5 Ways Obamacare Changed Health Insurance

Health Writer

In a procedural vote early this morning the Senate voted to start the process of dismantling the Affordable Care Act.(To clear up any possible confusion, “Obamacare” is a nickname for the ACA. You can’t repeal Obamacare and keep the Affordable Care Act because they’re the same thing.)

It has been more than six years since the law was enacted and three years since its full provisions went into effect. To help you make sense of the coming debate, here’s a quick refresher on how, exactly, this law has changed the U.S. healthcare system.

1. It required everyone to have health insurance

Pre-ACA, health insurance was optional and about 16 percent of the population didn’t have it, almost all of them under age 65. Obamacare created a so-called “individual mandate” that’s enforced via a penalty on your income tax if you don’t have health insurance. Most Americans have had no trouble with this requirement because they have continued to get health coverage the way they always did: through Medicare or an employer. But the law made major changes for the smaller number of Americans who must procure insurance on their own. Because of these changes, the uninsurance rate is at an all-time low of 8.6 percent.

2. It stopped insurers from turning away sick people

Pre-ACA, many people who tried to purchase health insurance in the individual market were turned away if they had a pre-existing condition such as diabetes, a history of cancer, or even minor, usually treatable ailments like high blood pressure or asthma.

Or, if they could buy it, they’d be charged much higher premiums or only be offered plans that excluded coverage of their medical condition. The ACA not only required insurers to take all comers, but it also stopped them from charging higher premiums for those with pre-existing conditions.

3. It helped individuals pay for health insurance

For people not in the above groups, the law set up a system of subsidies for moderate- and low-income households. These subsidies have helped households pay for their health insurance premiums and in some cases also their out-of-pocket expenses. Pre-ACA there was no such assistance available.

4. It expanded Medicaid to cover more Americans

Before Obamacare, Medicaid was only available to the very poorest disabled people, pregnant women, young children and, sometimes, their parents. Childless able-bodied adults in most states couldn’t get Medicaid even if they were completely destitute.

Now, if states so choose, the federal government gives them money to offer Medicaid to anyone with a household income of less than 138 percent of the federal poverty level ($16,934 for an individual, $30,375 for a couple). As of now, 31 states plus the District of Columbia have expanded Medicaid.

5. It got rid of skimpy insurance plans

Before the ACA, it was common for private health insurance to have annual or lifetime coverage limits that people could blow through if they had a medical catastrophe like a bone marrow transplant or a very sick premature baby. On the individual market, people often unwittingly bought plans with major coverage gaps, such as not covering outpatient doctor visits, or maternity care, or mental health care. The ACA outlawed these plans.

Now, there are no annual or lifetime limits on coverage, and all health insurance must pay for all “essential health benefits,” such as prescription drugs, preventive care, tests, inpatient and outpatient treatment, rehabilitation, and mental health care.

Editor’s Note: This is the second in a series of articles on the impact of the health-care proposals being introduced in Congress this year. You can weigh in by contacting your representative in the U.S. House or the Senate.

E-mail us with your Medicare or health insurance questions.