The Whos, Whats, Wheres, Whens, Whys, and Hows of Obamacare
by Samantha Greenbaum
As Congress reconvenes for its fall 2013 legislative calendar, a budget showdown is looming. This battle is pitting Speaker of the House John Boehner of Ohio against ultra-conservative members of his own party, the Tea Party Republicans, who want to defund the Patient Protection and Affordable Care Act known as Obamacare. If successful, much of the bureaucratic functions needed to implement an important first deadline will not be available to help individuals with the purchase of health insurance.
What is Obamacare?
The Patient Protection and Affordable Care Act of 2010 was a signature piece of legislation during President Barack Obama’s first term. The law was designed to address the needs of more than 49 million Americans, who were without health care coverage. The law requires all eligible persons, individually or through their employer, to purchase health insurance beginning October 1, 2013. This is known as the individual mandate. Businesses of a certain size and number of employees are required to begin purchasing employer plans to cover their employees beginning January 1, 2014 under the employer mandate.
The law was challenged in court by several states and groups, culminating in a ruling by the U.S. Supreme Court in June 2012 that upheld the individual mandate and kept the law mostly intact. The law seeks to bridge the gap between those with health insurance and those without by bringing the number of uninsured down.
The Individual Mandate to Purchase Health Insurance
The most controversial aspect of the law has to do with the individual mandate. All citizens living in the United States are required to have health insurance coverage in place under the law by January 1, 2014. Failure to do so will result in a penalty, ranging from the greater of $95 or 1 percent of the individual’s income subject to taxes. Individuals living in states that plan to opt out of Medicaid expansion will still be required to have health insurance. A Federally run health exchange will take the place of state-run programs for residents of states opting out of Obamacare.
Opponents of Obamacare
Part of the law asks states to create health exchanges to facilitate the purchase of health insurance for low income residents through an expansion of Medicaid. To date, 21 states, primarily those in the southern United States and/or with Republican controlled legislatures have opted out of creating such exchanges and accepting additional Federal dollars to expand Medicaid.
Additionally, opponents of the law argue that the law will do little to move the largest segment of uninsured, those considered to be young and healthy, to take action and purchase health insurance. Although the law has allowed adults to stay on a parent’s health insurance plan until age 26, this segment (47.8 percent of uninsured) may still need additional incentives to participate. Encouraging more young people to purchase health insurance will counter conservative claims that Obamacare will increase the cost of coverage for everyone. This is because insurance pricing is based on what is known as risk pooling. The healthier and younger the individuals are in the pool, the lower the risk and cost to the insurer, which results in lower health insurance costs for everyone.
The truth about costs and effects of Obamacare will come into light once the January 1, 2014 effective arrives and individuals begin to participate fully in the program. The political and ideological discussions about the law obscure the intent of the law and often misrepresent the cyclical nature of health insurance pricing and costs and serves little as a solution to the country’s health care crisis.
About the Author
Samantha Greenbaum is a health-conscious mother of two. If you’re looking for a way into the health industry as a professional, Samantha suggests checking out Medical Billing and Coding Connection.