Posted: Sep 19, 2013 7:21 PM by Dan Shadwell, KSBY News
Updated: Sep 23, 2013 2:36 PM
The health care system in this country is about to undergo its biggest reform in generations.
For the first time, most people who've been un-insurable, will be able to buy health insurance from private companies that would have previously rejected them because of pre-existing conditions. Furthermore, those consumers will be able to choose their new policies, using an apples-to-apples comparison, at new health exchanges. In California, that marketplace is an online website. Enrollment begins October first.
In the first of our-two part series, we dig into the details to find out what you need to know about "Obamacare."
There's a lot of confusion about the Affordable Care Act, as it's officially known. The first thing is that if you already have insurance-either through your employer, Medicare, or the V.A., there's nothing you need to do. That's about 85% of the U.S.
If you're in that boat, changes to your policies will just improve your coverage, providing free preventative care, eliminating annual and lifetime caps on insurance payments, and eliminating pre-existing condition exclusions (according to experts, your policy premiums may rise somewhat as a result of the improved coverage.)
When the law takes full effect January first, the big change will be to bring most of the remaining 15% of Americans who have no insurance, under the umbrella of coverage.
Public health expert, Joel Diringer, is one of the experts charged with outreach and education. San Luis Obispo County hired his firm to make the law's various reforms intelligible to health care workers, medical providers, business owners, and private individuals. It's a big job, battling all the rumors, politics, and misunderstanding. He says people should focus on the big picture.
"Everyone can get insurance now and your premiums can't be any different because of your health status," he says. "No longer can insurance companies start inquiring about past medical history and deciding whether to insure you or how much to charge you."
Diringer holds a Masters in public health from Harvard University and was one of the original senior staff at The California Endowment, California's largest health foundation. He has spent thousands of hours studying Obamacare and he says there's nothing to be scared of.
"For most people, nothing will change," he explains. "If you have Medicare, keep it. It's yours. Nothing changes really, with Medicare. If you're on V.A., you have coverage. So, the individual mandate says you have to have coverage. Well, don't forget... about 80-85% of people in the country already have coverage."
And for those who don't, the state is unveiling its new exchange-coveredca.com. On the site, you can pick from a variety of plans, some with lower up-front costs and higher co-pays, others that cost more up-front, but it to the insurer to cover the bulk of the bills, if you get sick. Though the state won't begin processing applications for more than a week, he recommends everyone contemplating an Obamacare policy, try out the site, entering information about their family size, location, ages, and income.
A Bronze Plan covers 60% of expected medical bills, Silver covers 70%, Gold 80%, and Platinum 90%. Plus, for low and moderate income earners, there's help paying those premiums. Diringer says a family of four can make up to $80-thousand dollars a year and still get a federal subsidy, "...and that's what the calculator on coveredca.com does... it calculates your income, your family size, your location, and lets you know what your premiums are and then how much of that is subsidized by the Federal Government," says Diringer.
But Dr. Penny Borenstein says, this is no government take-over. "It still very much uses the private market so efficiencies are encouraged, both on the side of the provider as well as the insurers," she says.
She is the public health administrator for San Luis Obispo County and she's optimistic that Obamacare will be a big step in the right direction. She says more than 32-thousand residents of San Luis Obispo County may benefit from its provisions.
Since everyone will have to carry insurance, insurance companies won't go out of business, just paying for the most expensive patients. Their risk will be spread over the entire population and balanced by younger, healthy customers, who should put less demands on the health care system.
One of the health care act's provisions that's received a lot of attention, is the penalty for not getting coverage. Those fines will be imposed on tax returns and they break down like this:
In the first year, if you refuse coverage, you would owe the higher of $95 or 1% of your income. In 2015, that would jump to $395 or 2% of your income, and by 2016, $695 or 2.5% of your income.
The fine may be lower than paying for insurance, but Borenstein says you're taking a big risk if you get injured or sick and have to catch all the bills yourself.
Contrary to reports that Obamacare would destroy the economy, Borenstein points out, it may in fact, drastically reduce the number of Americans facing financial ruin, by eliminating annual and lifetime caps on medical coverage, "...because they happen to get into a car accident, or because they happen to get cancer. No one should live under that threat," Borenstein says.
She may have a point. A new study recently reported by CNBC http://www.cnbc.com/id/100840148 indicates medical bills are the number one cause of personal bankruptcy in the United States. Presumably, that would change once the Affordable Care Act's bans on annual and lifetime caps on medical care coverage take effect on January 1.
Borenstein says the shift to preventative care should also lower costs for the entire system over the long run, because people will be encouraged to seek treatment in the early stages of illness, when care is relatively cheap.
Next week, we'll dig into the rumors and misinformation currently in circulation about the Affordable Care Act. We'll focus a critical eye on what Obamacare will and won't do. Join us for that myth-busting story on Wednesday, September 25th at 6pm, and again Thursday morning, September 26th, beginning at 5am.
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