Are You Being Impacted by the Affordable Care Act?

by Miranda Marquit · 3 comments

The Patient Protection and Affordable Care Act (ACA, or “Obamacare”) was passed in 2010, and provisions of the law have been going into effect since then. One of the biggest changes resulting from the ACA goes into effect starting with the new year.

Beginning in 2014, everyone is required to have health insurance coverage or pay a fine. There are exceptions to this rule, and there are those who would rather pay the fine — at least for now — than get the coverage. For the first year, the fine is relatively small. As implementation progresses, though, the fine gets bigger, so it might not be worth it to skip the insurance in two or three years.

So, what does this mean for you as a consumer? Jacqueline Garry Lampert is the founder of Lake Street Strategies, a public policy strategy and consulting firm, and consultant to UPMC. She has many insights about the ACA’s impact, and here are the three groups she thinks will be most affected:

Individuals Who Purchase Their Own Plans

“The vast majority of Americans who receive health insurance through their employer will largely be unaffected by the ACA,” Lampert says. “Individuals who purchase insurance on their own, outside of a group in the individual market, and those in small group plans will likely see some changes.”

Even those whose plans remain largely unaffected by the ACA might see some changes in terms of cost. “Insurance market reforms, such as restrictions on how much insurers may vary premiums due to age and tobacco status, and the elimination of premium variation due to gender and health status, will cause premiums to rise for some, but may have little to no premium impact for certain groups,” she says.

Individuals Who Are Currently Uninsured

Those without health insurance right now are those most likely to see the biggest changes, and that’s not surprising. “Many individuals without access to group insurance will be able to purchase insurance for the first time,” Lampert points out.

“For example, under existing rules, individuals with pre-existing conditions could simply be denied coverage by an insurer, leaving them with no protection from astronomical health care costs. These individuals will now be able to purchase insurance and, depending on their income, may receive a tax credit from the government to help reduce their premiums and cost-sharing responsibilities.”

Individuals with Bare-Bones Coverage

There has been a lot of concern over changes involving the cancellation of certain plans. “It is important to remember that plan cancellations are impacting a small number of Americans who purchase their insurance outside of a group,” says Lampert.

Many of these plans are those that don’t meet the basic requirements imposed by the ACA. “Anecdotally, we’re seeing that a lot of these plans have very low premiums because they offer bare bones coverage,” she continues. “Some don’t offer any hospital coverage at all, or have sky high deductibles and no out-of-pocket limits to protect a consumer from bankruptcy.”

In some cases, the fact that more comprehensive plans are offered — and possibly with the help of a tax benefit to offset some of the increased costs — can be a good thing.

Ultimately, though, whether or not you’re affected substantially by the ACA depends on your situation. Research the options to find out what you can do to make the most of your health care.

How has the ACA affected you?

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{ 3 comments… read them below or add one }

John S @ Frugal Rules December 17, 2013 at 5:45 am

We purchase our own coverage as we run our own business. I’m not entirely certain how we’ll be impacted. We live in Nebraska and the little bit of looking we’ve done on the exchange has shown us that we will see an increase, but it doesn’t look to be too substantial. It’ll be interesting to see what will happen, especially now that they extended the ability of possibly keeping your private plan for another year.

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Ryan @ Impersonal Finance December 17, 2013 at 5:53 am

I work in the insurance industry (for a major insurer) and I can tell you rate shock is real. Plans will/have changed to meet ACA mandates and guidelines, and the community rating pool is going to drive some employers away from offerring coverage. I agree the system needed some reform, but more time to implement changes to an industry comprising 1/6 of the economy.

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Logan December 17, 2013 at 10:08 am

This has been a hot topic on some of the finance/savings blogs I follow. Definitely a lot or pros and cons for many people to consider.

How it affects those that are self-employed or wish to retire early:
http://www.mrmoneymustache.com/forum/welcome-to-the-forum/obamacare-makes-early-retirement-easier-and-more-secure/

http://www.mrmoneymustache.com/forum/welcome-to-the-forum/obamacare-updates-anyone/msg182513/#msg182513

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