I would like to offer my interpretation of the federal government’s Affordable Care Act, commonly called Obamacare.
First of all, insurance companies will be regulated. There will be coverage under the parent’s policy for children up to age 26. There will be no maximum limit on what an insurance company will pay for an individual’s lifetime of health care coverage, and preexisting illness cannot prevent one from obtaining health insurance.
Preventive care, such as mammograms, colonoscopies and other related services, will be covered by all insurance plans with no out-of-pocket expense.
A Prevention & Public Health Fund will be created to promote general health and wellness programs and initiatives to combat obesity and discourage tobacco use, alcohol and drug abuse and other unhealthy conditions.
Added taxes will be placed on pharmaceutical companies, medical device makers and the tanning booth industry.
The government will regulate and control reimbursement to health care providers — that is, physicians and hospitals.
A commission, acting independently of congressional control, will develop new ways of paying for medical care, with a move away from the fee-for-service model. One such new model is called the Accountable Care Organization. This would function somewhat like an HMO, except that ACO patients would not be required to stay within a network.
In addition, there is the “individual mandate” part of the act. This is a requirement that starting in 2014, all U.S. citizens will be required to purchase health insurance. It pertains mostly to the 30 million people who, for whatever reason, are without health insurance.
About half of these uninsured people have incomes high enough to buy health insurance through state-run health insurance exchanges. The others have incomes low enough that they will be covered by the existing state-run Medicaid programs.
For people who choose insurance through the exchange, premiums will be regulated by the government, which will also provide subsidies to help those who cannot afford to buy insurance. People who work for firms with 100 or fewer employees will also be able to purchase their own coverage through the exchanges. Undocumented immigrants will be barred from purchasing insurance through the exchanges.
There will be a penalty to individuals and companies who choose not to purchase health insurance. This penalty — which the law calls a tax — will top out at $695 per individual and $2,085 per family. There will be no criminal or civil action for refusing to pay the penalty; however, the IRS could withhold tax refunds from those who owe penalties.
In summary, the Affordable Care Act is an attempt by the federal government to help provide health insurance to the 30 million-plus citizens who have no coverage. It makes significant pro-consumer changes to existing health insurance regulations and makes an attempt at offering programs that could improve the health of most American citizens.
There are some major questions being asked about this law, such as: Will there be enough medical providers to care for the newly insured millions of Americans? Will there be enough money to finance this ambitious project, and where will it come from? What happens to states that don’t want to increase their Medicaid programs?
This is a large and complex law with many details that still needed to be worked out. In a future column, I will give my personal assessment of its major provisions.