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What is “Obamacare?” Part I

Jul 05

“Obamacare” is the informal name for The Patient Protection and Affordable Care Act (PPACA), a United States federal statute signed into law by President Barack Obama on March 23, 2010. The law (along with the Health Care and Education Reconciliation Act of 2010) is the principal health care reform legislation of President Obama’s administration.

The PPACA basically requires adults not covered by insurance plans to maintain health insurance coverage or pay a penalty. The Act also affects certain aspects of the private health insurance industry and public health insurance programs, requires insurance coverage of pre-existing conditions, and seeks to extend coverage to 30 million uninsured Americans. The Obama administration projects the Act will both lower future deficits and Medicare spending.

The PPACA is a Democratic-based Act. The vast majority of Republicans are strongly opposed to the law, as you have probably seen on T.V. The Act passed the Senate on December 24, 2009 by a vote of 60–39 with all Democrats and two Independents voting ion favor of the bill and all but one Republican voting against it. It passed the House of Representatives on March 21, 2010, by a vote of 219–212, with 34 Democrats and all 178 Republicans voting against the bill.

A majority of the states (including Alabama) and numerous organizations and individuals, filed actions in federal court challenging the constitutionality of the PPACA. On June 28, 2012, in the case of National Federation of Independent Business v. Sebelius, the Supreme Court upheld the majority of the law.

The PPACA includes numerous provisions to take effect from 2010 to 2020. Some of the major things the PPACA requires including the following:

  • Insurance companies will be required to offer the same premium to all applicants of the same age and geographical location without regard to most pre-existing conditions (excluding tobacco use).
  • All persons not covered by insurance from their employer, Medicaid, Medicare or other public insurance programs, must purchase an approved private insurance policy or pay a penalty.
  • Medicaid eligibility is increased to include more people.
  • Low income persons and families not eligible for Medicaid will receive federal support to purchase insurance.
  • Minimum standards for health insurance policies are to be established and annual and lifetime coverage caps will be banned.
  • Firms employing 50 or more people not offering health insurance will have to contribute to their employees insurance in many cases.
  • Small businesses will receive federal benefits in many cases where they provide insurance for employees.
  • Co-payments, co-insurance, and deductibles are to be eliminated for health care insurance benefits considered to be part of an “essential benefits package.”

Traditionally republican states like Alabama and others, however, are opposed to the PPACA and have made is clear that they will not impose the new law. Next week we will take a look at why Alabama is opposed to this health care reform and what it means for the State to refuse to cooperate with the federal government in following the PPACA.