How ACA “ObamaCare” Exchanges Work: A Nick Animation

I made the above animated vignette to explain how the health insurance exchanges being established under the Affordable Care Act (ACA), online marketplaces for “shopping” for health insurance, roughly, will work. People will begin signing up for health insurance plans on the exchanges October 1st, and those plans will go into effect Jan 1st, 2014. And any credible fact check will tell you, as this one from the Associated Press does, that the tax credits that fuel the exchanges, that subsidy that will make the now-$20,000-a-year bronze plan cost $5,000 for a family of four in one IRS estimate, will be delivered directly to your insurer. You won’t catch a glance of your tax subsidy.

The insurance companies are raising prices through the roof, not only because they’re required to cover much more in terms of minimum health care services, but because they know the government will pay and pay and pay. Thus, sticker shock will put anything but the new-legal-minimum bronze plans out of reach for the vast majority of participants. Pouring cash by the dump truck onto insurance companies is emblematic of our “only in America” health care non-system, and a primary cause of its deterioration.

The dump truck-full of unimaginable, astronomical sums of money won’t come from the sky like in my cartoon, it will come from the IRS. The IRS will be in charge of doling out the tax subsidies, and extracting the fines from those who don’t comply with the individual mandate to buy health insurance. I gave a thorough overview of the individual mandate and subsidized insurance exchanges recently: What Is ObamaCare? 2013-2014: Overview Part 1.