What’s the deal with Obamacare, and how does it affect me?
What’s changed under the Patient Protection and Affordable Care Act (PPACA), popularly known as Obamacare? You can get all the details on the official website – which sets a new bar for user friendliness. Or scan the highlights below.
No annual or lifetime limits
If you or your family member experience a catastrophic medical event or condition, you’re not threatened by annual or lifetime limits on benefits extended. Before PPACA, under many policies there was a limit to benefits paid out (say $1m/yr, or $2m/lifetime). While these sound high, the realities of the costs of a bad car accident or a bout with cancer could easily exceed these limits, often leaving patients with unmanageable bills. The problem was further compounded if the condition caused the person to loose their job, which meant they’d loose their employer sponsored health insurance and would be left with a pre-existing condition making a new policy unaffordable or just plan unavailable. This is one of the least talked about, but potentially the furthest reaching benefits of PPACA, since it reduces the risk for many of us that one catastrophic event could wipe us out financially and leave us bankrupt and without ongoing healthcare coverage.
No consideration of pre-existing conditions
Prior to PPACA, any application for private insurance included information on past medical history. If an applicant or their family member had a pre-existing condition, the application could be denied, or the premiums, deductibles, co-insurance, and other financial terms could be extremely disadvantageous. Even worse, even if an applicant didn’t think or know that they had a pre-existing condition, if they later became sick, some insurance companies would scour previous medical records for any reference – sometimes no matter how vague – and deny coverage for treatment based on their interpretation of evidence of a pre-existing condition. Under PPACA, there is no such thing as a pre-existing condition, and all applicants are treated the same.
Inclusion of Essential Health Benefits
With PPACA, all certified health insurance plans must include a minimal list of essential benefits, which include; ambulatory patient services; emergency services; hospitalization; maternity and newborn care; mental health and substance use disorder services, including behavioral health treatment; prescription drugs; rehabilitative and habilitative services and devices; laboratory services; preventive and wellness services and chronic disease management; and pediatric services, including oral and vision care.
No cancellation due to your consumption of benefits
Before PPACA was in place, some insurance companies would cancel a person’s policy if they became sick, and it appeared that they would need expensive treatments in the near future.
No seemingly random denial of coverage for included benefits
One of the most egregious acts that some insurance companies would engage in is simply denying to pay for a benefit, with no explanation. When a person would challenge this, sometimes they paid, but often not until after months or even years of bureaucratic delays. Many people simply gave up or didn’t challenge, often with disastrous financial and health consequences.
Subsidies for individuals and families having trouble affording health insurance
Generally speaking, for anyone whose Adjusted Gross Income (AGI) the previous year had been < 400% the federal poverty level, any individual insurance policy purchased through a federal or state marketplace (such as healthcare.gov) was eligible for an Advanced Premium Tax Credit based on income, number of family members, location, and the plan being purchased. The target for this program was to have these family’s premiums not exceed 6% of their AGI. The easiest way to see if you qualify for a subsidy is to go to healthcare.gov and enter your personal information. Note that if you purchase a policy and take advantage of an available subsidy, when you file your income tax the following year, your AGI will be compared to what you forecasted and if it’s lower, you’ll receive an additional tax refund. Likewise, if it’s higher, you’ll have more tax due.
For a quick check on whether you qualify and if so, for how much, go here.
A quick look at Advance Premium Tax Credit eligibility
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