Health Care Reform = ACA Explained in Plain English

This is a repost, with permission, of a clearly written and simple explanation of the Affordable Care Act. HT to Tim O’Reilly for tweeting about it. I’m putting the entirety up, including the update logs as the author realizes how popular his write-up was because I think it’s charming. This comes from Redditer CaspianX2. Enjoy:

Okay, explained like you’re a five year-old (well, okay, maybe a bit older), without too much oversimplification, and (hopefully) without sounding too biased:

What people call “Obamacare” is actually the Patient Protection and Affordable Care Act. However, people were calling it “Obamacare” before everyone even hammered out what it would be. It’s a term mostly used by people who don’t like the PPACA, and it’s become popularized in part because PPACA is a really long and awkward name, even when you turn it into an acronym like that.

Anyway, the PPACA made a bunch of new rules regarding health care, with the purpose of making health care more affordable for everyone. Opponents of the PPACA, on the other hand, feel that the rules it makes take away too many freedoms and force people (both individuals and businesses) to do things they shouldn’t have to.

So what does it do? Well, here is everything, in the order of when it goes into effect (because some of it happens later than other parts of it):

(Note: Page numbers listed in citations are the page numbers within the actual document, not the page numbers of the PDF file)

Already in effect:

• It allows the Food and Drug Administration to approve more generic drugs (making for more competition in the market to drive down prices) ( Citation: An entire section of the bill, called Title VII, is devoted to this, starting on page 747 )
• It increases the rebates on drugs people get through Medicare (so drugs cost less) ( Citation: Page 216, sec. 2501 )
• It establishes a non-profit group, that the government doesn’t directly control, PCORI, to study different kinds of treatments to see what works better and is the best use of money. ( Citation: Page 665, sec. 1181)
• It makes chain restaurants like McDonalds display how many calories are in all of their foods, so people can have an easier time making choices to eat healthy. ( Citation: Page 499, sec. 4205 )
• It makes a “high-risk pool” for people with pre-existing conditions. Basically, this is a way to slowly ease into getting rid of “pre-existing conditions” altogether. For now, people who already have health issues that would be considered “pre-existing conditions” can still get insurance, but at different rates than people without them. ( Citation: Page 30, sec. 1101, Page 45, sec. 2704, and Page 46, sec. 2702 )
• It forbids insurance companies from discriminating based on a disability, or because they were the victim of domestic abuse in the past (yes, insurers really did deny coverage for that) ( Citation: Page 47, sec. 2705 )
• It renews some old policies, and calls for the appointment of various positions.
• It creates a new 10% tax on indoor tanning booths. ( Citation: Page 923, sec. 5000B )
• It says that health insurance companies can no longer tell customers that they won’t get any more coverage because they have hit a “lifetime limit”. Basically, if someone has paid for health insurance, that company can’t tell that person that he’s used that insurance too much throughout his life so they won’t cover him any more. They can’t do this for lifetime spending, and they’re limited in how much they can do this for yearly spending. ( Citation: Page 14, sec. 2711 )
• Kids can continue to be covered by their parents’ health insurance until they’re 26. ( Citation: Page 15, sec. 2714 )
• No more “pre-existing conditions” for kids under the age of 19. ( Citation: Page 45, sec. 2704 and Page 57, sec. 1255 )
• Insurers have less ability to change the amount customers have to pay for their plans.
• People in a “Medicare Gap” get a rebate to make up for the extra money they would otherwise have to spend. ( Citation: Page 379, sec. 3301 )
• Insurers can’t just drop customers once they get sick. ( Citation: Page 14, sec. 2712 )
• Insurers have to tell customers what they’re spending money on. (Instead of just “administrative fee”, they have to be more specific).
• Insurers need to have an appeals process for when they turn down a claim, so customers have some manner of recourse other than a lawsuit when they’re turned down. ( Citation: Page 42, sec. 2719 )
• Anti-fraud funding is increased and new ways to stop fraud are created. ( Citation: Page 699, sec. 6402 )
• Medicare extends to smaller hospitals. ( Citation: Starting on page 344, the entire section “Part II” seems to deal with this )
• Medicare patients with chronic illnesses must be monitored more thoroughly.
• Reduces the costs for some companies that handle benefits for the elderly. ( Citation: Page 492, sec. 4202)
• A new website is made to give people insurance and health information. (I think this is it:http://www.healthcare.gov/ ). ( Citation: Page 36, sec. 1103 )
• A credit program is made that will make it easier for business to invest in new ways to treat illness by paying half the cost of the investment. (Note – this program was temporary. It already ended) ( Citation: Page 830, sec. 9023 )
• A limit is placed on just how much of a percentage of the money an insurer makes can be profit, to make sure they’re not price-gouging customers. ( Citation: Page 22, sec. 1101 )
• A limit is placed on what type of insurance accounts can be used to pay for over-the-counter drugs without a prescription. Basically, your insurer isn’t paying for the Aspirin you bought for that hangover. ( Citation: Page 800, sec. 9003 )
• Employers need to list the benefits they provided to employees on their tax forms. ( Citation: Page 800, sec. 9002 )
• Any new health plans must provide preventative care (mammograms, colonoscopies, etc.) without requiring any sort of co-pay or charge. ( Citation: Page 14, sec. 2713 )

1/1/2013

• If you make over $200,000 a year, your taxes go up a tiny bit (0.9%). Edit: To address those who take issue with the word “tiny”, a change of 0.9% is relatively tiny. Any look at how taxes have fluctuated over the years will reveal that a change of less than one percent is miniscule, especially when we’re talking about people in the top 5% of earners. ( Citation: Page 818, sec. 9015 )

1/1/2014

This is when a lot of the really big changes happen.

• No more “pre-existing conditions”. At all. People will be charged the same regardless of their medical history. ( Citation: Page 45, sec. 2704, Page 46, sec. 2701, and Page 57, sec. 1255 )
• If you can afford insurance but do not get it, you will be charged a fee. This is the “mandate” that people are talking about. Basically, it’s a trade-off for the “pre-existing conditions” bit, saying that since insurers now have to cover you regardless of what you have, you can’t just wait to buy insurance until you get sick. Otherwise no one would buy insurance until they needed it. You can opt not to get insurance, but you’ll have to pay the fee instead, unless of course you’re not buying insurance because you just can’t afford it. (Note: On 6/28/12, the Supreme Court ruled that this is Constitutional, as long as it’s considered a tax on the uninsured and not a penalty for not buying insurance… nitpicking about wording, mostly, but the long and short of it is, it looks like this is accepted by the courts) ( Citation: Page 145, sec. 5000A, and here is the actual court ruling for those who wish to read it. )

Question: What determines whether or not I can afford the mandate? Will I be forced to pay for insurance I can’t afford?

Answer: There are all kinds of checks in place to keep you from getting screwed. Kaiser actually has a webpage with a pretty good rundown on it, if you’re worried about it. You can see it here.

Okay, have we got that settled? Okay, moving on…

• Small businesses get some tax credits for two years. (It looks like this is specifically for businesses with 25 or fewer employees) ( Citation: Page 138, sec. 1421 )
• Businesses with over 50 employees must offer health insurance to full-time employees, or pay a penalty.
• Insurers now can’t do annual spending caps. Their customers can get as much health care in a given year as they need. ( Citation: Page 14, sec. 2711 )
• Limits how high of an annual deductible insurers can charge customers. ( Citation: Page 62, sec. 1302 )
• Cut some Medicare spending
• Place a $2500 limit on tax-free spending on FSAs (accounts for medical spending). Basically, people using these accounts now have to pay taxes on any money over $2500 they put into them. ( Citation: Page 801, sec. 9005 )
• Establish health insurance exchanges and rebates for the lower and middle-class, basically making it so they have an easier time getting affordable medical coverage.
• Congress and Congressional staff will only be offered the same insurance offered to people in the insurance exchanges, rather than Federal Insurance. Basically, we won’t be footing their health care bills any more than any other American citizen. ( Citation: Page 81, sec. 1312 )
• A new tax on pharmaceutical companies.
• A new tax on the purchase of medical devices.
• A new tax on insurance companies based on their market share. Basically, the more of the market they control, the more they’ll get taxed.
• The amount you can deduct from your taxes for medical expenses increases.

1/1/2015

• Doctors’ pay will be determined by the quality of their care, not how many people they treat. Edit: a_real_MD addresses questions regarding this one in far more detail and with far more expertise than I can offer in this post. If you’re looking for a more in-depth explanation of this one (as many of you are), I highly recommend you give his post a read.

1/1/2017

• If any state can come up with their own plan, one which gives citizens the same level of care at the same price as the PPACA, they can ask the Secretary of Health and Human Resources for permission to do their plan instead of the PPACA. So if they can get the same results without, say, the mandate, they can be allowed to do so. Vermont, for example, has expressed a desire to just go straight to single-payer (in simple terms, everyone is covered, and medical expenses are paid by taxpayers). ( Citation: Page 98, sec. 1332 )

2018

• All health care plans must now cover preventative care (not just the new ones).
• A new tax on “Cadillac” health care plans (more expensive plans for rich people who want fancier coverage).

2020

• The elimination of the “Medicare gap”

Aaaaand that’s it right there.

The biggest thing opponents of the bill have against it is the mandate. They claim that it forces people to buy insurance, and forcing people to buy something is unconstitutional. Personally, I take the opposite view, as it’s not telling people to buy a specific thing, just to have a specific type of thing, just like a part of the money we pay in taxes pays for the police and firemen who protect us, this would have us paying to ensure doctors can treat us for illness and injury.

Plus, as previously mentioned, it’s necessary if you’re doing away with “pre-existing conditions” because otherwise no one would get insurance until they needed to use it, which defeats the purpose of insurance.

Whew! Hope that answers the question!

Edits: Fixing typos.

Edit 2: Wow… people have a lot of questions. I’m afraid I can’t get to them now (got to go to work), but I’ll try to later.

Edit 3: Okay, I’m at work, so I can’t go really in-depth for some of the more complex questions just now, but I’ll try and address the simpler ones. Also, a few I’m seeing repeatedly:

• For those looking for a source… well, here is the text of the bill, all 974 pages of it (as it sits currently after being amended multiple times). I can’t point out page numbers just now, but they’re there if you want them.
• The website that was to be established, I think, is http://www.healthcare.gov/.
• A lot of people are concerned about the 1/1/2015 bit that says that doctors’ pay will be tied to quality, not quantity. Because so many people want to know more about this, I’ve sought out what I believe to be the pertinent sections (From Page 307, section 3007). It looks like this part alters a part of another bill, theSocial Security Act, passed a long while ago. That bill already regulates how doctors’ pay is determined. The PPACA just changes the criteria. Judging by how professionals are writing about it, it looks like this is just referring to Medicaid and Medicare. Basically, this is changing how much the government pays to doctors and medical groups, in situations where they are already responsible for pay.

Edit 4: Numerous people are pointing out I said “Medicare” when I meant “Medicaid”. Whoops. Fixed (I think).

Edit 5: Apparently I messed up the acronym (initialism?). Fixed.

Edit 6: Fixed a few more places where I mixed up terms (it was late, I was tired). Also, for everyone asking if they can post this elsewhere, feel free to.

Edit 7: Okay, I need to get to work. Thanks to everyone for the kind comments, and I hope I’ve addressed the questions most of you have (that I can actually answer). I just want to be sure to say, I’m just a guy. I’m no expert, and everything I posted here I attribute mostly to Wikipedia or the actual bill itself, with an occasional Google search to clarify stuff. I am absolutely not a difinitive source or expert. I was just trying to simplify things as best I can without dumbing them down. I’m glad that many of you found this helpful.

Edit 8: Wow, this has spread all over the internet… and I’m kinda’ embarrassed because what spread included all of my 2AM typos and mistakes. Well, it’s too late to undo my mistakes now that the floodgates have opened. I only hope that people aren’t too harsh on me for the stuff I’ve tried to go back and correct.

Edit 9: Added a few citations (easy-to-find stuff). But I gotta’ run, so the rest will have to wait.

Edit 10: Adding a few more citations (it’ll probably take me a while to get to all of them) and a few more additional entries as well.

Edit 11: Tons more citations!

Edit 12: I updated this with a reference to the recent court ruling on the mandate, and address the question everyone seems to be asking about it (“What if I can’t afford to buy insurance?”)

Inspirational Quote:

“Life expectancy would grow by leaps and bounds if green vegetables smelled as good as bacon.”–Doug Larson