When most people ask, "When does Obamacare start?" they're referring to the mandate that everyone must get health insurance or pay a tax. However, the Patient Protection and Affordable Care Act is so complex that different portions start at different times. Find out what's happening now, what's coming up next, and what's already started.
January 1, 2014 - Health insurance coverage bought through the exchanges begins.All plans will offer services in each of the 10 essential health benefits, as well as offer all other Obamacare benefits.
Plans are in four different categories, arranged by how much they cost you versus how much coverage they provide. Bronze plans only pay 60% of your total health care costs, bu have the lowest monthly premiums. Plans in the other three categories have higher premiums, but cover more costs: Silver plans cover 70%, Gold plans cover 80%, and Platinum plans cover 90% of costs. Find out How Much Will Obamacare Cost Me?
Insurance companies can no longer deny coverage to anyone with pre-existing conditions. Small businesses will receive tax credits to cover up to 50% of their total employee premium payments.
March 31, 2014 - Open enrollment for health insurance closes. If you haven't signed up for insurance by now, you will be assessed an income tax that's roughly 1% of your Adjusted Gross Income (AGI). The minimum tax you can pay is $95 per adult and $47.50 per child, capped at $285 per household. However, most families will qualify for free health insurance under Medicaid before they have to worry about paying the minimum tax. The tax can't be more than the cost of purchasing the "bronze" health insurance plan on the exchanges. For details, see Obamacare Taxes.
2015 - The tax on people without insurance rises to 2% of AGI. The open enrollment period shortens, running only from October 7 - December 31 2014.
Small business owners with 100 or more workers must pay $2,000 per worker (except for the first 30) if they don't provide insurance, or if employees can find a lower-cost plan with the same benefits on the exchange. They may waive the fines if they provide insurance to 70% of all full-time employees. Companies will receive a tax credit of 50% of the cost of providing insurance. For more, see How Does Obamacare Work? (Source: HHS, What Is the Employer Shared Responsibility? and SHOP Marketplace)
2016 - The tax on those without insurance rises to 2.5% of AGI. Businesses with 50-99 employees must provide insurance or pay a fine, as above.
2018 - Businesses must pay a 40% excise tax on "Cadillac" health insurance plans. These are plans that offer specialized coverage, and their premiums are $10,200 (individuals) or $27,500 (families) or more. They offer super-low copayments, or provide unusual benefits, such as marriage counseling. Businesses also offer Cadillac plans if most of their employees are older, live in an area with expensive health costs, or have dangerous jobs.(Source: Kaiser, Cadillac Tax Explained, March 18, 2010)
2020 - The Medicare "donut hole" is eliminated.
Obamacare Changes That Already Began
March 23, 2010 - President Obama signed the Affordable Care Act. Here's what immediately went into effect.
- Small businesses received a tax credits of 35% of their premium payments for workers. For details, see the IRS Small Business Tax Credit.
- Indoor tanning services must pay a 10% excise tax.
- Businesses that provided early retirees (age 55 - 64) with health insurance were reimbursed until December 31, 2011. (Source: ERRP)
- Those who had to pay part of the gap in Medicare Part D Prescription Drug coverage (the "donut hole") received a $250 rebate.
- Parents can keep their children on their insurance until age 26.
- Insurance companies could no longer drop people when they got sick, create lifetime coverage limits, or deny coverage to children with pre-existing conditions. They were required to cover 100% of preventive services.
June 17, 2010 - Federal regulations exempted health plans that were in existence on March 23, 2010 from the Affordable Care Act.
2011 - These additional benefits started in 2011:
- Medicare paid 100% of the costs of preventive services, and negotiated a 50% discount on brand name drugs.
- Insurance companies had to prove they spent at least 80% of premium payments on medical services or send rebates to policyholders. They had to submit justification to Federally-funded state boards for all rate hikes
- Federal funds increased the number of doctors, nurses, and community health centers.
June 28, 2012 - The Supreme Court ruled that Obamacare was legal. For more, see Obamacare Ruling
January 1, 2013 - Individual taxpayers could only deduct medical expenses that were at least 10% of income. It was 7.5% before. If their income was $200,000 or more ($250,000 for families), they paid a 2.35% income tax on earnings above the threshold. They also paid a 3.8% tax on the lesser of (a)dividends, capital gains, rent and royalties or (b)income above the threshold.
Medicaid paid 100% of preventive services, and CHIP was extended two years. States received Federal funds for this. Medicare launched a pilot program to help hospitals bundle services before submitting them for payment. Medicare also paid 100% of primary care physicians' fees.
October 1, 2013 - Open enrollment for Obamacare became available on the health insurance exchanges. Any individual, family or business (with fewer than 50 employees) can begin comparing plans. Source: Healthcare.gov) Article updated February 11, 2014
More on Obamacare
- How Will Obamacare Affect Me?
- Obamacare Explained - Simple Enough to Explain to Your Kids
- Obamacare Summary
- What's in the Obamacare Bill?
- Why Health Care Needed to Be Reformed
- The 2012 Supreme Court Ruling on Obamacare
- Repeal Obamacare?
- The True Cost of Obamacare to the Nation
- Obama's Health Care Campaign Promises