This is the first in a series of articles by Maura Carley, President and CEO of Healthcare Navigation, LLC. We’ve asked Maura to provide several posts that can help guide the readers of this site through America’s increasingly complex health-insurance maze. —Ed.
The provisions of the Affordable Care Act—that ambitious and massive piece of legislation nicknamed “Obamacare”—are set to roll out over a 10-year period, from 2010 to 2020. Some provisions are already in place, and a major chunk of the law will go into effect this coming October.
My firm, Healthcare Navigation, LLC, is already fielding questions about the fall opening of the long-promised Healthcare Exchanges, set up to make health insurance more affordable for Americans in the “individual market” (those who do not get health insurance through their employers). This seems like a good time to offer our readers a primer. This is a practical review of how Obamacare will affect you and your family, and a guide to what action you might need to take this year.
Key Provisions Already in Place
The act was signed into law on March 23, 2010, and upheld as constitutional by the Supreme Court on June 28, 2012.
Three key provisions are already in place:
- Young adults are allowed to remain on a parent’s plan until they are 26;
- Lifetime caps on key benefits like hospitalization have been removed;
- There are no out-of-pocket expenses for various preventive services.
Why All the Stories in the Press About Changes in 2014?
On October 1, 2013, health insurance exchanges, or marketplaces (marketplace is the current preferred federal terminology) are to be running in each state; they will offer insurance products to individuals at different levels of coverage (bronze, silver, gold, platinum, and a catastrophic plan) starting on January 1, 2014. To see an exchange site that’s been up and running for several years, go to www.mahealthconnector.org and explore Massachusetts’ site.
• Pre-existing conditions cannot be a factor in the granting of individual health insurance.
• Many lower-income Americans (an individual earning under $45,960, or $94,200 for a family of four) will be eligible for tax credits and premium subsidies to purchase coverage. In many states, Medicaid coverage will also be expanded. Other individuals—particularly young, healthy adults with individual coverage in states where premiums are currently based on health and age—may pay more because the coverage is more comprehensive (all policies must include maternity benefits, for example) and because of changes in the way premiums are priced.
Through the rest of 2013, individual insurance in 45 states will remain medically underwritten, meaning that when someone applies, a health questionnaire is completed and the insurer has the right to deny the application. In five states—New York, New Jersey, Maine, Massachusetts and Vermont—individual insurance is “guaranteed issue,” meaning that if an individual can prove eligibility based on residency, he/she is entitled to the insurance, and pre-existing conditions do not matter.
Almost all Americans will need to prove that they have minimum essential coverage in 2014 or pay a penalty. The initial penalty is small—$95 for an individual or 1 percent of income, whichever is greater—but penalties increase in future years.
What Do I Need to Do?
Anyone who has individual coverage (not coverage offered through an employer or union) has to review options for 2014. Only those who think they may be entitled to a tax credit or subsidy need to go through the state exchange for insurance. Others can use all the methods they have in the past—go to a broker, call insurance companies, use insurance company web sites, ehealthinsurance.com, or contact a consultant (that’s what our firm is) for advice for a fee. You should be evaluating options in October, or as soon as premium information is available, and not wait until later in the fall.
Study your options carefully, because a premium that is too low may mean a limited physician and hospital network. It’s fine to choose such a plan, but you should understand what you are buying, because after the Initial Enrollment Period ends on March 31, 2014, you will be locked in for a year to whatever choice you made, unless you have some type of event, like moving, that allows you to buy coverage off-cycle. We would recommend that you study options and apply no later than November 15 or so for coverage to be effective January 1, 2014, in order to optimize having your new insurance cards in hand.
If you have coverage through an employer or union, you are less affected by the changes taking effect in 2014. The law does require employers of 50 or more full-time employees (defined as working 30 hours per week) to offer coverage to employees and dependent children. This is an extremely significant change for some businesses that historically haven’t provided coverage, like the fast-food and retail industries. The penalties for employers not extending coverage have been delayed to 2015, so there is more to come on this matter.
If you have Medicare, the changes occurring in 2014 don’t affect you.