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Health Insurance for All: An Affordable Care Act Timeline

iStock_000009605208SmallThere’s no doubt about it: the Patient Protection and Affordable Care Act, aka Obamacare, is a complex and confusing law. It’s no wonder that people are baffled. In fact, a recent survey by the Kaiser Family Foundation found  that 4 in 10 Americans don’t even know that it’s the law of the land. And even lawyers are working out the legal implications, many of which continue to change.

To help demystify the massive healthcare overhaul, we’ve created a timeline that breaks down the most significant ways it changes how Americans pay for and receive medical care, and also a bit about how it’s working out so far.

Only the experts may understand the law line-by-line, but there’s one simple fact everyone needs to know: by the time you wake up on New Year’s Day 2014, you’re required by law to have health insurance—like it or not.

2010

March: President Obama signed the Patient Protection and Affordable Care Act (ACA). It includes a Patient’s Bill of Rights with new consumer protections, and a mandate for universal coverage. While all business have to fulfill some requirements under the new law, only those with more than 50 employees will have to offer health insurance plans.

September: Several important provisions began to take effect, such as tax credits for 4 million of the smallest business, an end to lifetime limits for essential services on new plans, and a requirement that dependent children can extend coverage on their parents’ plans up to the age of 26.

This change has already appeared to have an impact. According to the Commonwealth Fund’s 2012 Bienniel Health Insurance Survey, 79% of young adults ages 19 to 25 were insured last year, up 7% or 3.4 million people since 2010. This occurred at a time when the numbers of uninsured people in other age groups increased.

2011

Seniors started getting a 50% price break on some prescription drugs not covered by Medicare, with additional savings increasing over time. To rein costs to consumers, insurance companies were required to spend at least 80 cents of every dollar on medical care rather than administration.

2012

June: In a 5-4 decision, the Supreme Court ruled that the Affordable Care Act is constitutional.

In his majority opinion, Chief Justice Roberts wrote: “The Affordable Care Act’s requirement that certain individuals pay a financial penalty for not obtaining health insurance may reasonably be characterized as a tax. Because the Constitution permits such a tax, it is not our role to forbid it, or to pass upon its wisdom or fairness.”

Clarence Thomas, Antonin Scalia, John G. Roberts, Anthony M. Kennedy, Ruth Bader Ginsburg, Sonia Sotomayor, Stephen Breyer, Smauel Alito Jr., Elena KaganThe court left the law largely intact, but it did rule that Congress does not have the power to force states to participate in a Medicaid expansion or lose all federal payments. That means some states are sticking with the status quo rather than expanding the government insurance program to a larger group of low-income people. So far, 13 states have opted out, 26 are going all-in, and the rest are undecided or somewhere in between.

2013

October: The biggest changes are set to begin.

Individuals and small businesses will be able to buy insurance through brand-new marketplaces designed to make it easy to understand and compare “apple-to-apple” plans. The marketplaces—also called “exchanges”—are supposed to increase competition, drive down costs, and improve quality.

Individuals who don’t get insurance through work can peruse the health insurance exchanges. These exchanges will be government-run, but all the plans will be offered by private companies, including many new names. The exchanges will have different names in different states, but they all have the same goal: to create a way for regular people to get health insurance that will meet their needs and not break their budgets.

Beginning October 1, you can fill out one application that will open the door to all the policies available to you. All of these policies must meet minimum standards, covering preventative care, hospitalizations, pregnancies, and pre-existing conditions. No one with health problems can be rejected, and “junk plans”—which lead to unpleasant and expensive surprises for people who think they’re covered—will be banned.

Consumers can choose between four levels of coverage with uniform standards: bronze, silver, gold and platinum. The plans will differ in their premiums and out-of-pocket expense burdens.The new plans kick in January 1, 2014.

Most people shopping in the exchanges are expected to qualify for cost reductions or tax credits. For example, a family of four earning less than $94,000—400 times the federal poverty level—will qualify for tax credits. The lower your income, the more help you’ll get. In addition, many more people are expected to qualify for free or very-low cost care through Medicare.

Businesses with fewer than 50 employees don’t have to offer health coverage, but those that want to will have a new option come October: The Small Business Health Options Program (SHOP). Similar to the individual marketplaces, SHOP give for businesses an easy way to, well, shop around. Those who do buy plans may qualify for tax credits up to 50% off premiums, and can deduct the rest of premium costs.

Businesses can buy plans on their own or work through a broker at no additional cost, but if they offer insurance to one full-time employee, they must offer it to all.

2014

January 1: Every American man, woman and child must have health insurance—whether you bought it on your own, got it from your employer, or are enrolled in a government program like Medicare.

Under the law, if you’re an American citizen and you ignore the mandate, you’ll be fined,or rather, taxed: $94 per person, increasing to $695 in 2016.

But in reality, there will still be millions of people who are uninsured, while only a small percentage of the population is expected to pay. That’s because millions of people will be off the hook due to their income level, personal beliefs, or because they’re not citizens.

In 2011, about 15 percent of the population—or about 48 million people—were uninsured. By 2016, the Congressional Budget Office predicts that the uninsurance rate will shrink to 9 percent.

That’s about 30 million people who, in theory, will be on the wrong side of the law. But because of the exemptions only about 6 million of them, or only 2 percent of the U.S. population, will have to pay. Those new taxes will still add up to $7 billion.

2015

Big businesses, who face big fines if they don’t offer adequate health insurance to all full-time employees, cried foul and got an extra year to comply with mandate. But as of January 1, 2015, they must comply with the law. The rules say that companies can’t skimp on plans or offer unaffordable options, and they can’t pick and choose who gets them—for example, covering managers only.

Large companies face “shared responsibility” fines of $2,000 for each worker they don’t offer coverage too. While some business say they’ll be better off paying the fine rather than complying, the government’s estimate is that only about 10,000 companies are expected to be affected. That’s less than .2% of the 6 million firms in the U.S.

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