The Ultimate Guide to Obamacare

The voting and posturing and Supreme Court validation are all over and done with, and Obamacare is the law of the land. So, what does that mean for you and your family? We turned to dozens of local experts—doctors, nurses, hospital administrators, public-health advocates, insurers—and asked them to help us explain it all to you.

Philadelphia magazine's Ultimate Guide to Obamacare
Question 1: Guide to Obamacare

You think you can explain Obamacare? Really? Where do you even start?
Here’s what you have to know: As of January 1st, 2014, most Americans will be required to have health insurance or pay penalties. Most employers will have to provide insurance or face penalties. The states and the federal government are setting up exchanges to make shopping for insurance easier, and to let you see if you qualify for a tax credit toward your premium.

Question 2: Guide to Obamacare

I’m scared my company will stop offering health insurance once Obamacare kicks in. Could that happen?
Forecasts about what employers will do once the exchanges come online in October vary wildly. One survey found that zero out of 512 companies planned to drop health insurance, while another poll of 1,300 employers reported that 30 percent would. The problem with surveys that ask about future economic decisions, experts say, is that companies don’t actually make those decisions until they have to.

Here’s what we do know: Census Bureau data says employer-backed coverage for those under 65 eroded in nine of 10 years between 2000 and 2010, with only 58.6 percent of employers offering it in 2010. “Employers have been dropping coverage because it’s unaffordable, and this will continue regardless of Obamacare,” says Robert I. Field, a health management and policy professor at Drexel’s School of Public Health. “It’s possible now that some employers will drop it and blame Obamacare for their decision.”

The ACA makes dropping employee insurance almost a no-brainer. While it costs an average of $15,000 for an employer to provide insurance for a worker plus family, the employer will only pay a $2,000 penalty per employee for dropping coverage—a savings of $13,000 a pop. What’s more, the penalty only applies if the employee goes to the exchange, gets a policy and gets a subsidy. If the employee stays uninsured—or goes to the exchange and doesn’t qualify for a subsidy—the employer is off the hook.

But numbers don’t tell the whole story. What will ultimately stop many employers from dropping coverage—and has stopped them to this point—is the need to remain competitive in the labor market and attract the best employees. In fact, 87 percent of employers in one survey said they offer coverage to retain good workers. Theoretically, the tipping point would be if a large number of employers decided at the same time to drop coverage, effectively removing the benefits incentive from the table. Doing so, of course, would require a seriously organized effort.

Question 3: Guide to Obamacare

Will the insurance plan I have through my employer change?
Technically, no. The Affordable Care Act doesn’t mandate that employers have to change the insurance plans they offer to employees. In fact, a grandfather clause in the ACA states that plans that existed before the law was passed are exempt from many of its provisions—so long as those plans only undergo modest, routine changes. If your employer should make significant changes to your plan, such as cutting benefits or increasing your co-pays, it would no longer qualify for grandfather status, so your employer would need to offer you a new plan. In 2010, the Obama administration estimated that about half of employer plans would lose grandfather status by the end of this year.

Question 4: Guide to Obamacare

What are the “essential health benefits” that everybody’s talking about?
The term refers to a core package of health-care services, defined by the federal government, that’s required of all individual and small-group plans created since the passage of the ACA in March 2010. (Large-group and employer-provided plans are exempt; most already include these benefits.) The EHB designate 10 broad service ca­tegories—emergency services, maternity and newborn care, prescription drugs, ambulatory patient services and more—but it’s up to the states to decide what specific services fall within each category. Along with 20 other states, Pennsylvania and New Jersey went with a default option for deciding, as defined in the ACA; the former will follow an Aetna POS plan and the latter a Horizon HMO. Information about what’s covered in each state’s benchmark plan can be found here.

Question 5: Guide to Obamacare

I’ve shopped for health insurance before, and it was one big headache. Will Obamacare change that?
In theory, yes. Health insurance exchanges are online marketplaces intended to make insurance shopping easier by allowing for side-by-side plan comparisons based on quality and price. All policies offered on the exchange must include the essential health benefits, and there are caps for out-of-pocket expenses. Plans will be categorized in tiers according to their cost-sharing structure:

  • Bronze for lower-priced plans in which the insurer pays 60 percent of costs and you pick up 40 percent.
  • Silver for plans with a 70-30 cost-sharing split.
  • Gold for plans with an 80-20 split.
  • Platinum for plans with a 90-10 split.

Another plus: You’ll only have to fill out one application—a draft version posted online in March ran 15 pages for a family of three, and the government estimated it would take up to 30 minutes to complete—and if you qualify, you’ll see how much of a tax credit you’re eligible for right after you submit it. The exchanges will also include online calculators, glossaries and other resources.

“The strength of an exchange will be determined by the depth, specificity and accuracy of the information on it,” says Pamela Clarke, vice president of the Delaware Valley Healthcare Council. “We’re not sure yet how the information is going to be monitored—or who’s going to do the monitoring—to ensure it’s kept up-to-date.”

Question 6: Guide to Obamacare

Governor Corbett opted not to create a state-run health insurance exchange and instead will rely on a federal exchange. Does this matter to me?
Probably not. There will be little difference on the front end between state-run and federally run programs; both will include policies at various coverage and price levels, and use standard enrollment forms, marketing tactics and more. The difference is the back end, which will be managed by states, the feds, or a combination of both. (Under the ACA, states can reevaluate this choice each year.) Since Pennsylvania is one of 26 states opting for a federally run exchange—seven more chose state-federal ­partnerships—the federal government will have its hands full creating and implementing a new online database that merges tax files, immigration status, Medicaid information and myriad state regulations, all by October 1st. “There are going to be glitches. Websites are going to crash. We’ll find a lot of bugs,” says Drexel’s Robert Field. “People should expect that it will be a tough transition, and it will take time to work out all the kinks.”

Question 7: Guide to Obamacare

I’m happy my 25-year-old son can stay on my insurance. But what happens when he turns 26? His employer doesn’t offer insurance.
Take a closer look at the terms of your policy. Some children can stay on their parents’ insurance through age 30 in Pennsylvania and 31 in New Jersey, according to laws in those states. But if not, beginning in January, your son will be able to get coverage through the exchange. If he makes around $43,000 or less a year, he’ll be eligible for tax credits to help him pay for it. The credits can be applied to his premium each month, so he doesn’t have to wait until tax time for a rebate. If he’s really cash-strapped and willing to take a bit of a gamble, your son can get catastrophic coverage until age 30; it covers the essential health benefits and three visits with a primary-care doctor each year. Note that while his monthly premiums will be lower, cost-sharing for expenses beyond the covered benefits (if he needs an emergency appendectomy, say, or breaks his arm skiing) will be higher than under more comprehensive plans.

Question 8: Guide to Obamacare

It already takes me three months to get an appointment with my doctor. Will I be able to get in faster once Obamacare goes into effect?
Not likely, because there will be 29 million newly insured people seeking out primary- care docs. With only one in three ­doctors now practicing primary-care medicine, the Association of American Medical Colleges estimates we could face a shortage of 21,000 PCPs by 2015, swelling to more than 45,000 in a decade. Many older doctors are heading for retirement, and there aren’t enough med students choosing careers in primary care to fill their spots. While the ACA aims to create more primary-care residency slots through financial incentives and loan forgiveness for PCPs, some say it doesn’t do enough.

“ACA tinkers around the edges,” says David Nash, dean of Jefferson’s School of Population Health. “When a doctor comes out of medical school, he or she could be looking at $150,000 in debt—that’s a home mortgage. So many go into a specialty because it pays more.”

Question 9: Guide to Obamacare

If I can’t get in to see my primary-care doc, who is going to take care of me?
Under the new “patient-
centered medical home” model, your PCP will be like an air-traffic controller, orchestrating and managing your care with other providers and ultimately saving money by eliminating redundancies (you won’t need two MRIs for two different specialists, for example), increasing patient safety (Medications that don’t work together? A thing of the past), and encouraging patients to be more involved in wellness and prevention.

So while you should expect to spend more time at your PCP’s office, it may not be with your actual doctor. “The important role of the primary-care doctor will be to take care of complex medical problems, but all the mechanical stuff—g­etting your flu shot or a mammogram—could be done by somebody else in the office,” says Kay Kerr, chair of family practice at Main Line Health.

Question 10: Guide to Obamacare

My premiums just keep going up. Will the ACA do anything about that?
Probably not. In fact, it may make the premium predicament worse. “There are no clear, iron-clad guarantees that rates won’t go up by large amounts,” says Drexel’s Robert Field. Part of the problem, many experts say, is that the ACA doesn’t do much to address the underlying driver of premium inflation—that is, the actual cost of health care. We spend an average of $8,233 per person annually on health care in the U.S.—more than two and a half times what most developed nations do—and our health outcomes in many cases are worse.

On top of that, the ACA requires a new health-­insurance tax and minimum coverage levels, and outlaws discrimination based on preexisting ­conditions—all changes that will push premiums up. Then there’s the new rule that a plan’s oldest subscriber can’t be charged more than three times the rate of the youngest. This is a huge change for many states, including Pennsylvania and New Jersey, where current laws allow for 5:1 ratios or greater. While the measure may keep premiums down for older, sicker consumers, it could increase them for under-35s by as much as 30 percent. What’s more, if young people see rates go up, they may opt to pay the penalties and forgo insurance altogether, shrinking the pool of the insured and throwing off the ratio of healthy-to-sick within that pool. Meaning? Premiums go up again.

The Obama administration says there are enough provisions in the law to hold down premiums, including the health exchanges, which it says will keep insurers competitive. There are also measures to shield younger consumers from rate spikes, like allowing them to stay on their parents’ insurance and offering wage-based tax credits. In the meantime, the administration is keeping a close eye on rate changes, announcing in March that all requests for rate increases will be subject to review. The intention is to monitor market disruption now and tweak policies as needed before the meat of health-care reform goes into effect in January.

Question 11: Guide to Obamacare

I had to go to an out-of-network ER for chest pains. Will I have to pay extra fees?
According to the letter of the law, no, but there’s a catch. The ACA forbids insurers from charging higher co-pays or co-insurance amounts for out-of-network ER visits, and from imposing coverage limits that don’t exist for in-network care. However—and here’s the rub—nothing in the law prohibits hospitals from billing you later for any services your insurance doesn’t cover. This is called “balance billing,” and many states currently prohibit such billing for out-of-network care.

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