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The Affordable Care Act or otherwise known as ObamaCare has had its time in the headlines. Many people are confused as to how it works, if they have to get it and what the penalties are if they do not participate. This article is our hope to debunk a lot of the propaganda and clear up any misunderstandings that may be out there.
1. Myth: The Majority Of Americans Want to Repeal ObamaCare
Actually, polls reveal that the majority of Americans don’t understand the actual purpose of the Affordable Care Act. The opinions of people that do understand the law tend to be split, with the majority favoring changing the law over a full-repeal or doing nothing. Since the law contains hundreds of provisions, a full support or full repeal stance usually stems from Media influence or one’s association with the President or a political party rather than research or experience. In many cases, those who say they “don’t approve of ObamaCare” show overwhelming support when polled on key provisions contained in the law.
Check out a summary of each provision in the PPACA here.
2. ObamaCare Myth: ObamaCare Creates Health Insurance
ObamaCare does not create health insurance, a government-run healthcare system, or government insurance. It regulates the health insurance industry and helps to increase the quality, affordability, and availability of private healthcare Insurance.
ObamaCare also expands and improves public health insurance choices like Medicare, Medicaid and CHIP; however, It does expand and improve Medicare, Medicaid and CHIP which are types of Government health insurance.
The law achieves this by creating new rules for insurers, improving Medicare, expanding Medicaid eligibility to tens of millions of Americans, and by implementing a Health Insurance Marketplace where Americans can buy subsidized, regulated health insurance in a competitive private market, as well as many more reforms to the health insurance and health care systems.
It greatly expands business for the private for-profit health insurance industry, creating about 12 million new customers. In other words, ObamaCare regulates the “free market,” it doesn’t replace it. It also expands and subsidizes private employer-based insurance, which lowers costs on the Health Insurance Marketplace that are also federally funded.
3. ObamaCare Myth: You Have to Use the Health Insurance Marketplace
The fact is anyone who likes their current insurance can keep it, assuming it complies with the ACA or it has a grandfathered status; no one is obligated to use the marketplace.
If you have Government-based insurance like Medicare, Medicaid, or CHIP or work-based insurance, you can keep your coverage.
The marketplace is purely for uninsured Americans and those who don’t like their current plan. Those under 400% of the Federal Poverty Level may seek aid with monthly premium costs and reduced out-of-pocket costs on insurance that is purchased via the marketplace.
NOTE: If you have access to affordable, employer-based coverage that provides at least the coverage of a “bronze” plan sold on the marketplace, you won’t be able to get cost assistance on the exchange.
4. ObamaCare Myth: The ObamaCare Website Doesn’t Work
Although we receive many letters from readers noting issues with the early stages of health insurance marketplaces, we actually get far more success stories about folks signing up. As a matter of fact, since December 20th, 2013, the number of Americans reporting issues with the site has decreased dramatically and over a million Americans enrolled in a new private insurance plan. By December of 2014, over 9 million Americans used the marketplace to enroll in a plan.
Healthcare.gov had some technical issues when it first opened, so not everyone who has signed up and enrolled has had a smooth ride. Since then, however, millions have used the site successfully and did everything to apply and enroll in a plan in less than 15 minutes.
In states that have their own exchanges set up, you can simply enroll and not worry making any further steps. If your State did not do this, give healthcare.gov a shot. You can also sign up for the marketplace by sending in an online application (read these instructions first), get in person help, or call the 24/7 helpline (800) 318-2596. You may learn more about other ways to sign up for health insurance.
ObamaCare Myth:The Website Isn’t Secure
While valid concerns for the security of the ObamaCare website have been voiced, there have been numerous scare tactics coming from opponents of the law who wish to influence people to go against using the marketplace. This strategy is intended to deter those who would get a better deal on health insurance through ObamaCare, see the law in a more favorable light, and dissuade people from using the site, which hinders the success of the program by keeping sign-ups low. We have done extensive research and can’t find any valid security concerns beyond those addressed on our Obamacare Website Update page. We urge you to ignore the rhetoric and sign up for your State’s marketplace in confidence: http://www.factcheck.org/2013/12/eric-cantors-security-scare/
5. ObamaCare Myth: I Don’t Have Insurance, So I Owe the Fee
This is more of a misconception than a myth.
The fee for not enrolling in a plan is a per month, not per year. You are allowed up to three months in a row without coverage each year due to a “coverage gap” exemption, but after that you owe a fee for each month you aren’t enrolled in a plan (unless you obtain an exemption). If you do go without coverage and aren’t exempt, it is your “individual responsibility” to pay your fee on your year end federal income taxes.
The mandate to get insurance is called the Individual Shared Responsibility Provision and the Fee is called an Individual Shared Responsibility Payment. If you don’t have insurance already, get covered during open enrollment or you won’t have many options for getting covered and avoiding the fee. Learn what to do if you missed the deadline.
6. ObamaCare Myth: You Will Go to Jail If You Don’t Pay the Fee for Not Buying Health Insurance
If you choose not to pay the fee,The only way for the IRS to collect it is for them to withhold the money you would get back from the them after filing your income tax returns. The IRS cannot enforce the Individual Shared Responsibility provision (the one that says you have to obtain health insurance or pay a fee) with the threat of jail time, liens, or any other methods of collection.
7. ObamaCare Myth: Only 67% Have Paid their Premiums / Uninsured Rate Didn’t Decrease
An April report from the energy and commerce committee showed only 67% of those who signed up for health insurance under the ACA had paid their premiums; however, this headline ignores a pretty important point: the majority of the 33% who didn’t pay had plans that hadn’t started yet. This report was done before May 1st, when a number of “unpaid plans” started. Actual current conservative estimates for how many will pay their premiums are closer to the 80-90% range, but the data we have unofficially collected appeared to make it look more in the 95% range. Assuming updated reports show that around 90% of those who purchased insurance did pay, the May Gallup Poll poll showing 13.4% uninsured rate (the lowest since Gallup began to record and down from a high 18%) is accurate.
As of the end of open enrollment a total of 15 million uninsured became insured in and around the ACA’s first open enrollment period, which takes into account everyone who lost their coverage and those who simply switched from one plan to another. Not everyone who enrolls in a health plan pays their premiums and we should all treat signups, enrollments, paying a first month premium, and maintaining a policy for a year as different things. We aren’t just analyzing those who signed up, we are looking at how many Americans have obtained and maintained their coverage. Crunching the numbers can be pretty confusing with the sheer amount of ways to obtain coverage, so under and over-estimates are expected. See our enrollment numbers section for more information.
8. ObamaCare Myth: Congress is Exempt from ObamaCare
The idea that Congress is exempt from the Affordable Care Act is a myth. Congress and their staff have work-based insurance, so they are able to stay on their current plan. However, an amendment to the bill before it became law stated that Congress must use the health insurance marketplace. They will use the marketplace, but since staffers, making as little as $30,000, can’t get subsidies through the marketplace (they have access to employer-based coverage), their employer (the Government) is allowed to a portion of the cost of their premiums. Since all members of Congress have been well aware of this since 2010, any assumption of them being exempt is a misrepresentation of the truth.
Do you have a question about the Affordable Care Act and how it impacts your situation? Contact us we will be happy to answer any questions you have.
9. ObamaCare Myth: You Can Keep Your Current Health Insurance Plan
Over the years this claim has been made: “If you like your plan you can keep it, period.” The truth is a little more complex than that.The truth is that the ACA mandates insurance companies offer minimum cost sharing and minimum benefits, and so insurers elected to drop plans instead of upgrading them in many instances. So the talking point should have been, “If you like your plan you can keep it… assuming it complies with the new higher standards and your insurer continues to offer it or upgrades it.”
Not every American was able to keep their health insurance plan moving into 2014. Assuming your insurer offers your plan and your state allows it, those with private plans that meet the requirements of the Affordable Care Act, with grandfathered plans, and public health plans may continue to keep their policies. Those who have non-grandfathered plans that don’t offer the benefits, rights, and protections the new law mandates had to choose a new plan that did by 2014. As of now, many states have pushed this back to 2015/2016. Many, but not all, plans that were/are being cancelled lacked important protections, such as the ban on imposing lifetime limits, bans against insurance companies dropping you for reasons other than fraud, and bans on refusing coverage or treatment for preexisting conditions.
In many cases, your insurer will help you make the change to an ACA-compliant health care plan. In other cases, it will be up to you to shop for a new private plan. This could result in higher or lower premiums based on your individual situation, but it will almost always result in better quality health insurance. See Benefits, Rights, and Protections to understand why getting an ACA compliant plan is a good thing.
While the law states that if a plan is changed you’ll need to choose a new plan, it does not mandate that insurers change plans with grandfathered status. Learn more about Grandfathered Plans and Keeping Your Current Health Insurance Plan.
UPDATE: In response to the controversy surrounding this myth, the President announced a plan to let insurance companies renew and reinstate plans until 2015/2016.
10. ObamaCare Myth: Obamacare Means Higher Premiums
This is one of the most widespread myths. While many Americans have seen their health insurance premiums rise since the passing of the new healthcare law, blaming ObamaCare is an over-exaggeration of the truth. The truth is insurance premiums have been growing faster than the rate of growth in income for well over a decade. Today there are more rules and regulations aimed at reducing the growth in premium rates. This isn’t to say that the Affordable Care Act hasn’t indirectly affected some premium increases.
ObamaCare stops insurance companies from raising premiums due to health status and gender or denying coverage based on pre-existing conditions. Every plan must offer more essential health benefits and preventive services at no out-of-pocket costs. In some cases, insurance companies have raised rates on existing plans in response to your new health care benefits, rights and protections but luckily, ObamaCare does a lot to mitigate this effect. Aside from the consumer protections mentioned above, ObamaCare creates a Health Insurance Exchange Pool known as the Health Insurance Marketplace. Today low-to-middle income Americans and small businesses are able to shop for subsidized, regulated health insurance from competing health care providers using their residing state’s online marketplace.
Cost assistance offered through the marketplace greatly reduces premium costs of those making less than 400% of the Federal poverty level. (400% of the Federal Poverty level equates to individuals making less than $46,021 or a family of four making less than $93,700 a year). Learn more about the Health Insurance Marketplace.
Post open enrollment data shows that the average marketplace plan costs less than $100 a month for nearly 70% of enrollees. State-by-state reports on premium growth also shows them rising slower than or equal to historic rates, hinting that, despite the new benefits, rights, and protections, the ACA is curbing the growth of premiums. With that being said, how hard the law hit or helped you has a lot to do with region as insurers broker deals on a local level and the cost of care in your region. This coupled with supply and demand and rates affects the price of your plan more than anything.