1. I heard that Obamacare starts on Tuesday. What is Obamacare, anyway?
Passed in 2010, Obamacare is a national law with two goals: making health insurance better for people who already have it and getting health insurance for more of the 60 million people who are uninsured. To do this, the law makes a bunch of new rules for private insurers (like Aetna and BlueCross/BlueShield), public insurers (like Medicaid), employers, and everyday citizens. This concept was piloted by Massachusetts in 2006 under then-Gov. Mitt Romney.
Here’s the upshot: About half of all Americans—about 160 million people—already have private health insurance, mostly bought by employers. If this applies to you, Obamacare matters only if your plan was stingy. Under the law, insurers must now pay for many things that used to be optional, like prescription drugs, having a baby, and mental health care, among other services. The law also blocks any extra charges for routine checkups, cancer screening, and some other stuff. Obamacare also limits your yearly out-of-pocket fees, such as co-pays for going to the hospital. It also forbids insurers from kicking you out if you get sick. One other thing: Starting in 2015, workplaces with more than 50 people must provide insurance to full-time workers. Another change: Your paycheck must show how much your boss pays for your health coverage, which may shock you.
Moving on to the roughly one-third of Americans on Medicare (mostly for seniors) and Medicaid (for the poor and disabled): Life won’t change much for seniors on Medicare, other than having an easier time getting prescription drugs. However, Obamacare includes a big expansion of free health care for the poor, through Medicaid. Starting now, nearly all families making less than $31,000 yearly could get free Medicaid, which means 17 million of the 60 million uninsured could be covered.
Everybody else—the remaining 20 percent who don’t have private insurance and don’t qualify for Medicare or Medicaid—has to go buy health insurance from an online government superstore called an exchange. That’s what is opening Oct. 1. You cannot be turned away, and depending on how much money you make, the government kicks in anywhere from nothing to a lot to help you out. Experts think 22 million people of the 60 million uninsured will comply.
In the end, 20 million Americans still won’t have insurance, though.
All this isn’t cheap, so Obamacare cut payments to hospitals and created new taxes for rich people, medical device makers, and health insurers, among many other tweaks to fund the law. According to the Congressional Budget Office, these revenues plus projected savings in Medicare in the next few years should balance out Obamacare’s cost.
The fine print: Obamacare is a gigantic law made of 10 separate titles, with hundreds of other provisions. Less-publicized sections deal with childhood obesity, drug development, special pilot programs, nursing home care, and much more. If you would like to know more, this book by John McDonough will satiate your deepest desires.
2. That answer was too long, so I didn’t read it. Can you just show me some cartoons instead?
The Kaiser Family Foundation, in partnership with Free Range Studios, created this seven- minute cartoon video explaining Obamacare. Narrated by Charlie Gibson, a former anchor of ABC’s Good Morning America, it features the YouToons, who have won rock-star level fame among health policy wonks.
3. Why did we need to change things in the first place? I was perfectly happy with the old system.
You weren’t the only one. According to Gallup, 82 percent of Americans were quite pleased with their health care. The problem really was with the other 18 percent. People routinely got kicked off their plans for getting pregnant, having a pre-existing condition, or losing their job. Afterward, no one would sell them insurance, which pretty much screwed them. Many people also had bad health plans that imposed all kinds of restrictions. In addition, 60 million Americans had no health insurance at all, and as a result, many people lost their homes, endured bankruptcy, and suffered other hardships trying to pay for treatment for their illness. Among industrialized nations, the United States was an outlier in having no basic guarantee of health care.
4. Why are some people so mad about Obamacare?
Obamacare isn’t perfect by any means. But there are two groups that really hate it: those who wanted a single-payer, fully socialized system, and those who claim to be free-market zealots.
Single payer folks think private insurance is wasteful, and they prefer the government to just pay for medical care and eliminate bills, as in England. (Some people called this a “Medicare for All” option.) They dislike investing additional money in a patchwork of private insurers. But such a plan is politically impossible in the foreseeable future.
The angriest people—those looking to provoke a national economic default over Obamacare, comparing the law to the Fugitive Slave Act, or calling it the “the most dangerous piece of legislation ever passed”—are worried Obamacare will cost too much and also harm the quality of doctors’ care. They believe the existing system had problems but worked well enough for most people. Unfortunately, many vocal Obamacare opponents regularly misstate facts. Their vitriol is best understood not as based on rational policy disagreement but as political theater.
Still, it’s true most Americans don’t like being forced to buy insurance, though paradoxically they also hate excluding people who are already sick from buying insurance. Obamacare supporters counter the “mandate” spreads risk more widely and thus allows insurers to stop discriminating based on pre-existing conditions.
5. So the insurance marketplace opens on Tuesday. Got it. What do I need to do?
If you already have health insurance, Medicare, or Medicaid, you don’t need to do anything. If you don’t, go to www.healthcare.gov and follow the directions. You’ll end up getting various choices with prices adjusted for your age and income, typically separated into platinum, gold, silver, and bronze options. If your income falls between 100 and 400 percent of the poverty line (between $23,550 and $94,200 for a family of four), you’ll get a subsidy so your actual cost will be anywhere from 2 to 9.5 percent of your gross pay. This calculator helps estimate your subsidy. One more thing to keep in mind: If you’re up to age 26 and don’t have insurance through an employer, your parents’ insurance can cover you.