Hey, everybody.
It's me, Ben.
And today's question is
specific to the United States.
How does the Affordable Care
Act work, and what does it do?
Although its full name
is the Patient Protection
and Affordable Care
Act, you've probably
heard it just called
the Affordable Care
Act, or Obamacare, or the ACA.
It's called Obamacare because
President Barack Obama signed
it into law on March 23, 2010.
But what does it actually do?
Let's look at the basics.
Health care in the United States
has some serious long term
issues.
First, there are millions
of uninsured people.
Second, people who
do have insurance
tend to pay more
for it than they
would in other
comparable countries.
The ACA aims to fix these issues
by making affordable health
care available to
more Americans.
I mean, that's a
good idea, right?
To do this, the act makes
some pretty big changes.
But although the act make
some big changes to insurance,
these changes phase
in over time instead
of happening all at once.
A lot of things will
also stay the same.
For example, if you already have
health insurance that you're
happy with, you can
keep it under this law.
And children under the age of 26
can stay on their parents plan.
If you already have
Medicaid coverage,
then you're going
to stay on that too.
Or you can if you wish.
In fact, many
states are expanding
Medicaid to cover more people.
So now, let's talk
about what's changing.
There are several things.
First there's this thing
called the individual mandate.
Most Americans will
be required to have
some form of health insurance.
This is a sweeping change for
a country with an estimated
30 million uninsured residents.
But how do you enforce
something like that?
By 2014, everyone
without health insurance
will need to pay a small fee.
During that year, for instance,
the fee is going to be $95 per
adult, $47.50 per child.
The maximum a family
will pay in 2014 is $285.
Now, those numbers are over the
whole year, not month by month.
To make sure that people can
find affordable insurance,
the ACA creates what are called
Health Insurance Marketplaces.
These are virtual spaces run
by the federal government,
or by your state,
where customers
can see different plans
and prices offered
by insurance providers.
So ultimately, this
might allow you
to qualify for lower
premiums, depending
on your income and
your family size.
And regardless of what
kind of insurance you have,
insurers will no longer
be able to deny or revoke
coverage for
preexisting conditions.
And women won't have to pay more
than men for insurance either.
Finally, right?
Insurance will also
cover preventative care.
So this would be
stuff like mammograms,
and checkups, and
screenings, and so on.
Then there's the 80/20 rule.
Insurers will generally be
required to spend at least 80%
of the money they
get from premiums
on-- wait for it--
actual health care.
If your insurer spends
too much on overhead,
then you're going
to receive a rebate.
Finally, the laws also require
companies to publicly justify
rate increases of over 10%.
And they are banned from
imposing lifetime dollar limits
on benefits.
This act also affects
your employer,
whether you work for a large
company or a smaller company.
A smaller business, one
with less than 50 employees,
can visit the small business
health options program,
or-- get this-- SHOP.
Right?
A government loves an acronym--
to compare and purchase
affordable health plans.
Additionally, some
of these businesses
might be eligible
for tax credits
if they get coverage
through SHOP.
The rules are a little
bit different for bigger
businesses.
In 2015, they have
to make what's
called an employer shared
responsibility payment if they
don't provide insurance meeting
a minimum value standard,
or if one of their
employees gets a better
deal in the individual
marketplace.
Since states are implementing
the act in different ways,
it's very important
for you to check
on the specific plans
of your home state.
So that's it.
If you'd like to learn more
specifics about the Affordable
Care Act, check out
www.healthcare.gov
for more information.
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