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Major Obamacare milestone one week away: What to expect

One week ahead of a major Obamacare milestone, Americans still have a number of questions and concerns about how the health care law will work.

The confusion over the law is to be expected: deliberations about the Affordable Care Act (ACA) rollout are ongoing at the state level, political grandstanding persists in Washington, and all the while, consumers are seeing a stream of television ads with competing messages about the law.

Here's a look at some basic information about the upcoming developments:

What's going to happen on Oct. 1?

Beginning on Oct. 1, Americans looking for health coverage should be able to enroll in a private insurance plan through a state-based exchange -- online marketplaces where consumers can in theory comparison shop for health coverage, "just like you would for cell phone plans or plane tickets," as President Obama said in August.

The exchanges will be different in each state. In 16 states and Washington, D.C., state officials have decided to run their own exchanges, with their own regulations. The 34 remaining states will have their exchanges run by the federal government. Depending on the regulations in the state, the insurers that decide to join the exchange, and a variety of other factors, consumers could see a range in prices and options available.

States are also opening exchanges on which small business owners can purchase coverage for their employees. Not every state, however, is ready to launch their small business exchange.

Couldn't the government shut down on Oct. 1?

The government could partially shut down on Oct. 1 if Congress doesn't pass a spending bill to fund federal operations for at least a couple more months. It's coincidental that this date happens to fall on the same date that open enrollment on the exchanges begins.

Shutting down the government won't stop the exchanges from opening. Even if Congress fails to authorize discretionary spending by Oct. 1, the government has plenty of other sources of funding to draw from to keep the exchanges running. A large portion of the law is funded with mandatory spending -- which Congress is required by law to keep up unless the law is repealed -- as well as multi-year funds still available in the event of a government shutdown.

"It appears that substantial ACA implementation might continue during a lapse in annual appropriations that resulted in a temporary government shutdown," the nonpartisan Congressional Research Service said in a July report.

What happens if Congress "defunds" Obamacare?

Members of Congress on both sides of the aisle say they want to avoid shutting down the government, but some Republicans are insisting that any government funding bill include a provision to "defund" Obamacare.

However, for the very same reasons that Obamacare implementation would continue during a government shutdown, stripping Obamacare funding from a spending bill would have little practical impact. The only way to truly take back most of the money allocated for Obamacare would be to repeal the whole law.

If the Senate were to pass the House bill that "defunds" Obamacare (Democratic leaders in the Senate have vowed they won't, and President Obama has vowed to veto the bill), it would revoke some discretionary spending for the law. However, the administration could shift around resources in order to make up for the shortfall -- a move it's already taken to fund its Obamacare priorities.

What kind of coverage are insurers offering?

Since the exchanges are designed primarily for low- and middle-income Americans who don't already have health insurance, insurers are making an effort to keep costs down. They're doing that in part by scaling down the network of hospitals and doctors included in their plans.

"Some health plans will offer limited access to large academic medical centers, which tend to treat high-risk patients, by including only select hospitals and physician groups in their exchange offerings," the Health Research Institute of PricewaterhouseCoopers said in a report released last week.

"Insurers passed over major medical centers in Chicago, Indiana, Kentucky, Los Angeles, Tennessee and elsewhere in an effort to tamp down hospital and medical costs. Doing so enables health plans to offer lower premiums. But the use of narrow networks may also lead to higher out-of-pocket expenses, especially if a patient has a complex medical problem that's being treated at a hospital that has been excluded from their health plan."

In New Hampshire, where Anthem Blue Cross and Blue Shield is the only commercial insurer on the state exchange, just 16 of the state's 26 hospitals will be included in the health plans sold through the exchange, the New York Times reports. Premiums are going to be about 25 percent lower because of the limited network, a spokesman for Anthem told the Times.

What other important Obamacare milestones are approaching?

While open enrollment marks an important step in the implementation of Obamacare, it's just one of many significant milestones.

On Jan. 1, 2014, coverage through the exchanges actually starts. Furthermore, the requirement for all Americans to obtain insurance or pay a fine to the IRS starts on that date. Also on Jan. 1, several states will expand Medicaid, a joint federal-state program, to cover all residents who fall below 138 percent of the poverty line. A number of consumer protections begin in Jan. 1, such as the rule barring insurers from turning away people with pre-existing conditions and the end of yearly limits on coverage.

On March 31, 2014, open enrollment on the exchanges closes.

In 2015, the mandate requiring employers with at least 50 full-time employees to offer their workers insurance goes into effect (a year later than originally planned).

A number of provisions of the Affordable Care Act have already gone into effect, including new preventive services for women, prescription drug discounts for seniors, and consumer protections such as the rule requiring insurers to spend at least 80 percent of the money they collect from premiums on actual health care rather than overhead.

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