Affordable Care Act (Obamacare): Now That It Is Ruled Constitutional, What Does It Mean

Here is what we know about President Obama's health care reform system in a simplified way after the U.S. Supreme Court ruled it to be constitutional. Aside from its political aspects, the court's decision was a victory for all Americans. After digesting the decision, following are the different provisions of the law affecting the citizens and others.

1. If You Are a Young Adult: If you are under 26 you will be covered under your parents insurance if hey have any. Otherwise starting 2014 you have to buy your own insurance if not covered by that of your parents, by your employer or a government program. Otherwise, you must pay penalty prescribed by the law.

2.If You Have a Low to Middle Income: Starting 2014 you will be covered by Medicaid if you earn less than 133% of the federal poverty line, presently set at $14,856.

States have right to accept or reject this new program. If your income is between 133% and 400% of the federal poverty level, presently set up at $44, 680, with no affordable employment based insurance, you will be eligible for federal subsidies helping you to get insurance.

3. If You Are an Elderly Person: If you are under Medicare, you receive free preventive care such asannual checkups. In prescription drug coverage, you may hit so-called "doughnut hole" once total costs reach $2,930 and when you spend $4,700 on drugs. Under Obama Care you may have already received deep discount on brand name drugs plus a $250 rebate from the federal government. and the "doughnut hole" will disappear over time.

4. If You Have Pre-existing Condition: Starting 2014, insurance companies will not be able to deny you coverage or ask for higher rate because of your health status and pre-existing conditions.

5.If You Are a Small Business Owner: With 25 or less employees, you are already eligible for federal tax credits helping you purchase health insurance for your employees. Starting 2014, if you have 50 or more employees without providing them with affordable insurance, you may be fined. However, depending on the laws of the state where your business is located, you may be able to buy a less expensive small group policy through an extensively regulated insurance exchange.

5. If You Are an Employee of a Large Company: Starting 2014, companies with 200 or more employees will be required to enroll you, along with all other employees in a health insurance plan. You may opt out but then you must buy your own insurance. New federal regulations under Obama Care will require the company insurance plan as well as yours to meet minimum standards.

Rules and Penalties Under the Affordable Care Act

You are exempt from penalty for not having a health insurance if you are:

a. unable to find insurance costing less than 8% of your annual income,

b. a taxpayer with low income that exempts you from filing a federal income tax return,

c. a member of religion that opposes health insurance,

d. a member of an Indian tribe,

e. an undocumented immigrant,

f. incarcerated

There is no individual penalty if you have insurance through a government program such as Medicare, Medicaid or through your employer. Otherwise, you have to purchase your own health insurance or pay penalty assessed as follows: $95 for 2014; $325 for 2015; $695 for 2016 and thereafter.

The Internal Revenue Service will enforce the law and collect the individual mandate penalties as an additional tax in your income tax return. But the Affordable Care Act prohibits the Internal Revenue Service from jailing you or seizing your property.

How the Affordable Care Act Affects You Now and in the Future


a. States have established public insurance plans to cover certain people with pre-existing conditions.

b. Some health insurance plans cover 100% of the preventive services.

c. Insurance companies are required to cover some adult siblings up to the age 26 in their parents' insurance policies.

d. Seniors with Medicare prescription drug coverage reaching the "doughnut hole" have received $250 federal rebate and deep discounts when they purchase brand-name drugs.

2014 and Thereafter:

a. Millions who purchase insurance independently will be subsidized by federal government if their annual income is between 133% and 400% of the federal poverty level amounting, in 2012, between $14,856 and $44,680.

b. Insurance companies have to price their policies as required by the mandate and sell those to anyone regardless of health status and pre-existing conditions.

c. Nearly all people will be required to have health insurance except those whose only coverage options exceed 8% of their annual income after federal subsidies and employer contributions are considered.

d. By the ruling of the U.S. Supreme Court, states, which were required under the Affordable Care Act, to expand their Medicaid programs to include all people earning less than 133% of the federal poverty line, now have the option not to comply with it.

e. Companies with 50 or more employees will be fined if they don't provide insurance benefits or offer coverage their employees can't afford.

f. To partially offset the costs of implementing the law, individuals with an annual income over $200,000 ($250,000 for couples) will pay higher taxes.

After the U.S. Supreme Court ruling the Act has become subject to extensive debate mainly between the two opposing political forces. It will continue to be so even after the presidential elections in November. The above information will qualify you as an informed citizen and a conscious participant in dealing with and evaluating the issues relating to the national health care.

Article Source: Reza Rezazadeh

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