The Obamacare Marketplace is the New Health Insurance Marketplace
- Written by O. M. Editor O. M. Editor
Obamacare Marketplace Preamble: by I. Mandate
January 7, 2014
A new age has dawned for over 40 million uninsured Americans. Americans have gained healthcare security and access. Implementation will be an ongoing work in progress as the country works through the reform transition but there is no doubt Americans will appreciate their new found healthcare liberty. The healthcare inflation cost has dropped faster than any time in last 50 years in America since enactment of Obamacare in 2010. The tip of the iceberg of what is to come.
The Obamacare marketplace foundation is now in place. The Patient Protection and Affordable Care Act (PPACA) is over 2000 pages of legalese that comprehensively reforms an inefficient and tired sick-care system. Simplicity was never a realistic option for the massive reforms necessary, the American healthcare system is about 18% of the GNP. Fortunately, it is the undisputed law of the land and the new healthcare marketplace foundation is behind us. Implementation refinement and tweaking will be required to make the American healthcare system all it can be! Imagine if all of our political leaders actually worked together to accomplish the best healthcare system for all Americans - too much to ask?
Obamacare Verses the Status Quo Healthcare Marketplace
The status quo healthcare special interest realize that the good old days of run amuck medical cost inflation and unfettered profits is over - competitive health outcome performance is the new direction. Many fought Obamacare in a relentless, organized and well funded misinformation campaign to no avail. Even with an entire major American political party to do their bidding. The healthcare reform train named Obamacare left the station back in spring of 2010 and just would not be stopped, the train is now pulling into the next major stop - America all aboard!
The Obamacare Marketplace Will Squeeze the Healthcare Marketplace
The extensive health insurance industry regulation in Obamacare is the key to reform throughout the healthcare industry. The new Obamacare marketplace platform will unleash the free market concept of competition across the board. The insurance industry reform in Obamacare will be the 'big hammer' that drives healthcare costs down. Here is why...
Obamacare requires health insurance to provide quality, comprehensive coverage with strong consumer protections that are outlined (below). As of 2014 all individual and small group health insurance sold in or outside the Obamacare exchange marketplace must comply. Insurance carriers will now be competing side by side against their competitors in a totally new and open online format. They now have to run their operations (including profits) within limited margins 15-20% of all premiums collected - 80 to 85% of all premiums collected must be utilized to pay policy holder healthcare benefits or be reimbursed backed to the policy holder - this is called the 'medical loss ratio'. Efficiency and competitiveness will now be the leading driver that increases carriers market share and profits not underwriting or salesmanship.
These powerful new regulations combined with the super competitive Obamacare marketplace is where free market forces will work their magic. The insurance companies being the 'payers' for their policy holders will go about their business squeezing healthcare providers to be as competitive as possible to win their business. You know that saying "stuff rolls down hill"! The marketplace payers with all the healthcare clients will wield the 'hammer'! The healthcare providers in order to win their 'in-network' business will sharpen their pencils while striving for healthcare efficiency and results. This 'efficiency' will need to be accomplished while keeping the consumer happy with healthcare services in order to retain their business, as the consumer can change insurance carrier in any annual open enrollment period. Is the picture getting clearer? Can you see why the status quo misinformation and scare tactics have been emphatic? It may take a few years to play out for all to see but the healthcare inflation cost curve is never going to look like the 'reach for the sky' hold-up of the past several American decades.
Accountable Care is the New Buzzword
Included in the PPACA prescription is to transform the pay-for-services sick-care system into a pay for healthcare outcomes approach. Yes, an ounce of prevention is worth a pound of cure - not rocket science but not the sick-care status quo! With accountable care practice there will be no incentives for unnecessary testing and procedures. Providers will be motivated by healthcare outcomes and will practice accordingly. Saving oodles of money while practicing smarter medicine. A prime example of this is the required 'no-out-of-pocket' annual preventative physical included in all the 4 metallic coded health plans including Medicare plans.
Due to Obamacare most people are receiving expanded health benefits, among them, preventive services without co-pays, including mammograms and other cancer screenings, some vaccinations, contraception services, including birth control pills, and periodic wellness exams.
Affordable Quality Healthcare Coverage for All Americans is the Goal
There is a reason why the old status quo American sick-care system was costing twice as much per capita as that of the world's leading healthcare systems but rated in the basement for healthcare outcomes and results among industrialized countries.
The status quo special interest and their cohorts fought to prevent Obamacare passage back in 2010, tried to have it overturned in the US courts, tried to repeal it in congress (some 40+ times), asked the American electorate to back a political Obamacare repeal platform in the 2012 presidential election - all for not! The Obamacare Marketplace is the new healthcare marketplace - forget the naysayer fear mongering - it is long past time to get on board for a better America - embrace your fear! - I. Mandate
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The Obamacare Marketplace Is Consumer Friendly
The Obamacare marketplace will be made up of state exchanges individualized to each of the 50 states and DC. States chose between running their own or having a federal-ran online exchange marketplace.
The health insurance marketplace will be geared for consumer convenience. The marketplace will be accessible online 24/7 via the Internet through your personal computing device. The idea is to have a consumer friendly, yet comprehensive online format to access health insurance in the mold of other online markets such as Travelocity or Expedia. Physical locations and support help personnel called "navigators" are also to be provided for those who need such help. The health insurance marketplace is a new point-of-sale allowing Americans straight forward informative shopping for qualifying health insurance inclusive of tax credits or Medicaid, if applicable.
Side-by-side competitive shopping on an apples to apples basis for easy consumer understanding and comparison. Health plans with varying standardized benefit level will be coded to metals with the highest benefits and premium cost working down to the lowest. In descending order will be platinum, gold, silver and last bronze. The trade-off in the varying plans will primarily be geared towards the cost of the premiums to the cost of out-of-pocket expenses. With the richer plans including additional benefits over the lower priced plans.
Obamacare Consumer Health Insurance Protections
Insurance carriers will no longer be able to turn away consumers for pre-existing conditions, health history nor drop consumers when they become a bigger health risk or medical burden. Annual and life-time caps on healthcare benefits is now prohibited. The 'guaranteed issued' health insurance reform is a first for the American individual health insurance market. Community rating will also be the norm for all policies sold beginning January 1, 2014. These major insurance reforms were paramount to achieve universal health care coverage but they also made the insurance companies vulnerable to being cheated or gamed. For example, it would not be viable for the insurance companies if people wait and obtained a health plan just before checking in to the hospital for a major operation. The individual mandate was established to alleviate this problem of gaming the reformed insurance system, by requiring personal responsibility for all to have health insurance coverage.
The Out-of-Pocket Maximum (OOPM) of annual expenses is capped in the reform law as of 2014, with future annual increases indexed to inflation, they are as follows: Individual health plans - $6,400, individual family health plan - $12,800. Small Group plans - $2,000 for singles - $4,000 for family. In health plans with provider networks, these caps are not inclusive to providers considered out-side-of-network.
The Obamacare Individual Mandate
The individual mandate is the heart and backbone of Obamacare. Without the individual mandate there would be no 'guaranteed issued' health insurance, community ratings or the hope of universal health coverage. The mandate requires the personal responsibility to have health insurance for most Americans to make it economically feasible for insurance carriers to provide these most important reforms. For this reason the individual mandate is considered the heart of the Affordable Care Act. The individual mandate was found to be constitutional by the Supreme Court in June 2012 after a two-year contentious court battle, it is now undisputedly the law of the land. The individual mandate is enforced by the IRS through a tax penalty and will be a new aspect of Americans income tax filing.
Obamacare Essential Health Benefits
The new health insurance reforms call for much richer and comprehensive health benefits, by requiring minimum quality of the health benefits offered in all individual and small group health plans. All insurance coverage as of January 1, 2014 are required to offer 'Essential Health Benefits' all health insurance carriers will have to offer health plans that meet these minimum requirements, regardless if sold in or outside the state exchange marketplace. These new standards are outlined in, the following 10 mandatory health benefit categories:
Ambulatory patient services, emergency services, hospitalization, laboratory services, maternity and newborn care, mental health and substance abuse services, prescription drugs, rehabilitative and habilitate services and devices, preventive and wellness services and chronic disease management, pediatric services, including oral and vision care. There are exceptions to the rule, some of which are: All grandfathered plans including individual and small group, fully insured Large Group Plans and Self-Funded Plans.
The Patient Protection and Affordable Care Act; Standards Related to Essential Health Benefits, Actuarial Value, and Accreditation; HHS Final Rule
Obamacare Subsidies - Affordability Tax Credits
With the vast new consumer protections and more significant health benefits comes concerns of affordability. Some premiums will be more expensive but Obamacare has taken this into consideration by offsetting those expenses with health insurance subsidies for those between 100% to 400% of poverty level. Also, by offering Medicaid to those below 138% of the Federal Poverty Level (FPL). Only residents in states who approve of expanding Medicaid will have access to such Medicaid coverage. The Affordable Care Act requires Federal payment for 100% of the additional Medicaid costs to the states through the first few years of reform that gradually scales back over time to a minimum of 90% of the cost. A sweet deal for individual states, giving and paying for their most poor and neediest residents' healthcare access.
The affordability tax credits geared to subsidize health insurance costs for folks making up to 400% of poverty level will be a major boon to affordability. These tax credits are figured and applied at the point-of-sale in the health insurance exchange marketplace only. To get a better understanding of tax credit availability, that are based on age, income, family size among other factors see Obamacare subsidies.
The Obamacare SHOP Exchange Health Insurance Marketplace
The SHOP (Small Business Health Options Program) Exchange is the small business marketplace for employers of less than 100 employees. It will contain many advantages such as a central online competitive marketplace to informatively shop for small group business plans to secure health plans for the businesses' employees. This marketplace also has the competitive comparative shopping, has tax credits available to the employer depending on certain requirements regarding his business and his employees.
To qualify for use of the SHOP Marketplace, businesses must have fewer than 50 full time-equivalent (FTE) employees but expanding to 100 in 2016. Tax credits are figured by considering average worker's wages among other considerations. These tax credits can cover up to as much as 50% of the health plans' costs.
There is a employer mandate requiring employers to provide minimum essential health coverage to their full-time employees and dependents for those with 50 or more employees failure to do so requires a shared responsibility fee of the lesser of $2000 for each employee exclusion, the first 30 employees are exempt from the assessment or $3000 for each uncovered employee that receives coverage and tax credits through the Obamacare marketplace. The coverage must be affordable so that the employee contribution does not exceed 9.5% of their income and the employer must pay 60% or more for the health plan expenses. Small business owners with fewer than 50 employees are exempt from this mandate. The employer mandate has been delayed 1 year until 2015.
The Obamacare facts are: Obamacare is not a government takeover of the American healthcare system but rather a vast improvement. Obamacare expands comprehensive affordable healthcare to tens of millions of Americans. Obamacare does not put the government between you and your doctor, but through regulation, prevents the insurance companies from coming between you and your doctor. Obamacare enhances health insurance benefits and security for all Americans, while utilizing private, free market healthcare providers. Workers for the first time, will have true health insurance portability, and will no longer be tied to any employer solely for health insurance considerations. Beginning 2014 when you leave an employer, and by extension the employee group health plan you will be able to buy guaranteed issued health insurance via the Obamacare marketplace. Americans have never had such healthcare coverage liberty.
There is sure to be many growing pains moving forward with comprehensive reforms that encompass the entire American health care industry. Progressively moving forward and making adjustments as needed to achieve a more productive, efficient universal health care system should be America's goal.