Has Obamacare Left You Confused?

Critics of the Affordable Care Act have been quick to point out any and all flaws of the healthcare reform championed by President Barack Obama. But a new survey has revealed a potential problem that should concern not only opponents of the legislation, but also those who believe it has the ability to transform the American health care system. This problem is a lack of information.

The health insurance exchanges — a key provision of Obamacare that is meant to reform the way Americans access and pay for healthcare — will open for enrollment on October 1. But 64 percent of all uninsured Americans are still not sure whether they will buy insurance by January 1, 2014, as mandated by the new regulations. Furthermore, many are not sure if they qualify for federal subsidies to purchase coverage on the superstore-like exchanges.

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According to a study conducted by Princeton Survey Research on behalf of InsuranceQuotes.com, only 19 percent of uninsured Americans will get coverage by the deadline, while 10 percent said they planned to stay uninsured and pay the penalty, a fine that will amount to $95 or one percent of their income in 2014, whichever is greater. Each subsequent year, the penalty increases until it hits a ceiling of $695 or 2.5 percent of income in 2016. At that time, a family would pay the maximum fine of $2,085, or 2.5 percent of household income, whichever amount is greater.

“Many people are taking a wait-and-see attitude,” Amy Bach, executive director of the insurance consumer advocacy group United Policyholders, told the survey’s organizers. “People are still in the dark about what their options are going to be – and they’re skeptical that the penalty for not buying insurance is going to be enforced, at least in the first couple of years.”

As both the raw data and Bach’s comments show, many Americans do not understand what the healthcare reform actually requires or how their access to healthcare will be affected. Especially confusing is how much coverage will actually cost. In fact, 61 percent of uninsured respondents said the main reason they had not purchased insurance was because they could not afford it.

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To make coverage more affordable for a greater number of Americans — which was the legislation’s intent — the provisions of the Affordable Care Act will make federal subsidies in the form of tax credits available to individuals and families with household incomes up to 400 percent of the federal poverty level, or $94,200 for a family of four in 2013. Those who are eligible for a subsidy will be able to claim the credit in advance, rather than having to wait to file federal taxes. These subsidies will be most often paid directly to health insurance companies and are meant to reduce the cost of premiums.

However, 58 percent of Americans, according to the survey, are unclear if they will meet the eligibility requirements. Even more concerning is the fact that the majority of respondents who expressed confusion were those most likely to get financial assistance: 68 percent of respondents making $30,000 or less per year said they did know if they would qualify for a subsidy.

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“The tax credits are really hard for people to understand,” Christine Barber, a senior policy analyst for Community Catalyst, an affordable health care advocacy organization, told the survey. Additionally, many consumers have had trouble calculating just how the credits will affect their family budgets, she added. Sixty-one percent of respondents said they believed that healthcare costs would increase as a result of the reform, a legitimate concern, according to Bach. Customers who do not qualify for subsidies, are generally healthy, and have large families will likely experience increases. “There’s definitely going to be some pain with this change,” Bach said.

But overall Obamacare should help many consumers who are currently without insurance, she concluded. “The hope is that this will be a more cost-efficient way of having a safety net under every American,” Bach noted.

Follow Meghan on Twitter @MFoley_WSCS

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