Is private insurance cheaper than Obamacare ?

private insurance cheaper than Obamacare

Obamacare has been a heated debate between Republicans and Democrats. On one side, it has helped many people acquire health insurance. On the other side, it led to higher taxes and insurance premiums. So what is it? and how different is it from private health insurance?

What is Obamacare?

Obamacare, also known as The Affordable Care Act (ACA for short), was signed into law in 2010 by former US President Barack Obama. This act majorly overhauled and re-shaped the United States healthcare system. It aimed to provide everyone with health insurance by offering cost assistance to those who cannot afford an insurance plan and lowering insurance costs to make it accessible for the unfortunate.

Originally, the act included a tax penalty for individuals who aren’t enrolled in an insurance plan for more than 3 months which was called the individual mandate. President Donald Trump passed a tax bill in 2017 that repelled the individual mandate and reverted the penalty.

Prior to ACA, insurance companies could reject people with a medical history and pre-existing conditions. When Obamacare became effective, insurance companies were instructed to include people regardless of their medical history. To make sure these companies can afford to add patients, ACA required everyone to have insurance for at least 9 out of 12 months in a year, or else they will be subjected to a tax penalty.

Under Obamacare, insurance companies are legally required to provide 10 services that are;

  • Preventive care
  • Maternity care
  • Emergency care
  • Outpatient care
  • Hospitalization
  • Mental health and substance abuse treatments
  • Rehabilitation treatment.
  • Pediatric care
  • Diagnostic care
  • Prescription drugs

What is private insurance?

Private health insurance is an insurance coverage provided by a private entity or company. These plans meet the minimum requirements set by the Affordable Care Act and they may offer extra benefits depending on the plan. Furthermore, private insurance doesn’t have any eligibility conditions for clients. 

Obamacare vs private insurance

When we compare Obamacare to private health insurance we can notice many things;

Cost: It is undeniable that Obamacare has made health insurance more affordable and generalized for the unfortunate and the middle class. Consequently, this led to higher taxes and public health insurance companies raising their premiums to compensate for lower deductibles. In turn, this made private health insurance the cheaper option.

Flexibility: ACA insurance plans offer ten essential services that cover the basic needs of patients. Private health insurance plans offer more benefits on top of the ACA requirements.

Availability: Obamacare plans are only available during the open enrollment period, and once it’s over you will need to wait until the next year to participate again. Private health insurance can be acquired via brokers and intermediates during any period of the year. 

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Ultimately, Obamacare covers the basic needs of the average person. Unlike private health insurance which is tailored to fit your needs for a fitting price. If you are looking for an insurance quote, a consultation is free. If you’re not sure about which plan to enroll in, our experts at the Art Of Insurance will answer all your questions and guide you to make the right decision.

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