Obamacare’ biggest challenge may be coming this fall

National Constitution Center

The Affordable Care Act, also known as Obamacare, celebrated its third anniversary on Saturday, but the controversial law’s biggest challenge is still on the horizon.

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In the past three years, the ACA has survived a disastrous midterm election for the Democrats and a nail-biting Supreme Court decision last June, which also changed some key components of the law.

But in October, the ACA faces a daunting task, when as many as 24 million people will start to sign up for private health insurance exchanges run by the government, starting in January 2014.

The Congressional Budget Office said in February that it projects that 7 million people will enter the exchanges in 2014, with that number soaring to 24 million by 2017.

One of the key concepts behind the ACA was that states would be running the health insurances exchanges, with some help from the federal government. But in most cases, the federal government will run the exchanges until states decide to play a role in their operations.

The federal government will need to find the funds to manage the transition and organize a large operation that includes education, outreach, and complicated dealings with the insurance companies offering the policies, with all of this kicking off in six months.

Officially called The Health Insurance Marketplace, the exchanges provide a way for people without employer-sponsored insurance to get coverage and tax credits for health care.

On October 1, the government will start taking applications for coverage. The Washington Post recently obtained a draft of the application, which is 21 pages long. (There will also be a secure, online version of the application.)

The Health Insurance Marketplace is also the area where small business will try to figure out how they will insure workers, or just pay a penalty instead for not offering copaid insurance.

For now, the federal government will be running 26 of the exchanges outright and another seven in partnership with states. And in an interesting twist, President Barack Obama will be using the exchange system for part of his family’s health care, as will members of Congress.

Most of the states that passed on setting up their own exchanges are run by Republican governors.

The federal government didn’t expect to be that involved in running the exchanges when the October 2013 and January 2014 deadlines were set years ago.

Another important part of the whole health insurance exchange process is Medicaid. The Supreme Court ruling last June gave states the option to decline expanded Medicaid funds, which were tied to expanded coverage within states for lower-income citizens.

So far, 13 states have passed on taking federal money to expand Medicaid benefits. That would keep some lower-income residents from receiving Medicaid benefits, as well as hospitals from receiving Medicaid subsidies when they treat lower-income patients.

And since those low-income residents can’t get Medicaid, they could be caught in a situation where they would pay higher premiums if they buy private insurance in The Health Insurance Marketplace.

“States that do not move forward with the Medicaid expansion could see large gaps in coverage because individuals with incomes below 100 percent (of the federal poverty level) generally cannot receive subsidies to purchase coverage in the newly established health insurance exchanges and will not gain any new affordable coverage options,” said the Kaiser Family Foundation in a research paper.

The Kaiser Foundation also found that in its recent polling, most Americans are unsure about the major changes coming in October, and few know about how the changes will be handled on a state level.

About 48 percent of people acknowledge they knew nothing about their state’s plans for insurance exchanges and Medicaid, and 78 percent knew little about their governor’s stance on the Medicaid issue.

Kaiser also found that 57 percent of Americans said that they didn’t have enough information to understand how the ACA would affect them, and most importantly, more than two-thirds of people who are uninsured and in lower-income households didn’t understand the ACA.

The one thing that most people understood, at 74 percent, was the individual mandate that requires people to have insurance or pay a fine on their tax returns.

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