7 Ways Obamacare Will Change Healthcare Forever


Going to Market

A new health insurance marketplace has been created to allow people to compare plans and costs by entering information online, by mail, or in person.

Most Americans are accustomed to being offered one plan or choosing from two or three plans through their employer. The plans were often very different, and hard to compare, because the information on deductibles, spend-downs, prescription costs, and other coverage may not have been easy to find.

In the marketplace, applicants are supposed to be able to compare specific details of plans and costs side-by-side. Theoretically, this will create more transparency, more competition between insurers, and fewer surprises for consumers.

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Individual Mandate

Much has been made of the individual mandate, meaning everyone in the U.S. must sign up for healthcare coverage by 2014 or face a fine. The logic behind the mandate is to create the largest possible coverage pool, which would theoretically open up more competition between private health insurers.

The idea was proposed in 1989 by the Heritage Foundation, and is also a key component of the healthcare law passed in Massachusetts by then-governor Mitt Romney. Such a mandate has not been enacted in any other place regarding healthcare, so this is a very big change to the way health insurance is purchased.

The fee is going to be based on the amount of time within a given year an individual remains uninsured. The fee is calculated as 1 to 2.5 percent of the individual’s total income.

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Big kids are covered, too

As part of the ACA, young adults can remain on their parents’ health insurance policies until they turn 26.

This is the case even if the child is married, eligible for coverage through their employer, not living with or financially dependent upon their parents.

Previously, children became ineligible as soon as they turned 18.

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Pre-existing conditions will be covered as of 2014

In the past, insurers could deny coverage of pre-existing conditions or refuse to insure individuals with a history of illness. As of 2014, pre-existing conditions will be covered, which is a provision tied to the individual mandate to purchase insurance. The mandate ensures that people who are not sick will still sign up for healthcare, creating a larger pool to spread and reduce costs.

Additionally, insurers won’t be able to cancel a policy after an insured becomes ill, or for reasons such as a mistake made on an application.

However, some things never change: insurance can still be cancelled for providing fraudulent information and nonpayment of the policy premium.

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No more doughnuts for grandma!

No, the government isn't forcing your grandparents to stop eating their beloved doughnuts, but it is eliminating a provision in Medicare which was costly for some seniors.

Seniors with Medicare Part D have encountered a “doughnut hole” in their prescription drug coverage. The doughnut hole appears for seniors after they have spent a certain amount on prescriptions, and must later pay more out of pocket for drugs until another spending amount has been reached.

While the hole won’t be entirely closed until 2020, the elimination of the spending limits is being incrementally reduced. The reductions started in 2012 with a 50 percent reduction on brand name drugs and 14 percent discount on generic drugs.

This change is designed to help more seniors afford their medicine, and not stop taking medications because they can’t afford to buy them.

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Prove it or pay it

Insurers will have to justify rate increases by proving they spend most of what is paid in premiums on actual healthcare.

Insurers must spend at least 80 percent of premiums paid on providing and improving health coverage, and no more than 15 to 20 percent on administration, overhead, marketing costs, and wages.

This provision in the ACA is called the 80/20 rule, and the 80 percent goal is called the medical loss ratio. If the MLR isn’t met, the insured will receive a rebate from the company for the difference.

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An Ounce of Prevention

Free preventative care will be required in some plans

Many forms of screening procedures, such as mammograms, blood pressure and diabetes checks, cholesterol tests, and colonoscopies will be covered by some plans, free of charge. Prevntative services for women and vaccines will also be covered at no cost to the insured.

Plans which won’t provide these coverages are those purchased or created before March 23, 2010. These plans have been grandfathered in, so anyone with an existing policy will need to see if their policy has been grandfathered, which could eliminate some other benefits as well.

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