Obamacare Primer: What Happens on Jan. 1

ABC News(WASHINGTON) — After three years of preparation, and three tumultuous months of technical glitches and high-profile hiccups, Obamacare takes full effect nationwide in less than 24 hours.

Jan. 1, 2014, is less a deadline than a major milestone for the Affordable Care Act — a moment when millions of Americans will see new health care coverage take effect, with some getting private insurance or a government-sponsored plan for the first time.

For those already insured, 2014 means new consumer protections and benefits mandated under the law will apply to their health plans, too, including preventive care services at no additional charge and an end to discrimination based on pre-existing conditions.

While most doctors’ offices will be closed on New Year’s Day, coverage for those who signed up by the Dec. 24 deadline should be in place.  But with plenty of caveats and open questions on the enrollment process, the real test could come on Jan. 2, when more Americans are expected to seek routine care.

Will everyone who sought coverage have it?  Do those who think they’re signed up actually have a registered policy?  And, how well will health insurance novices understand the terms (e.g. the painfully high deductibles) that come with their new plans?

For now, many who have successfully signed up tell ABC News they’re simply grateful for the peace of mind, and plan to schedule preventive care in the weeks ahead.  Others are still waiting anxiously for confirmation that their new coverage has come through.

Meanwhile, the push to sign people up continues.  The administration fell short of its 3.3 million sign-ups projection by Dec. 31.  The next enrollment deadline is Jan. 15 for coverage to take effect on Feb. 1. 

Here’s a look at the top five Obamacare milestones for New Years Day and the top five Obamacare trouble spots to watch after Jan. 1:  

Top Five Obamacare Milestones for New Year’s Day:

1. MILLIONS MORE AMERICANS ARE COVERED

Individual Obamacare plans sold on the state and federal insurance exchanges take effect.  The Department of Health and Human Services estimates 1.1 million people across 36 states selected a plan on HealthCare.gov through Dec. 24.  Combined with preliminary data from the 14 states running their own exchanges, ABC News can report close to two million have signed up for plans effective Jan 1.  

Premium subsidies kick-in for consumers in 2014.  Kaiser estimates 17 million Americans are eligible for a tax credit to buy private insurance.  Anyone earning less than four times the Federal Poverty Level can benefit — that’s $46,000 for an individual or $94,000 for a family of four.

Medicaid is expanded in 25 states plus D.C. to cover more low-income families.  People earning up to 138 percent of the Federal Poverty Level can now qualify.  That means an individual earning less than $15,856 and families making less than $26,951 are eligible.  Nearly four million Americans have been determined eligible for Medicaid by the states since the Obamacare exchanges launched in October.

2. BAN ON DISCRIMINATION OVER ‘PRE-EXISTING CONDITIONS’ 

Health insurance companies can no longer deny coverage to anyone, including Americans with pre-existing health conditions.  They are also prohibited from charging more of people with certain conditions.  Insurers are only allowed to vary their premiums based on age, geography, family makeup and tobacco use, and even that variation is limited.

3. END TO LIFETIME CAPS ON COVERAGE

Insurers can no longer put a cap on the dollar amount they pay out for a policy over an individual’s lifetime.

4. ALL PLANS COVER ‘ESSENTIAL HEALTH BENEFITS’ AND PREVENTIVE CARE

Every health insurance plan sold in the U.S. must now cover the “essentials,” including doctor’s visits, ER visits, maternity, mental health, prescription drugs, physical rehab, and routine lab work, among a few others.  Designated preventive care services — like annual physical and immunizations — must be provided at no additional cost or co-pay to the consumer.

5. INDIVIDUAL MANDATE TECHNICALLY LIVE

The controversial requirement that every U.S. citizen have health insurance coverage technically takes effect on Jan. 1, but won’t be enforced for another three months.  The ACA allows for “short coverage gaps” of up to three months, which the administration says gives Americans until March 31 to enroll in a plan.  Enforcement of the mandate will begin on April 1.  Anyone who has not enrolled in a plan by that date faces a fine of $95 or 1 percent of an individual’s income (whichever is greater) on his or her 2014 taxes.

Top Five Obamacare Trouble Spots to Watch After Jan. 1:

1. PAYMENT FOR COVERAGE

A key caveat to all the talk of new private insurance coverage for millions of Americans is that it must be paid for.  Insurers typically don’t consider someone enrolled, much less offer benefits, unless and until the first month’s premium has been received.  We do not yet know how many of the roughly two million Americans who signed up for Obamacare plans have actually paid for them, and we won’t get any better sense until later this month at the earliest.  In most states, consumers have until Jan. 10 to make the first payment with coverage retroactive to Jan. 1. 

2. STICKER SHOCK

Many people who have signed up under Obamacare are new to health insurance and all the wonky, bureaucratic legalese that comes with it.  A recent Kaiser poll found more than half of Americans lacked an understanding of many key terms, like premium, deductible, co-pay, etc.  The dynamic means many people who enrolled in the marketplaces’ low-premium, high-deductible plans may be surprised how much out of pocket they have to pay before any benefits kick in.  Already, some consumers are venting some anger at confusion over the true cost.

3. KEEP YOUR DOCTOR?

Industry analysts say the new law is causing a quiet shake-up of which doctors and prescription drugs are covered by which plans.  All Americans should not assume their old, preferred providers are covered under their new — or newly updated — health plans.  It’s important to check first before seeking care to avoid added costs, they note.  This process of discovery has already led to some surprises, disappointment and frustration when consumers enrolling in Obamacare plans find that their old doctors and prescription drugs of choice may no longer be covered.

4. HEALTH PLANS M.I.A.

As ABC News has reported, there is a small universe of people who have signed up for a plan by the Dec. 24 deadline only to find later that their insurer has no record of the transaction.  Were these cases resolved in time to avoid a gap in coverage?  Or, will some Americans show up at the doctor thinking they’re covered but they’re not?  The Obama administration has estimated that “fewer than 15,000” completed applications never made it to the selected insurer because of technical glitches on the back end of the website.  Whether or not those Americans had their coverage successfully processed remains unclear.

5. THE STYMIED ARE STILL STUCK

Though deadlines were extended, and the website’s problems were largely resolved, many Americans still reported trouble finalizing their enrollment in late December.  The process has been doubly frustrating for the millions who saw their existing plans cancelled in October and November because they didn’t comply with guidelines in the ACA.  The exact numbers are not known, but it’s likely that many of those with cancelled plans simply selected an alternative with their present insurer or found one through the marketplace, analysts and administration officials say.  Still, as recently as a week ago, the Obama administration estimated 50,000 couldn’t find a suitable alternative.

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