How Obamacare changes health-insurance system, Medicaid

Jan. 1 was the first effective day of the new health-insurance system created by the Patient Protection and Affordable Care Act, and Sarah Kiliff of The Washington Post took the opportunity to catalog just how sweeping the reform law is.

First, it means insurance companies have to cover every legal resident of the U.S. who wants coverage. Until the law started taking effect, “The best way to run a health-insurance plan in the individual market was
to simply exclude the people who have really expensive health
conditions,” Kliff writes. “They got left out of the market, the insurer picked up the
cheaper patients, and that was pretty much it.”

Now, insurers “won’t be allowed to charge the people who have really expensive
medical conditions a dime more than those who are perfectly healthy,” Kliff notes. However, the companies can charge smokers up to 40 percent more, can vary premiums by age, and they can choose not to offer policies in some geographic areas, as Humana Inc. has done in Kentucky.

Healthy people in the individual market must help cover the extra cost of insuring the sick, but they also have two “possible upsides,” Kliff writes. “First, insurance protects against the unexpected — if a healthy person
gets hit by a bus, that person ends up getting more than he or she paid
into their insurance plan. Second, healthy people do, at some point,
become sick people. A market structure that’s a bad deal now becomes a
better deal decades down the line.” (Read more) Kliff and the Post’s Ezra Klein write “Everything you need to know about life under Obamacare,” here.

Jan. 1 was also the first day almost 4 million Americans got covered by Medicaid, which “is being expanded and reshaped by the law to cover a wider array of people,” write the Post’s Sandhya Somashekhar and Karen Tumulty, transforming it “from a safety-net program for the most vulnerable to a broad-based one
that finds itself at the front lines of the continuing political and
ideological battle over the Affordable Care Act.” (Read more)

Phil Galewitz of Kaiser Health News lists six factors that may influence public perception of the law:
1. How many people sign up for coverage in the new insurance marketplaces, and how many of them are healthy? The latter group is key, because they will be indirectly subsidizing care for people who could not be insured previously because fo their medical conditions.
2. Will new enrollees be able to get medical care when they need it? Insurers have narrowed their provider networks to limit costs, and there is a shortage of providers in many places, including Kentucky.
3. Will the cost of health care, in the form of 2015 exchange premiums, be stable? because they enrolled too few healthy people the first year or because mechanisms to protect them from losses failed to work because they enrolled too few healthy people the first year or because mechanisms to protect them from losses failed to work,” Galewitz writes.
4. What happens to the majority of Americans who get their insurance through their jobs? Many small employers say they will drop coverage and steer employees to the exchanges.
5. Will people find their coverage valuable? They will be getting more benefits, but paying more, and some may choose to drop insurance and pay the federal penalty.
6. Will more states expand Medicaid eligibility? Unlike Kentucky, many states did not expand the program, leaving millions of people in a gap between eligibility for Medicaid and private insurance subsidies. (Read more)

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