Even though the healthcare exchanges are opening in just over a week, many people still don't know about them, and some people haven't even heard about the Affordable Care Act! Even for those who are more informed, however, things can be confusing. What follows are some questions and answers about how Obamacare works.
Note: these may seem a little bit disjointed; it's a selection of questions from my new book that seemed most relevant to readers of Daily Kos.
How do the subsidies work?
If you qualify for a subsidy and you purchase insurance through the Marketplace, then the federal government pays part of the premium for you (you don’t have to pay up front and wait for a refund). The Kaiser Family Foundation estimates that the tax credit will average $2,700 per family for people who currently buy their own insurance; you can estimate your subsidy using the calculator at http://kff.org/.... However, if you’re reading this after October 1, 2013, you can also just go to healthcare.gov and find out the actual cost. The subsidy is based on the cost of the second-cheapest silver-level plan available to you in the Marketplace, but can be used towards any eligible plan; a bronze plan might be completely covered, while a gold or platinum plan will cost you more. For example, a single 25-year-old nonsmoker can expect to pay approximately $3,030/year for the second cheapest silver plan; if he or she has an income of $20k, the federal government will pay $2,009 towards the plan chosen. If the same 25-year-old had an annual income of $50k, no subsidy would be available and he or she would have to pay the full premium (about $250/month for the silver plan).
When can I sign up for insurance through the Marketplace?
For the first year, open enrollment runs from October 1, 2013 through March 31, 2014. If you sign up and make your first premium payment by December 15th, your coverage will start on January 1st, 2014. For the rest of the open enrollment period, if you enroll by the 15th of the month, your coverage starts the following month, otherwise it starts the month after. In future years, open enrollment will run from October 15 through December 7.
How much will Obamacare add to the debt?
The Congressional Budget Office, which is the nonpartisan government agency responsible for scoring the fiscal impact of bills under consideration by Congress, originally estimated that the law would reduce the deficit by $143 billion over the first ten years, with higher savings in the second decade. Since then, the estimated 10-year savings have grown to over a trillion dollars, and are expected to continue to increase due to exchange rates coming in, on average, 18% lower than expected.
Will healthcare costs keep going up?
Probably. The factors we discussed at the beginning of this book still apply, and while having more people in the system will tend to bring down costs, having so many people who have been without coverage entering the system and needing extra care is likely to drive costs up further in the short run. At the same time, Obamacare seems to have lowered the cost curve for Medicare, which could save a lot of money long-term. Additionally, the American Recovery and Reinvestment Act of 2009 (generally known as the stimulus) contained a section called the HITECH Act, which provided increased Medicare funding for hospitals and providers who make “meaningful use” of electronic health record technology, which tends to lead to more effective care at lower cost. (For details on the HITECH Act, see The New New Deal and Healthcare in the 21st Century, both available on Amazon.)
Did Nancy Pelosi really say “we have to pass it to find out what’s in it”?
Yes, sort of. At the time, there were three competing bills being considered by the committee; Pelosi was trying (and apparently failing) to explain that the House wouldn’t know what they’d be voting on until the committee passed one of the bills.
What if I refuse to purchase health insurance? Will the IRS come after me?
Not really. There are no criminal penalties associated with Obamacare, simply a fee for choosing not to be insured; the fee will be taken out of your tax refund, if any. In 2014, the fee is 1% of your yearly income or $95 per person, whichever is higher, plus $47.50 per uninsured child. The maximum penalty for an uninsured family in 2014 is $285. If you don't have "affordable" insurance available, then you are exempt from the requirement.
What do you mean by “affordable”? I definitely don’t feel like I can afford this!
Coverage offered by your employer is considered to be affordable if the employee share of the premium is no more than 9.5% of annual household income. One of the problems with Obamacare is that affordability is only calculated based on individual coverage; if your employer offers an affordable individual plan and an unaffordable family plan, you won’t be eligible to get a subsidy to buy a family plan on the exchange.
Where should I go for official answers to my questions?
https://www.healthcare.gov/