There Is No Such Thing As An “Obamacare” Plan


Family 2Last Saturday I spent 4 hours trying to help a new client register for an “Obamacare” health insurance plan.

Thirty minutes of that time was spent in an attempt to help him understand that there is no such thing as an “Obamacare” plan.  All his friends have told him about the dangers of “Obamacare plans” so that he is now convinced that “Obamacare” is another word for health insurance.

I tried to explain that the term, “Obamacare” is a nickname for the Patient’s Protection and Affordable Care Act, a.k.a. the Affordable Care Act.  However, I am not certain that he ever understood that all of this hoopla over health insurance is just one aspect of “Obamacare.”

Here is the facts.  There is, officially, no such thing as “Obamacare.”  The term, “Obamacare,” started out as a pejorative used by Republican politicians.  It was adopted by Democrats in order to lessen the negative association.  Democrats prefer the term, “Affordable Care Act.”  (I can hear those on the left cheering loudly.)

However, before those on the left go hoarse from cheering, I feel compelled to mention that there is, also, officially, no such thing as the “Affordable Care Act.”

The law that both extremes are referring to is officially known as the Patient’s Protection and Affordable Care Act, or P.P.A.C.A. (pronounced P-PACK-A).

The P.P.A.C.A. is a 906 page law.  The health insurance plans that are outlined in that law are only a small part of the complete over-haul of the way that health-care is provided in the United States.

When you are wanting to talk about the new health insurance plans that are compliant with the P.P.A.C.A. you will not ask for an “Obamacare plan” or an “Affordable Care Act plan.”

It is more accurate to say that you want information about either a Metal or Essential Benefit plan.  Those terms refer to mandates that are found in the P.P.A.C.A.

METAL PLANS

The P.P.A.C.A. outlines 4 plans that are required to be offered to Americans who are required to buy health insurance in the individual market.

Those plans are to be named after 4 precious metals and must offer benefits that are with 2% of their corresponding “Actuarial Value.”

The plans and their Actuarial Values are…

  1. Platinum – 90%
  2. Gold – 80%
  3. Silver – 70%
  4. Bronze – 60%

There is a rumor that in 2015 there will be a 5th plan authorized.  The Copper plan would have a 50% Actuarial Value, but its existence for 2015 is still speculation at this time.

ESSENTIAL BENEFIT PLANS

Another way to refer to plans that comply with the rules found in the P.P.A.C.A. is to call them Essential Benefit Plans, or EBPs.

The P.P.A.C.A. grants the Secretary of Health and Human Services (HHS) the right to mandate what benefits all health insurance plans, that are compliant with the law, will have.

Although the Secretary of HHS can add benefits to plan requirements, a list of 10 “Essential Benefits” to be included were mandated by congress.

The EBPs are required to be covered by all individual and small group health insurance plans.

NON-COMPLIANT PLANS

Not all plans, that will be sold in 2014, are in compliance with the P.P.A.C.A. Many Americans are planning to protest Obamacare by foregoing the purchase of mandated health insurance plans.

Some, but not all, insurance companies will still sell Short Term health insurance policies that do not offer the same level of coverage as the Essential Benefit Plans.

However, there are two potential problems if you elect to use them.

  1. These Short Term plans are medically underwritten.  They do not cover anything for which you have had, or should have had, prior medical treatment.
  2. Although the use of Short Term plans will help you pay your medical bills, these type of plans are not compliant with the P.P.A.C.A.  They will make you liable to pay the new “Shared Responsibility Payment” penalty.

FIN

Although people will understand what you mean if you ask for an “Obamacare” or “A.C.A.” plan, technically, you should ask for either a Metal Plan or Essential Benefit Plan if you are wanting to get the type of health insurance that is mandated by the P.P.A.C.A.

However, if all you want is lower cost health insurance to pay your medical bills for the rest of the year and are willing to pay the “Shared Responsibility Payment” you may want to ask for a Short Term health insurance plan.

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