How Does Obamacare Work? 11 Questions, 11 Unbiased Answers
When will it actually kick in? Who qualifies for a subsidy? And what does it mean for indoor tanning addicts? We have answers from Kamy Akhavan, president of ProCon.org.
When Minyanville was searching for an unbiased take on this labyrinth of a law, we turned to an organization with only one dog in the health-care fight: the truth. ProCon.org is an award-winning nonprofit charity that operates with the explicit purpose of helping the public make informed decisions about complex social issues. For its 15.7 million readers, ProCon.org pores through volumes of legislation (in Obamacare's case, 900 pages worth) and weighs -- in equal measure -- the pros and cons from experts on both sides of the political aisle.
We spoke with Kamy Akhavan, the president and managing editor of ProCon.org to see what he found out when his reference site posed the core question: Is the Patient Protection and Affordable Care Act good for America?
The answer is a resolute, unequivocal, and thundering... "Eh, we don't know."
Unfortunately, the jury is still out on certain nuts and bolts of the bill. Some questions about Obamacare fall into ProCon.org's "debated" territory and will likely remain in a sort of speculative limbo until the law's final implementation. Only then, when it's laid bare before us in full effect, will we be able to dig in with that scalpel, dissect all its parts, and -- depending on our respective political bents -- either marvel at the innards or run for the restroom.
The good news is, ProCon.org does have definitive answers right now to many of our burning queries. Following are a sampling with clear-cut yes or no replies that we thought most relevant to Minyanville readers.
1. Can this thing still be repealed?
The big challenge to this came from the constitutional question -- which was answered 5-4 -- so it's not going to get repealed by the Supreme Court. The other place it could've been axed was in Congress. The House of Representatives has voted over 30 times to get rid of Obamacare but it'll never happen without passing the [Democrat-controlled] Senate. And even if it did pass the Senate, there's no way Obama would sign it. So, between the Supreme Court, the legislature, and then the president all saying "no," it looks like Obamacare is here to stay.
2. What parts of the Affordable Care Act have already taken effect?
In September of 2010 we started having coverage for young adults up to age 26 on their parents' plan. We've had free preventative care for services such as mammograms and colonoscopies, being done without a deductible, copay, or coinsurance. Insurance companies can't rescind your coverage if you make some kind of technical mistake on your form (like forgetting to put your middle initial). If your insurer says, "We don't approve your new heart valve, our policy doesn't cover it" you can appeal that. The lifetime limits on insurance coverage were lifted. And this is all nationwide, as federal law. In 2011 we started seeing more services for senior citizens. They can now get free wellness visits and free personalized prevention plans on Medicare.
Also, insurance premium rebates took effect if health insurers profit by more than 15%; so at least 85% of all the premium dollars they collect have to be spent on health-care services and health-care quality improvement. If they spend less than that they have to give back rebates to their members. Here at ProCon.org, we have received checks from our insurer because they were compelled to do so as a result of the Affordable Care Act.
3. So what's left to kick in?
January 1, 2014 is when a lot of the meat of Obamacare takes effect. The big ones are the establishment of state-run health insurance exchanges and the individual insurance mandate that requires every single person in the United States to have insurance coverage. If you're not insured, you have to pay a fine.
4. Is anyone off the hook for buying coverage?
There are literally some exceptions to the mandate. If someone already has insurance through Medicaid, Medicare, an employer, or a veterans health program, they don't have to buy insurance because they already have it.
Prisoners, undocumented immigrants, some religious groups -- those who have been historically exempt from the Social Security system such as the Old Order Amish and religious groups whose members pay for one another's health care. Also, if you're an American Indian and subject to the sovereign laws of your tribal community.
5. How will the fines work for not buying coverage?
It's a little bit complicated. First, they give you a year and they shake their finger at you. [Referencing the Cleveland Plain Dealer] in 2014, the penalty is either $95 for every adult and $47.50 for every child under the age of 18 in the household, or 1% of taxable income for the household, whichever is larger. And then it gets worse.
In 2015, they start shaking their fist. It's $325 for every adult and $162.50 for every child (up to $975 for a family), or 2% of taxable income, whichever is larger.
In 2016, that fist turns into a foot and it goes up to $695 for every adult and $347.50 for every child (up to $2,085 for a family), or 2.5% of income, whichever is higher. After 2016, the penalty increases annually by the cost-of-living adjustment.
6. How will the subsidies work for those who can't afford coverage, and what kind of criteria need to be met to qualify?
There will be no penalty for those who can't afford insurance, including those who don't make enough to file federal taxes or whose insurance premiums will cost more than 8% of their household income. The government will help them pay for it and try to do what it can to make that insurance affordable.
The White House says broadly that there will be tax credits for middle class families, small businesses, and millions of Americans will soon be eligible for tax credits, and if you can't afford insurance, it basically says don't worry about it, we'll help you.
The way Consumer Reports describes it, if you buy insurance on an exchange as an individual, you may qualify for a subsidy in the form of a tax credit if your household income is between 100% and 400% of the federal poverty level.
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