Obamacare, Medicare, and Health Insurance – What Are the Real Costs?

Obamacare, Medicare, and Health Insurance – What Are the Real Costs?
Obamacare, Medicare, and Health Insurance – What Are the Real Costs?

Obamacare, the unofficial term for The Patient Protection and Affordable Care Act (PPACA) or the Affordable Care Act (ACA), will soon have an effect on tens of thousands of Americans in a way it has not since its’ inception in 2010.  Like Medicare and private health insurance there will be far reaching costs that many do not yet understand.

In an industry that already has many of us scratching our heads and reeling, the drug industry, healthcare, and government bureaucracy will soon become even more complicated and costly for some.  While the aim is to increase overall affordability for health insurance coverage for Americans and to additionally decrease the costs of health care for government.  Through mandatory provisions, subsidies, and tax credits for businesses, big brother is looking out for our personal well-being.

However, many do not see the program as a win.

Leslie (not her real name) does not currently have health insurance and is concerned about what the program will do to her meager budget.  Currently, when she needs to see a doctor, she pays $70 to go to a local doctor and is able to get in the day she calls.

Obamacare, Medicare, and Health Insurance – What Are the Real Costs?
Obamacare, Medicare, and Health Insurance – What Are the Real Costs?

Each month, Leslie purchases a monthly maintenance medication for migraines at a local grocery store that has a discount program for those who have no insurance.  The medication costs $22 per month.

“So now, my migraines cost me $334 a year; $264 for the medication and $70 for my yearly visit,” Leslie ponders, “If I am forced to get insurance, it could be upwards of $100 per month, not to mention co-pays and the cost of the prescription.  How is this a benefit to me?”

Leslie also worries about the prospect of getting in to see her doctor, “If everybody is forced to get health insurance, won’t they all then be more likely to use it? For people who did not go to the doctor before, surely they will now.”

Even though she has a doctor and goes there for her monthly maintenance medication, she still self-diagnoses when she is sick.  Leslie buys antibiotics over the Internet from foreign suppliers because it is still cheaper than going to the doctor and buying them from the pharmacy.

“I understand there is a risk, but I do not have an option,” she explains, “Drug prices are so high that I cannot afford to pay hundreds of dollars for a few pills when I have an infection.  I have to take the chance… so far I have been lucky.”

The Food and Drug Administration (FDA) warns consumers against buying drugs over the Internet and offers the following advice:

  • They warn you to look out for sites allowing you to purchase without a prescription
  • Watch out for sites located outside of the United States
  • If a price appears too good to be true, beware
  • If you receive unsolicited emails from a drug company, you should probably stay away from the site

Still, Leslie says, she will continue to purchase antibiotics from the Internet; it has been an alternative to her in tough economic times.  Until January 1, 2014 when she is forced to purchase insurance or be fined, she will continue finding her own way.  She opines that she finds it interesting that her purchases come through a governmental agency, the United States Postal Service (USPS), yet United Parcel Services (UPS) was fined millions of dollars not long ago for delivering illegal prescription drugs from foreign countries.

Although some changes began in 2010, here are the top 10 things you should know about Obamacare:

1.Mandatory coverage provision – Under the PPACA, Americans will be required to have health insurance coverage by January 1, 2014.  Those who do not obtain it will be fined a premium each year.

Fines

$95 or up to 1% over the filing minimum whichever is greater, rising to a minimum of $695 for individuals and $2,085 for families, or 2.5% of income over the filing

By 2015, the fine increases to $325 or 2% of your annual income

In 2016, it will be 2.5% of income or $695

Exemptions

Religious reasons and members of health care sharing ministries, an organization that assists the sharing of health care costs between individual members who have common religious or ethical beliefs

Those who cannot afford it because the lease expensive policy would exceed 8% of their income

The theory behind the mandatory coverage provision is to discourage people from attaining insurance as soon as they find out they are ill.  Because of the new pre-existing condition provision in the law, it would be possible to go without insurance until an illness struck, the mandatory coverage provision would prevent that from happening.

Health insurance exchanges are established – For those who do not have insurance available to them through an employer or spouse, insurance will be available through a public exchange.  Internet websites will become accessible in October so participants can compare pricing.

2.Subsidies

For those who earn between 133% – 400% of the poverty level, a governmental subsidy is available

3.Medicaid eligibility expanding in some states – For those states that opt to participate, Medicaid will be increasing their eligibility to include those who earn up to 133% of the poverty limit.

June 14, 2013

As of June 14, 26 states are participating, one is leaning towards participating, six are leaning towards not participating, 13 will not participate, and four are pursuing an alternative model – according to American Health Line

4.Pre-existing conditions are a thing of the past – Insurers can no longer deny coverage based on previous illnesses, or gender.  Additionally, they cannot charge a higher rate regardless of prior medical claims for any reason.

Obamacare, Medicare, and Health Insurance – What Are the Real Costs?
Obamacare, Medicare, and Health Insurance – What Are the Real Costs?

5.No annual caps on care – No longer will insurers be allowed to place a cap on the amount of coverage you are allotted per year.  While most never hit their annual cap, one accident or significant illness can cripple a family or individual financially.  Under the PPACA, there will be no limits.

6.Flexible Spending Accounts (FSA) are limited to $2,500 – There is a limit to the tax break for FSA’s at $2,500 across the nation regardless of the cap maintained by an employer.

7.Businesses with over 50 employees must offer health insurance – All businesses who employ over 50 people must offer health insurance or they will be fined.

Fine

$2,000 per employee

8.Congress to receive the same level of care as their constituents – Members of Congress will no longer have a premium level of insurance; they will be offered a plan equitable to that of the American public.  The plan they and their staff have, the Federal Employees Health Benefits Program, will no longer be available.

9.It will take 10 years for all of the changes to take effect – While some of the biggest changes will occur January 2014, the law was not meant to happen overnight.  Some other upsets are still coming:

2015

Doctor’s pay to be determined by their quality of care, using the Medicare fee schedule

2018

Existing health insurance plans must cover preventative care and checkups without a co-payment

2019

Medicaid will be extended to cover former foster care children who are under the age of 25, for at least six months

10.Premiums must be consistent – Premiums can only vary based on region, age, family size, and tobacco use.  They cannot be based on gender, race, or any other factor.

While President Obama may have embraced the term Obamacare even though others meant it as a derogatory remark, consider what Donald Trump had to say about it, “Let me get this straight … we’re going to be ‘gifted’ with a health care plan we are forced to purchase and fined if we don’t?” (cumberlink.com)

Obamacare may have been presented as a savior to our country, but it will be a costly drain to our government between the subsidies and the loss of qualified doctors willing to work in an overburdened system.

By Dawn Cranfield

Senior Correspondent / Product Specialist

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