Photo: Flickr SEIU International
President Barack Obama’s health care overhaul law has spawned its own jargon. With the law finally about to take full effect, consumers might want to get familiar with some of the terms:Affordable Care Act — The most common formal name for the health care law. Its full title is the Patient Protection and Affordable Care Act, or PPACA, pronounced (Pea-PUH-kah). Opponents still deride the law as “Obamacare,” but Obama has embraced that term, saying it shows he cares.
Employer mandate — A federal requirement that companies with 50 or more workers pay a penalty to the government if one of their workers obtains taxpayer subsidized coverage through the law. Effective Jan. 1, 2014. Intended to keep companies from “dumping” employees into public coverage.
Individual mandate — A federal requirement that virtually everyone in the United State has health insurance, either through an employer, a government program or by buying his own plan. Effective Jan. 1, 2014. Exemptions for financial hardship and religious objections. Does not apply to illegal immigrants. People who ignore the mandate will face fines from Internal Revenue Service.
Essential health benefits — Basic health benefits that most health insurance plans will have to cover starting in 2014. They include office visits, emergency services, hospitalization, rehab care, mental health and substance abuse treatment, prescriptions, lab tests, prevention, maternal and newborn care, and pediatric care.
Exchanges — Online health insurance marketplaces in each state where consumers can get private health insurance, subsidized by the government. Open enrollment starts Oct. 1, and the coverage takes effect Jan. 1, 2014. Exchanges can be run by the states, the federal government, or a state-federal partnership. Small businesses will have access to their own exchanges.
Medicaid expansion — The health care law also expands the federal-state safety-net program to cover more low-income people. Medicaid is expected to account for close to half of the 30 million uninsured people who, the Congressional Budget Office estimates, eventually will gain coverage through the law. The federal government will pay the full cost of the new coverage from 2014-2016, then phase down to 90 per cent. States are free to reject the expansion. In those states, many adults below the poverty level would remain uninsured.
Metal levels —The four levels of coverage available through exchange plans, called bronze, silver, gold, and platinum. Bronze plans feature the lowest monthly premiums, but cover only 60 per cent of average costs. Platinum plans cover 90 per cent of expected costs.
Pre-existing condition — An ongoing or past health problem. Currently insurers can use pre-existing conditions to deny or restrict coverage, or charge more. Those practices will be barred by federal law starting Jan. 1, 2014, and insurers will have to accept all applicants.
Tax credits — Government health insurance subsidies for individuals will come in the form of tax credits. The money will be paid directly to the consumer’s health plan. The subsidies are based on income. Each year, people will have to “true up” with the IRS to make sure they got the right amount. People who receive too generous a tax credit may owe money back to the government.
Tax penalty — The fine levied on individuals who disregard the individual insurance mandate. It starts small and gets bigger in subsequent years. In 2014 it’s $95 or 1 per cent of taxable income. By 2016, it’s $695 or 2.5 per cent of taxable income, whichever is greater. Thereafter it’s adjusted for inflation.
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