Top Obamacare Questions Answered

Confused about the Patient Protection and Affordable Care Act, or "Obamacare"?

You're in good company.  

In a recent Kaiser Family Foundation poll, more than half of the participants expressed a lack of knowledge about the personal impact of Obamacare.  With the program hitting full swing next year, the continued widespread confusion speaks to a massive public relations failure. There's a lot of information out there, and the majority is either biased or difficult to digest during a lunch break.

But here's a no-muss-no-fuss beginner's guide to the changes coming soon. Note that these questions pertain to those who will buy individual insurance. I'll have another guide up shortly for Medicare and Medicaid.

1. When do the health insurance exchanges start? What if my state doesn't have one?
The health insurance exchanges, or HIX, will serve as the public marketplace where people can comparison shop for private insurance. HIX open this October, but the purchased plans won't become effective until Jan. 1, 2014.

Some states agreed to run a HIX, and those will feature insurers with contracts in that state. For example, Cigna (NYSE: CI  ) bowed out of participating in Connecticut's exchange, but Aetna and UnitedHealth remain among the options.

If your state opted out of hosting a HIX or won't have its HIX ready in time, the federal government will have a HIX set up for you to purchase a plan. Click here to see where your state currently stands with its exchange.

2. How much will this insurance cost me?
The short answer is that premium costs will vary. The purpose of Obamacare is not only to offer coverage but to offer better coverage than has been widely available. If you currently pay a small premium for less-than-ideal coverage, there's a chance that your premium will go up.

Vermont recently became the first state to set new premiums, and the costs were essentially flat with what people were paying before Obamacare. But as The Washington Post's Ezra Klein explains, Vermont's state laws have required insurers to offer better than average coverage. States that have slacked in that department will have a greater chance of increased premiums.

Hard numbers aren't possible at this point. But a particularly educated guess has premiums for the uninsured dropping 14% while premiums for the already insured increasing the same percentage.

(How can the uninsured have lower premiums than nothing? The number is based on how much they would've paid if they had insurance prior to the Obamacare.)  

3. Will I receive assistance paying for my new insurance?
Federal subsidy tax credits will become available next year for people who purchase insurance through the exchanges. To receive the credit, you must not qualify for Medicare or Medicaid and should have annual income that's at or below 400% of the federal poverty level, which comes out to $43,320 for an individual.

The amount of the subsidy varies according to income.  If you're near the 400% line, your premium paid isn't to exceed 9.5% of your income, while those at only 133% of the poverty level will receive credits to keep premiums below 2% of annual income.

4. What's the penalty for opting out of insurance?
The controversial health mandate penalty -- sometimes referred to as a tax -- will be either a flat rate or percentage of household income, depending on which is larger, and will slowly build up to the full payment in 2016. At that point, the flat rate is $695 per person or 2.5% of household income.

This fine helps encourage more healthy people to join the exchanges to help offset the increased risk taken on by major insurers such as UnitedHealth.

Check here to see if your situation exempts you from the penalty and for a yearly breakdown of the costs.

5. I have a pre-existing condition. Will I go broke trying to pay my premium?
Health insurers formerly had the ability to offset risks by either denying coverage or jacking up premiums for those with pre-existing conditions. But Obamacare limits those types of behavior.

Insurers can't deny coverage or increase premiums based on pre-existing conditions. Premium adjustments can only happen based on age, tobacco use, size of family, and where you live.

Did I miss your question?
Ask away in the comment section and I'll do my best to provide you with an answer. Keep an eye on this space in the future as I'll dig deeper into Medicare, Medicaid and some of the other changes.

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Read/Post Comments (33) | Recommend This Article (3)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On April 09, 2013, at 9:30 PM, 18RC wrote:

    The Top Obamacare questions were not answered as Motley Fool could not even tell us what the premiums will cost.

  • Report this Comment On April 09, 2013, at 9:31 PM, gieck001 wrote:

    If I have insureance through my job, will the value of that insuance plan be taxable income? I have a very good plan though my emplyer.

  • Report this Comment On April 09, 2013, at 9:41 PM, ck63 wrote:

    This is clear as MUD

  • Report this Comment On April 09, 2013, at 9:51 PM, mymest wrote:

    My question to you is simple - are the requirements to purchase insurance based on gross income or adjusted gross income? I own a business with no employees - just my husband and I, our gross income is large, but after the expenses of the business our "profit" that flows through to our personal tax return is below the required minimums as outlined by Kiaser. S, which number is going to be the standard guideline by which I/We will have to use?

  • Report this Comment On April 09, 2013, at 10:22 PM, chuckcllr wrote:

    So if a guy who has never had health insurance and at age 45 gets cancer and needs $200,000 or more of health care then a health insurance company has to ensure him at the same rate as any other 45 year old? That's like not buying a warranty on your care until car breaks, It just doesn't make sense. There is no way health insurance companies can afford that.

  • Report this Comment On April 09, 2013, at 10:25 PM, jntsrgn wrote:

    The "penalty" isn't referred to as a tax. It is a tax. John Roberts said it is only Constitutional as a tax. That was the whole point of the ruling.

    However, there is NO TAXING AUTHORITY in the legislation. Therefore, no one must pay anything as a result of not having insurance.

    Not only is there no authority, but the legislation specifically spells out that the IRS can NOT take any action other than a with-hold of refund. Simply underpay your taxes by a little each year and Obamacare can do nothing to you.

    Ha ha ha ha ha.

  • Report this Comment On April 09, 2013, at 10:29 PM, jntsrgn wrote:

    After my comment above, I do have a question. Does the author of this article understand Obamacare? It seems the answer is "no". Please inform yourself prior to attempting to inform others.

  • Report this Comment On April 09, 2013, at 11:15 PM, mperiod wrote:

    @mymest

    It's based off adjusted gross income

  • Report this Comment On April 09, 2013, at 11:21 PM, mymest wrote:

    @mperiod

    Thank you!

  • Report this Comment On April 10, 2013, at 12:16 AM, sdchanman wrote:

    I have no use for Barack Obama. I don’t need a President with a history of drug abuse who puts the dreams of his father above the interests of the United States. Obama’s presidency is like a giant sinkhole, swallowing up everything we ever valued as Americans.

    It’s almost an insult to our intelligence, to ask us to believe that Obama is a US citizen. He has a schizophrenic timeline of unexplained foreign travel, a list of aliases, and uncomfortable friendships with communists and hostile governments.

    We can drop this debate over his birth certificate because we have something even more valuable. We have his mother’s passport files.

    Stanley Ann Dunham’s passport files were obtained through the Freedom of Information Act and then posted online. (Strunk v. US Department of State)

    When Obama was young, children traveled as an addition to their parents’ passports.

    Passport regulations required a photo of parent and child together, as well as a certified copy of a hospital birth certificate. State-issued IDs came much later.

  • Report this Comment On April 10, 2013, at 1:16 AM, chrism1975 wrote:

    You missed the #1 question ... how in the hell did this piece of crap ever get passed ?

  • Report this Comment On April 10, 2013, at 2:27 AM, QuickDraw53 wrote:

    all of this is great, but you need to tell people the negative things that is coming from obama care. like the very high premiums, more taxes and all the hidden taxes we will be paying for when all the dr's equipment is taxed. i am sure there is plenty more then these

  • Report this Comment On April 10, 2013, at 2:54 AM, therylmccoy wrote:

    I am self employed and my application for individual coverage was denied because of a knee sprain 5 years ago. The doctor only looked and the xray and advised. The knee healed on its own in 4 weeks. 5 years later I now have a "preexisting condition"

    It's really too bad that we need to pass a law to tell the insurance companies to go to hell and start actually insuring people.

  • Report this Comment On April 10, 2013, at 2:58 AM, markchr79 wrote:

    #2 is sounds like a great idea. Only someone in congress who was born with a silver spoon in their ass could have thought of that. Not sure how much longer the other 50% of us can put up with this. The uninsured are the reason the premiums are so high in the first place.

    I know that I only go to the doc when I absolutely have to because insurance doesn't even kick in until I meet the $3K family deductible. Maybe they should look into making some of their voting base at least pay $5 a visit.

    Sooo, I guess my question is... Is this really happening.

  • Report this Comment On April 10, 2013, at 7:38 AM, hdkd9303 wrote:

    "Hard numbers aren't possible at this point. But a particularly educated guess has premiums for the uninsured dropping 14% while premiums for the already insured increasing the same percentage."

    How do premiums drop for the uninsured? they don't pay a premium, that's why they're uninsured. This is a total guess.

    My company just received our quote for a June to June renewal... increase was 26%.

    This is a cost to the working and a gift to the nonworking.

  • Report this Comment On April 10, 2013, at 7:58 AM, ibasob wrote:

    The president made many promises before the federal health reform bill became law. He said, "If you like your plan, you can keep it." He said the cost of a family insurance policy would drop by $2,500 in his first term. He said everyone would be covered. In short, he said, "Fear not."But reality has arrived. Family premiums have increased by $3,065 over the past four years. Experts say more sticker shock is coming this summer when insurers release their Obamacare-priced premiums. This could be as early as July. By 2014, many American families will know the president's promises were nothing but more political hot air. liberals scoffed at Paul Ryan's declaration that Obamacare will ultimately destroy the existing American health-care system. Apparently you haven't been paying attention.

  • Report this Comment On April 10, 2013, at 8:21 AM, Icthelite wrote:

    HUH?! "premiums for the uninsured dropping 14% while premiums for the already insured increasing the same percentage."

    How can the cost of something drop for someone that's not buying it to begin with?

  • Report this Comment On April 10, 2013, at 9:03 AM, Romans8v28 wrote:

    sdchanman,

    I hope people listen to what you wrote here. Unfortunately, too many do not understand that, when the liberal media claim that the whole "birther" thing is nonsense, they are only doing so as a propoganda arm of the Democrat Party. We live in a country where the liberal media are much like the media were in Germany in Hitler's day. They propogandize, tirelessly trying to convince people of lies. George Soros, the second biggest supporter of Obama financially (a Saudi guy who paid his way through college is first) has some 180 media outlets that he has established or controls through his billions of $. Those outlets echo the same lies again and again, and too many believe something because they hear it from so many sources. If we do not wake up in America and throw out Obama and his types (communists, socialists, radicals), we will lose every freedom that we have. Obamacare is just that, taking away our freedoms.

  • Report this Comment On April 10, 2013, at 9:04 AM, Romans8v28 wrote:

    ibasob,

    I couldn't agree more.Obamacare is all about control and about ruining our healthcare system. Obama is absolutely obsessed with bringing America down from within. And he is succeeding.

  • Report this Comment On April 10, 2013, at 9:07 AM, Romans8v28 wrote:

    “2. How much will this insurance cost me?

    The short answer is that premium costs will vary”

    No, the short answer is “a whole lot more than you have been paying.” There is no logical way you can expand the number of persons covered dramatically, increase coverage dramatically, and not raise costs dramatically.

    Of course, one way they will hold costs down some is something the writer failed to address: so-called death panels. Yes, they exist in the law. When you are a certain age and the needed care will be more expensive than their cut-off limit, you will simply not get the treatment.

  • Report this Comment On April 10, 2013, at 9:09 AM, Romans8v28 wrote:

    “3. Will I receive assistance paying for my new insurance?

    Federal subsidy tax credits will become available next year for people who purchase insurance through the exchanges.”

    Now, use a little reasoning here. The number of persons covered is expanded. The coverage is expanded. And the government will subsidize the higher premium costs. Can you translate that, of do you need help? Subsidize = higher taxes for us all. In other words, YOU and I will be paying for the coverage for those who do not pay themselves. Now, your coverage will go up, your taxes will go up, and your healthcare will go down. Wow. What a nice situation Obama has pushed on us.

  • Report this Comment On April 10, 2013, at 9:14 AM, Romans8v28 wrote:

    “5. I have a pre-existing condition. Will I go broke trying to pay my premium?

    Health insurers formerly had the ability to offset risks by either denying coverage or jacking up premiums for those with pre-existing conditions. But Obamacare limits those types of behavior.”

    Much like telling a car insurance company that they have to cover you AFTER you wreck the car. How can any insurance company stay in business when the persons they cover ALREADY have medical conditions, yet the company has to charge them the same as a healthy person and give them the same treatment? The answer is that they cannot stay in business. That is one purpose of Obamacare, to force the insurance industry out of business, leaving us with no option but to depend on Uncle Obama for our insurance. And we all know that Uncle Obama only wants to control us. Well, liberals, you voted for this monster. Now you will get to see what a monster does when he has almost unlimited power.

  • Report this Comment On April 10, 2013, at 9:40 AM, Montgomeryevam wrote:

    I calculate Obamacare is going to cost me an additional $15,000/year just to get an insurance plan that's not even as good as my current one. How? I'm on my husbands plan which is subsidized by his employer. Under Obamacare, the worker has to be covered and will have his insurance subsidized But spouses are not required to be covered. With increasing premiums, companies are going to kick spouses off the policy or at the very least stop subsidizing. To buy insurance for myself through one of these exchanges (I tested it using the Massachusetts online exchange), is going to cost me and my kids $1200/mo and that's for the Silver plan which is not even close to our current plan. Now I'll have to deal with two insurances, two deductibles, two networks to operate in, etc. Face it. Obama lied to the American people. This program is going to cost the middle class not save us money.

  • Report this Comment On April 10, 2013, at 10:32 AM, japohl wrote:

    The fool.com is trying to answer some questions but there are still a LOT of open questions out there. Most experts do not think that the Health Exchanges will be operational by Oct 1 or will be so error prone as to cause even more problems.

    Then there all the questions from the employer side. I read on http://obamacareaca.com/obamacare/top-5-common-affordable-ca... that small business owners may be subject to additional taxes in 2015 that have implications on benefits for employees. SO WATCH YOUR BENEFIT PLAN!!!

  • Report this Comment On April 10, 2013, at 12:58 PM, Baylor2013 wrote:

    I read the comments with some interest and disgust. First I am a Democrat (Moderate). I don’t believe in hand outs to those that should work for their needs unless your disable or old. This includes all that is on Disability, food stamps, oil companies, & the rich tax breaks or some other federal programs just for the hell of it.

    However, reading some of the above comments tells a lot about those that post them. Now research the facts before responding to the editor's article, Stop looking at fox (Faux) news for facts, Forget about Obama's birth certificate for he has been elected for the second time, Contact your elected leaders and ask them to work with both parties to make this economy / country better. Now saying all of this may I say neither George Bush nor his daddy was a saint. There was this lie about weapons of Mass destruction that has not been found, Chaney's Hunting Trip Mishap that is still a mystery, and George Bush Sr No New Tax &%@*.

    What I am saying is we have a country that's in the worst recession in modern time, Gun's, Knives violence at its worst, Texas Judicial sniper shootings, etc, etc and all some are concerned about is holding down a President that has been elected twice by the majority (Not Romney not needing the 47%) and the Supreme Court Confirmed Health Care Plan. Hell Get a life and Grow the F UP!!!!!!!!

  • Report this Comment On April 10, 2013, at 2:33 PM, lenglish2 wrote:

    @Baylor2013 - Thank you.

  • Report this Comment On April 10, 2013, at 3:46 PM, Montgomeryevam wrote:

    @Baylor2013 Have you looked into Obamacare and understand what it's going to cost you? I've been to seminars with insurance experts and lawyers. I've read the Obamacare Survival Guide, I've been reading various other analyses, I've looked at the Massachusetts health insurance exchange. This law is going to be very expensive. Investigate your own situation and see how much better/worse you're going to fare. I know for one I am getting a bum deal. I'll be paying more for a crappier insurance. All I can do is laugh about it because nobody cares about the people who are actually paying their own way.

  • Report this Comment On April 11, 2013, at 8:58 AM, DonkeyJunk wrote:

    "The Obamacare Survival Guide"

    That doesn't sound partisan and fear-inducing at all.

  • Report this Comment On April 11, 2013, at 7:04 PM, Montgomeryevam wrote:

    @DonkeyJunk. I agree the name sounds suspect but it was recommended by an industry expert who was talking to a group of association executives. These people tend to be very liberal. I read the reviews on Amazon and decided to drop some coin to purchase. It's a good start. What have YOU done to actually investigate the details of Obamacare and how it will effect you?

  • Report this Comment On June 14, 2013, at 4:04 PM, poori828 wrote:

    I called BC/BS in Florida, and they said that adults over 65 are not Eligible to buy healthcare under obamacare. If they are not Medicare eligible (new greencard holders, legal residents) do they get no insurance? Can that be right?

  • Report this Comment On October 22, 2013, at 5:45 PM, ChMills wrote:

    I have a question...I have not had a job in over 4 years and no income coming in...I just moved out of Ga to Florida. My question is with no income and per-existing health issues how do I pay for insurance....I am looking for a job one of the reasons for the move..I have no husband and I am the only one in my family.....What do I do to be legal....

  • Report this Comment On October 22, 2013, at 5:49 PM, ChMills wrote:

    I did call a number and found that with pre existing issues (if I had the fund to pay for it) could cost me about $168.00 (for the best policy) a month....but with no income and no way to pay for this what do I do....

  • Report this Comment On November 15, 2013, at 9:50 PM, rthays51 wrote:

    If a person is say 62 years old does the max. of 9.5% of income premium still hold if your below say 300% poverty ?

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