Understanding Obamacare

understanding obamacare


What the New Healthcare Marketplace Means For Americans
by Minya K. Irby | Living Well | Wednesday, October 2, 2013 

For many Americans, October 1, 2013 initiated a new direction in healthcare. For the first time in American history, you’ll have the option to purchase healthcare in an open market system called the “Healthcare Marketplace.” The Patient Protection and Affordable Care Act, which was enacted by President Obama has been highly debated. The bill itself has been difficult to understand for many Americans, leaving them wondering what will happen to their healthcare and what are the costs.  

Money for Healthcare

One key feature of the plan, will allow employers to give their employees money to purchase healthcare from the exchange as oppose to providing healthcare coverage, saving money in rising premium costs. At the same time, Medicaid expansion in some states has already gone into effect. This expansion of Medicaid will cover individuals under age 65 whose household income is 138% of the Federal Poverty Level who cannot afford to purchase healthcare without assistance. The new Affordable Care Act will also come with some new consumer protections that we have never experienced before in healthcare and a new medical loss ratio.  

Improvements in the Quality of Healthcare

The consumer protections set forth by the Patient Protection and Affordable Care Act will include extension of coverage to children up to age 26, regardless of whether they’re living at home, married, or are offered healthcare by their employer. The plan has an expansion of guarantee issue requirements, this means offering policies to groups and individuals regardless of their health condition. It will prohibit higher premiums on health status and gender, as well as, prohibit limitations and exclusions on pre-existing conditions. The new act will now require insurers to spend at least 80% of your premium dollars on healthcare cost and on improving the quality of healthcare. Consequently, any insurance issuer that does not spend at least 80% must issue a rebate to the policyholder.  

Healthcare Policy Benefits 

The plan includes ten essential health benefit categories that all qualified health plans must have, such as: 

ambulatory services and doctor’s office visits 

hospitalization, mental health and substance use disorder services including behavioral health treatment

rehabilitation and habilitative services and devices

laboratory services, emergency room services, maternity and newborn care

prescriptions, preventive/wellness/chronic disease management and pediatric services 

Other plan options will be available to include as co-op health plans, multi-state plans, and stand-alone dental  

Basically- the new healthcare marketplace will help individuals afford coverage in two ways: through premium tax credits and cost-sharing reductions. The premium tax credit will allow individuals enrolled in a qualified health plan to apply the tax credit to an advance payment of premiums or be credited toward their federal tax return filed for the coverage year. The cost-sharing reductions will have certain eligibility requirements but will provide additional savings on the cost of health care premiums.  

Photo credit:
 iStock Images 


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