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Understanding Obamacare

On March 23, 2010, President Obama signed into law the federal Patient Protection and Affordable Care Act, more commonly referred to as the Affordable Care Act, or Obamacare.

Three years later, Obamacare continues to dominate headlines, especially as the beginning of Phase II approaches. Despite the constant coverage, many Americans are still uncertain about the Act’s proponents.

Why health care reform?

This comprehensive health care reform act was built with three fundamental goals in mind:

1. To lower the cost of healthcare in the United States.
2. To improve the quality of healthcare in the United States.
3. To make healthcare more accessible to everyone Americans, especially those currently uninsured.

To achieve these goals, a major provision of Obamacare requires every United States citizen to be covered by health care insurance. To make this requirement obtainable, the act seeks to decrease healthcare insurance costs and improve healthcare accessibility with the following logic:

1. Because health care providers will no longer be required to provide the costs of uninsured health care, overall costs of health care will go down.
2. Because no individual can be denied health care on account of inability to pay or previous conditions, health care accessibility will increase.

How and when will Obamacare happen?

Obamacare has been split into two major phases:

Phase 1, implemented between March 2010 to January 2014 

• • Insurers spending too much on profits and administrative costs, will be forced by the federal government to return money back to the consumers in the form of rebates.
  • Preventative care like vaccinations and screenings will become free.
  • Medicare recipients over the age of 65 or on disability will get increased help with drug costs.
  • Individuals under the age of 26 can remain on their parent’s health insurance policies.
  • Tax breaks will be given to small businesses offering employee health care insurance.
  • Lifetime limits on health insurance policies will become illegal.
  • It will become illegal to discriminate against children with preexisting health conditions.

Phase 2, implemented January 2014 to beyond 

• • Medicaid will be expanded to include all low-income individuals in all fifty states.
  • Citizens who become unemployed or are employed but receive inadequate coverage can apply for a tax credit to help defray insurance costs.
  • Employed individuals who are not covered under a work insurance policy will be able to purchase private insurance through an exchange, which is a government regulated market of a variety of private insurance that offer easily understood health care options to the consumer.
  • Insurance companies will no longer be able to reject or raise prices on individuals who are sick.

What will prevent abuse of Obamacare by those choosing not to get insurance?

1. Individuals who choose not to pay for insurance will be required to pay a special tax.
2. Large companies who refuse to provide employees with insurance coverage will be required to pay fines.

While we expect additional tweaks and changes to happen over the next several years as Obamacare is fully implemented, this is an overview as it stands today. For more information, or to schedule a complimentary appointment contact us.