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The Affordable Care Act: Beyond the Rhetoric

Supporters herald the federal health-care reform as the beginning of a new era in health care. Detractors point to the program’s rocky start and unfulfilled promises as proof that it’s a failure. As of press time, the truth—and consumers—are stuck somewhere in between.

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Emily Wright now has something she hasn’t had in years—a way to seek medical treatment for a painful health problem, using the doctors she wants, without worrying about how she’ll pay for it.

The 28-year-old college senior at East Tennessee State University was one of about 7 million people who rushed to the federal government health-insurance website, healthcare.gov, when it opened Oct. 1, 2013. She signed up for health insurance. Further, because she qualifies for a federal tax subsidy, she can afford much more generous coverage than she anticipated.

Most other people weren’t as fortunate in their initial attempts to shop for health insurance, although many technical glitches had faded as of press time.

Healthcare.gov, which allows consumers to shop for health insurance, was launched as part of the first major push of the Patient Protection and Affordable Care Act, which commonly is known as the Affordable Care Act. Glitches, including crashes, incorrect information and slow processing speeds, appeared immediately. As few as 3 of 10 early visitors could create an account, according to Jeffrey Zients, who is the former acting director of White House Office of Management and Budget and who was tapped by President Barack Obama to oversee repairs to the troubled health-insurance website. (At press time, the website’s error rate was down to less than 1 percent, the government said, with the aim of having everything functioning properly by the end of November 2013.)

The Affordable Care Act seeks to regulate the quality and price of health insurance for the estimated 15 million consumers who purchase insurance on the individual market, as well as to encourage the 49 million U.S. consumers who aren’t insured to get health insurance either through the private insurance market or Medicaid. The goal is that people such as Wright, who were priced out of the insurance market or denied coverage because of pre-existing conditions, could get access to affordable medical care.

At the health-care law’s core is a requirement—the so-called individual mandate—that most consumers obtain medical insurance by Jan. 1, 2014. This mandate, which pushes people to seek coverage or face Internal Revenue Service penalties, was the price that was demanded by insurance companies in return for the law’s requirement that the companies no longer discriminate against gender or people who have a pre-existing medical condition.

The flawed launch of the federal health-insurance exchange, or exchange, which includes the marketplaces of 36 states, made it difficult for consumers to sign up for coverage in those states. Consumers who are in states that operate their own Web-based exchanges largely had an easier time of signing up. Further complicating the sign-up effort was the decision by 25 states not to expand Medicaid eligibility that was provided under the health-care law.

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Click chart above to view full presentation

These federal and state glitches make future insurance costs a still-developing picture at press time, because how many people—and who—sign up will affect the price of the premiums that all consumers are charged and the coverage that they receive.

Despite the uncertainty, 25 consumer, industry, academic and political experts with whom we spoke expect the rollout of the Affordable Care Act to continue throughout 2014, even as politicians and lobbyists seek to change or repeal the law. Further, you can expect an unrelenting drive by employers, insurers and the government to reduce their spending on health care.

“We don’t know yet how all of this is going to work,” says John Rother, who directs National Coalition on Health Care, which is a health-care advocacy. Despite the health-care law’s murkiness, here’s what you need to know as the U.S. health-care system transforms under the Affordable Care Act.

FEELING REJECTED. Startup-website woes weren’t the only fly in the health-care law’s ointment. Cancellation notices were sent for an estimated 3.5 million to 4.8 million health-insurance policies in fall 2013, despite Obama’s oft-quoted statement that people could keep their existing insurance plan. The often-missing or misunderstood qualifier that caused the uproar: If your plan was in place on March 23, 2010, and didn’t change after that, you could keep it. Otherwise, it would be canceled.

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