer: You should choose the plan that’s best for you. In practical terms, this means that you need to evaluate the plans available in your area on three main categories:
- Price (monthly premium, deductibles, copayments, and the highest out-of-pocket expense limit for each year)
- Benefits (the coverage and services you receive through the plan and how they align to your medication usage as well as any chronic conditions you have)
- Quality (how well the plan performs on issues such as customer service, preventative care, managing a chronic condition, etc.)
HealthPocket simplifies the above process through its health plan comparisons. Price, benefits, and quality can all be evaluated at the same time.
Can I keep my current doctor?
It depends on whether your doctor accepts your new insurance coverage. Most plans have a network of doctors, hospitals, pharmacies, and other healthcare providers that will accept reimbursement from the plan. HealthPocket allows you to see if your doctor is part of a plan’s network. To use this feature, compare plans and then click on the Plan Details link for the plan that interests you. The Plan Details page will include a section called “Physician Directory.” Since there is a movement in the industry toward “narrow networks” (i.e. a smaller number of providers authorized to accept a health plan’s insurance), it is essential for you to validate your doctor’s participation in an insurance plan’s provider network unless you are willing to change doctors.
Do I qualify for any assistance or subsidy?
This will depend on you and your family’s income and its relationship to the Federal Poverty Level (FPL). Obamacare makes millions of lower income Americans eligible for premium subsidies. These subsidies come in the form of a tax credit, that is paid directly to your health insurance carrier each month to offset the premium. Below is a table summarizing the premium subsidies.
|Modified Annual Adjusted Gross Income (MAGI)||Premium After Government Subsidy|
|Up to 133% FPL||2% of income|
|133% to 150% FPL||Sliding scale of payments starting at 3% of income and ending at 4% of income|
|150% FPL to 200% FPL||Sliding scale of payments starting at 4% of income and ending at 6.3% of income|
|200% FPL to 250% FPL||Sliding scale of payments starting at 6.33% of income and ending at 8.05% of income|
|250% FPL to 300% FPL||Sliding scale of payments starting at 8.05% of income and ending at 9.5% of income|
|300% FPL to 400% FPL||9.5% of income|
|Above 400% FPL||No government subsidy|
These subsidies are based on the premium for your state health exchange’s selection of a representative Silver plan. What does this mean? In each state, there is a Silver Plan that the state exchange designates as the benchmark for Silver Plan premiums. Let’s imagine that in your state, the yearly premium cost of that Silver plan is $10,000. If your subsidy caps your premiums at $2,500 a year based on your relationship to the FPL, your subsidy would be a tax credit of $7,500 ($10,000 minus $2,500). What if you don’t choose a Silver Plan? It doesn’t matter. Your subsidy is based on the premiums of a benchmark Silver plan even if you pay less for a Bronze Plan or more for a Gold or Platinum Plan.
Do I have to buy health insurance if I don’t have it already?
Yes. If you don’t buy health insurance, you will face a penalty. If you are an individual under the age of 30 and find it financially difficult to pay for a Bronze plan, you may qualify to enroll in a Catastrophic Plan.