Thinking About Health: The coming of Obamacare and what it means for you

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Editor's note: The Rural Health News Service is funded by a grant from The Commonwealth Fund and distributed through the Nebraska Press Association Foundation, the Colorado Press Association and the South Dakota Newspaper Association.

The Affordable Care Act formally makes its debut Tuesday when its central feature, the state shopping exchanges and accompanying government subsidies to help low- and moderate-income people, opens for business.

Just how will this new act affect you? First, it’s important to understand what the Affordable Care Act is not. Contrary to what many politicians and others have claimed, it is not socialized medicine, and it is not government-run health care. It’s not even a national health insurance system like Medicare or the health systems in other countries.

Delivery of health care in the U.S. is mostly private with doctors still being paid fees for their services by insurance companies or government payers like Medicare. With the exception of a few county or municipally funded facilities, hospitals are run privately. Although they may be nominally nonprofit businesses and receive certain tax advantages, they increasingly concentrate on the bottom line. In effect, there’s not much difference between for-profit and nonprofit facilities.

At its core, the Affordable Care Act calls for improvements in existing American health insurance arrangements. That arrangement loosely can be thought of as a kind of public/private partnership with Medicare available for those 65 and older and some disabled people, Medicaid for people with very low incomes and the commercial market with for-profit and nonprofit insurance companies selling to everyone else.

The problem has been that some 50 million Americans — about 716,000 in Colorado, according to the Kaiser Family Foundation — have no coverage from any of those insurance arrangements. Because most have had no way to pay for care, they often tried to do without it and developed serious health problems as a result.

The Affordable Care Act aims to bring more of those Americans under the insurance tent primarily by making more people eligible for Medicaid and by making it easier to buy insurance in the so-called individual market. Most of those seeking insurance will shop in the new state exchanges that will offer a range of policies sold by private insurance companies regulated by the states. The federal government can try to persuade insurers to lower their rates if increases exceed 10 percent.

Even with these expansions, the Congressional Budget Office estimated that some 30 million Americans will continue to be without health insurance. Some will take the small penalty for not having insurance, some will be living in the country illegally and others are those with very low incomes in states that have chosen not to expand their Medicaid programs.

Insurers no longer can turn down people who have pre-existing medical conditions. Even very ill people will be guaranteed the right to buy health insurance. What you buy in the exchange depends on how much you can spend and your tolerance for risk — the risk of having to pay out of pocket for many of your medical needs.

The cheapest insurance, so-called bronze policies, will cover only about 60 percent of your medical bills. A silver plan will cover 70 percent, a gold plan will cover 80 percent and a platinum plan will cover 90 percent. The more coverage, the higher the premium.

The policies offered in any of these tiers are not identical, however. One company’s silver policy might offer a low deductible but charge policyholders high copayments or high coinsurance, say 20 or 50 percent of a medical bill. Another company’s plan might do the opposite — low coinsurance or copayments as a trade-off for a high deductible.

Because insurance is so expensive, some people shopping on the exchanges will be eligible for subsidies in the form of tax credits. The subsidies are highest for individuals and families with the lowest incomes, but people with incomes as much as 400 percent of the federal poverty level, or about $94,000 for a family of four, could qualify for some help.

People can sign up online or in person at one of the agencies in a state that provides help from specially trained navigators. The buying decision will not be an easy one, and buyers will need all the help they can get. My next column will explain how to find these navigators and the decisions people will have to make.

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