5 Things We Now Know About Obamacare

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We’ve learned a lot about Obamacare in the past week. While the trouble with the HealthCare.gov website has monopolized the news, the site will eventually get fixed. What’s here to stay, however, are the lasting changes the Affordable Care Act has made to health care and medical insurance.

Here are the five things we now know about Obamacare that could affect your health insurance and medical care.

1. Premiums Will Go Up for Many

Notwithstanding promises to the contrary, it’s now clear that premiums will be going up for many. Why? There are three key reasons.

First, Obamacare requires all health insurance plans to meet certain standards. The intention behind the rule was to make sure that policies meet what government officials deemed to be minimally acceptable standards. They call these standards “Essential Benefits.” While some view this as protecting consumers, the protection comes at a price. Lower cost policies that do not meet these standards are being cancelled by insurance companies and replaced with more expensive polices.

Second, the policies don’t have any spending caps. While there may be good policy reasons for this rule, it comes at a significant cost that will be paid by those buying the insurance.

Third, health insurance companies can’t charge more if you have a pre-existing condition. While such a rule helps those who previously were uninsurable, it also comes with a cost. The cost is born by those who do not have a pre-existing condition. How? Those who are healthy will pay more for insurance than they otherwise would to offset the cost of insuring those with existing medical conditions.

2. Many Will Lose Their Health Insurance

Contrary to promises made when Obamacare became law, it’s now clear that millions will be unable to keep their current policies. As noted above, Obamacare requires health insurance to cover certain Essential Benefits. The law was written to allow some existing policies to be grandfathered from this requirement, allowing people to keep less expensive policies. Regulations written to implement the law, however, gutted the grandfather provision. According to CBS News, more than 2 million will get booted from their existing converage.

3. You Don’t Have to Buy Through the Exchanges

One fact lost in all the noise is that in most cases one doesn’t have to buy individual health insurance through the exchanges. Consumers can still buy insurance through sites like eHealthInsurance.com. For the moment, however, consumers must go through the exchanges if they qualify for and want to take advantage of subsidies.

4. Obamacare is Immensely Complicated

Obamacare is an extremely complicated law. That fact is nothing new. But the recent problems surrounding HealthCare.gov underscore just how complex the new law is. Perhaps the most complicated aspect are the subsidies. Information must be obtained from the IRS to determine if an individual qualifies for a subsidy, and if so, for how much. This information, along with information about the insured, must then be transmitted to the insurance carrier. The result is a website that thus far has cost more than $600 million to build. That’s less than Facebook spent in its first six years of operation.

5. The Exchanges Offer Limited Choice of Doctors

To keep costs down, many insurance companies in the exchanges limited the number of doctors in the network. The policies tend to have fewer hospital networks, and many don’t have academic medical centers in the network, according to CNN. The result is that shoppers will need to make sure the doctors and hospitals they want are available with the insurance they buy.

Published or Updated: April 16, 2014
About Rob Berger

Rob founded the Dough Roller in 2007. A litigation attorney in the securities industry, he lives in Northern Virginia with his wife, their two teenagers, and the family mascot, a shih tzu named Sophie.

Comments

  1. Frank Morris says:

    As soon as you called the Affordable Health Care “Obamacare”, I knew where you were going with your review. This needed healthcare reform like social security which wasn’t initially wildly popular will take time to work out. This is what Romney contributed, The Clintons, The Kennedy’s and a lot of people in this country. We get enough of this scary talk, please tell me something news worthy and helpful please. Respectfully,

    (This is resumitted. I thought there would be opportunity to edit, the post)

    • Rob Berger says:

      Frank, one big difference between Obamacare (a very common shorthand for the Patient Protection and Affordable Care Act) was that Social Security was passed on a bi-partisan basis. So was Medicare. So was the Civil Rights Act. I do appreciate your perspective, and I do believe that Obamacare will accomplish some good reforms. Unfortunately, it will also do some real harm, which is unfortunate because we had the opportunity to reform health care in a much more productive way.

      • Frank Morris says:

        Thanks Rob. Just so you are clear, I am an Independent. When did we have this opportunity to reform health care (curious!) I am of the opinion that nothing will actually get done until the good of the country is once again the issue. whenever that will be! I was so disheartened to hear that the agenda going forward is to see the president fail. Let me also take this opportunity to thank you for the work you are doing. I often pass your tips along to our congregations in a tips newsletter. Again thanks

  2. David Auge says:

    Good article. I’m a conservative who has a pre-existing condition. As far as the ACA is concerned, I like the moral high ground that it stands on, giving people like me who don’t have really any insurance options that are good ones, better opportunities…but I feel that if we could cut prices on current things within the health-care system, that may be effective than what we are currently pursuing

    I was recently in the ER for an unknown issue over Labor Day and I’m now paying a 5800 personal loan to cover the ER bill – the most expensive thing that was done to me was a CT scan…which is costing me $5000.

    So if the “go to” option for people admitted to the ER, when the issue isn’t easily diagnose-able (which happens a good bit of the time) is to give them a CT scan…why the heck does it have to cost $5000?? Lets start there…

    • ChuloDO says:

      Glad you can appreciate, David Auge, the benefits of the ACA, which include lowering prices. Unfortunately, the ACA is less effective than a single-payer plan to bring prices down.

      Barack Obama (and the Left in general) was a proponent of single payer, but he (they) caved. Some still cling to the hope that single payer will happen in the future (see Forbes 10/28 Op-Ed for example). A single-payer plan would bring costs down, just like it has in many other countries.

      I hope that Americans on both sides of the aisle are taking note that although the Dems were weak, the Repubs are the ones who obstructed progress toward a more cost-effective plan–and continue to be a roadblock (and no well) toward the success of the ACA.

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