Top Stories
Top Stories
CNBC Explains

8 things to know about Obamacare (that you were too afraid to ask)

Explaining Obamacare

President Barack Obama discusses the Affordable Care Act with former President Bill Clinton at the Clinton Global Initiative annual meeting in New York.
Adam Jeffery | CNBC

Obamacare, aka the Affordable Care Act, is about to kick in big-time Oct. 1, and with it new rules about getting and giving of health insurance. The idea behind the still-controversial law is to get as many people access to affordable health insurance, expand the benefits they receive, and hopefully increase their overall health while reducing the growth of health-care costs nationally.

By CNBC's Dan Mangan
Posted 25 Sept. 2013

Who needs to be covered?

Teekid | E+ | Getty Images

You (likely) need to be. Under Obamacare, by Jan. 1 nearly all Americans must have health insurance coverage through either their employer, Medicare (if they're older than 65), Medicaid (if they're poor), or through new government-run health insurance exchanges.

Insurers won't be able to deny consumers coverage because of pre-existing health conditions, put a lifetime cap on the amount of benefits paid out, or charge different premium rates depending on gender. Plus, preventive care will be covered as a rule.

What if you're younger than 26 years old? You're covered!

Oh, to be young! People younger than age 26 can get covered on their parents' insurance policies if those plans offer dependent coverage—even if they're married. And to sweeten that deal, starting in 2014, those people can stay on their parents' employer plan even if they would be able to get coverage through their own employer.

Where do I buy this mandated insurance?

Hudlemm | E+ | Getty Images

Forget the stock exchange. You need a health exchange! Fifty-one online health exchanges—in every state and the District of Columbia—will offer enrollment in insurance plans from competing insurers at different premium levels. The plans range downward from pricey platinum plans to the so-called gold, silver and bronze plans (with bronze as the cheapest) starting Oct. 1.

As a rule, the more you pay for premiums, the less you pay in deductibles and co-pays—and vice-versa. Some exchanges are being run by the states themselves, some by the federal government and others in state-federal partnership.

Is there someone to help me navigate the system?

Materials about new insurance possibilities available through the Affordable Care Act
Michael Nagle | Bloomberg | Getty Images

You bet—and, oddly enough, they're called "navigators."

Funded with grants, and often associated with community groups, these folks will educate you about the new health exchanges, and walk you through enrolling in coverage. But they won't be allowed to recommend a plan specific to you.

How much is this going to cost me?

Getty Images

Hmmm, that depends on where you live, your age, if you smoke and how individual insurers have priced their premiums in your particular exchange. But some good news: many people will get tax credits from the government to help reduce plan costs, sometimes dramatically.

Individuals making about $46,000 or less per year will get those subsidies, as will a family of four with an income of about $94,000 or less.

Can I opt-out?

Larry Washburn | Getty Images

Yep, but it will cost you—and more so over time. People who don't get insurance in 2014 will owe the government a penalty of $95 per individual, $285 per family, or 1 percent of family income, whichever is higher. By 2016, those penalties leap to $695 per person, $2,085 per family, or 2.5 percent of family income.

Is my business required to opt-in?

Dimitri Otis | Digital Vision | Getty Images

The multi-part answer is no. Yes. And not now.

Basically, companies with fewer than 50 full-time employees don't have to offer you affordable health-insurance plans. However, they CAN, if they want to, buy employee health insurance through an exchange.

Companies with more than 50 full-time workers do have to offer you affordable health-insurance plans, but not until 2015 because of a recently announced delay.

What about Medicaid?

Carmen MartA-nez BanAs | Getty Images

Another tough question. Obamacare originally was going to expand Medicaid health coverage to all poor adults in the many states where they weren't already covered. But the 2012 Supreme Court decision that upheld Obamacare effectively said it would be left up to individual states to decide whether Medicaid would be expanded.

As of now, 25 states and Washington, D.C., are moving toward expansion. Twenty-two states are not, and three are debating the idea.