The Obamacare Marketplace Is The New Health Insurance Marketplace
- Written by O. M. Editor O. M. Editor
The Obamacare Marketplace is the epicenter and future of health insurance in America, created by the Patient and Protection Affordable Care Act. The PPACA is now fondly known as Obamacare, in recognition of President Obama's signature achievement. The big reforms include the individual mandate, guaranteed issue policies, essential health benefits, affordability tax credits or health insurance subsidies and Medicaid expansion. The new health insurance marketplace will be launched in the last quarter of 2013 to allow preliminary time for 2014 early enrollment.
The Obamacare marketplace will be made up of health insurance exchanges individualized to each of the 50 states. Some states will run and operate their own, while others will be handled by the federal government. The politics matter little to American consumers, what matters is accessible affordable health insurance. The state exchanges are the infrastructure to the new health insurance marketplace.
The Health Insurance Marketplace Implementation
The new health insurance marketplace is an enormous undertaking. The Affordable Care Act is an incredibly complex and comprehensive reform law affecting the entire American healthcare industry which makes up about 18% of the entire country's GNP. America being made up of a two-party political system has seen one party fight healthcare reform at every possible turn, but thankfully to no avail.
The PPACA is the law of the land, it has been affirmed by the highest court in the land along with the endorsement of the people through our democratic process. Obstructionism for political party sake over the will and best interest of the American people should not be tolerated, we are all Americans first and foremost.
Hopefully the day is coming where we can all work together as Americans striving for a better union and make the most of our healthcare system. The American healthcare system of the past proved itself woefully lacking in almost every possible measure, over priced, underperforming and inadequate. The people have spoken, as well as the Supreme Court, Obamacare is the law of the land. Our political leaders' job is to see to it we make the most of it, or pay the price at the polls.
Aside from the politics, the complexity of the health insurance marketplace is considerable. The online exchanges will have to coordinate a massive technical task. These exchanges will not only be providing a consumer friendly health insurance shopping marketplace but will also be qualifying and delivering to individuals and small groups the various health plan options and tax credit subsidies. This will mean accessing and coordinating data from the IRS, CMS and HHS among other government agencies.
The Obamacare Marketplace Is Consumer Friendly
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 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. Health plans with varying benefits will be coded to metals with the highest benefits and premium cost working down to the lowest. The order will be platinum, gold, silver and last bronze. All plans will include the regulated 'essential health benefits' of the reform law. 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.
The Medicaid expansion included in Obamacare will provide coverage to all eligible Americans that make less than 138% of the poverty level except for the states that refuse to expand this coverage for the residents. The federal government is picking up 100% of the costs for the states in the first several years then over time is reduced to 90% so it's hard to understand why any state would refuse such health care coverage for their residents.
Major Consumer Health Insurance Reforms
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. This '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
Health plans with provider networks, these caps are not inclusive to providers considered out-side-of-network.
The Individual Mandate
The individual mandate is a key aspect 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.
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. 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.
Health Insurance 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. To get a better understanding of tax credit availability, that are based on age, income, family size among other factors see Obamacare subsidies.
The 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.