How Health Insurance Works

Even though Obamacare (the Patient Protection and Affordable Care Act, or ACA) was voted into law in 2010, there are still plenty of people confused about how it works and how the health insurance industry as a whole has been affected. Most everyone is by now aware of the fact that they must meet minimum standards for mandatory coverage or face financial penalties (which continue to increase year by year). But how has Obamacare affected insurance? Does it work differently now? If you’re one of the many still confused about your options, here’s a quick tutorial.

Obamacare is not your only option. The idea behind this piece of legislation was to provide a public option – in other words, a form of medical insurance that would be available to everyone, including underserved populations like low-income families, those with disabilities, children, and so on. In addition, it was designed to help insure previously uninsurable groups (like those with preexisting medical conditions) that were being denied coverage by private insurance companies. And Obamacare introduced mandatory minimum coverage that requires all citizens to take a measure of responsibility for their health coverage by purchasing insurance. In addition, the healthcare marketplace allowed uninsured parties to apply for coverage and take advantage of affordable policies based on need.

Medicare coverage has also expanded in some cases, and the CHIP program was strengthened to provide better coverage for children whose parents would otherwise be unable to pay for healthcare. But many Americans don’t even have to go through the healthcare marketplace. Some are eligible to receive health benefits through their place of employment, and businesses can continue to contract with private insurance providers in order to offer benefits packages to their employees. And citizens that have the money can also contact private insurance companies directly to purchase coverage.

In truth, the way health insurance works did not change for a large portion of the population. Many simply continued to enjoy the coverage offered by their current plans during and after the implementation of Obamacare. Of course, if you lose your health coverage for some reason and you find yourself looking for an alternative, you may want to consider Obamacare. In this case you will either apply for coverage through Healthcare.gov or your state health insurance exchange. Either way, the process entails filling out an application and waiting to see what types of coverage you’re eligible for and what you’ll be required to pay. Any licensed agent can help expedite this process for you.

Depending on your situation, you and your family may qualify for low-cost or even free services under Medicare, Medicaid, or CHIP. Or you might be required to pay partial or full price for your policy. Like private insurance policies, you will probably have to select options for coverage, deductible, co-pays, and more. And you’ll be required to enroll during the open enrollment period (excluding life changes like job loss, the birth of a child, etc.). But one thing is certain: you can no longer be denied health coverage due to a preexisting condition. And if you fail to meet requirements pertaining to minimum coverage, you will be fined. Other than that, there have been very few changes in how health insurance works.

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