As of Jan. 1, 2014, the key provisions of the new health law, the Patient Protection & Affordable Care Act went into effect.
The law has already altered the current healthcare landscape and established a number of new benefits available to Americans. Under the health law, specific ramifications for consumers, state officials, employers and healthcare providers will act towards addressing the affordability, quality and accessibility of healthcare nationwide. The current process for attaining care, coverage and paying for it has also been modified – but has received criticism from insurance companies and certain sectors of the federal government.
Below are a series of FAQs for individual consumers concerned with how the new health law will affect them as of Jan 1. 2014.
Will I have to buy health insurance? What happens if I don’t?
Under the health law's Individual Mandate, all individuals are required to enroll in a health insurance plan by March 31. Those who fail to do so are subject to a tax penalty. For individual plans, that penalty begins at $95 or up to 1% of household income, and will rise to $695 or 2.5% of household income by 2016. For family plans, the penalty begins at $285 or 1% of household income and will grow to $2,085 or 2.5% of household income in 2016.
However, those individuals and families whose current plans were cancelled due to failing to meet PPACA requirements will be exempt from the penalty under an expanded Hardship Exemption. The health laws Hardship Exemption originally only allowed those who could not afford healthcare coverage to purchase “catastrophic” coverage with lower premiums and higher deductibles.
Where and how can I purchase my health insurance?
Accompanying the Health Law is the introduction of the Individual and Group Marketplaces. These are accessible via phone or online at HealthCare.gov. Consumers can shop insurance options and purchase coverage via State run or Federally run Health Insurance Exchanges. Coverage can also be purchased via paper applications, over the phone, through brokers or insurance companies directly.
Consumers can learn more about their coverage options, which plan may best suit them and other questions they have by contacting the newly introduced Healthcare Navigators program. Navigators will be positioned in communities nationwide to assist individuals with any issues they may have in signing up for coverage. There are also a variety of sites that offer educational information regarding signing up for healthcare.
If I currently get my health coverage at work, can I keep my current plan? How will the health law affect my current plan?
Individuals can keep their employee-sponsored insurance plans. However, the health law has altered a number of the regulations surrounding such plans such as adjusting the age for children covered on an employees plan to 26 and banning lifetime limits.
What are the key provisions that will take effect this year?
The new health law put a number of key provisions into place as of Jan. 1. These include:
Individual Mandate – All US individuals are required to have healthcare coverage either through Medicare & Medicaid, the Individual Health Insurance Marketplace, or through employer-sponsored plans. Failure to do so will result in penalties. Individuals who cannot afford the plans offered on the marketplace and do not qualify for Medicare or Medicaid are eligible for a Hardship Exemption and can purchase “catastrophic” coverage.
Denial of Coverage – Insurers are no longer to deny an individual or their dependents coverage based on a pre-existing medical condition.
Annual Limits – Insurers are banned from placing annual limits on medical coverage of a pre-determined set of essential health benefits, including prescription drugs and hospitalization.
Essential Health Benefits, Preventative Services & Mental Health Parity – Under the new health law, insurers are required to offer a set of 10 benefits to consumers in across all of their available plans. They must also offer preventative services such as breast cancer screenings and cholesterol tests with no out-of-pocket costs. Furthermore, the addition of the Mental Health Parity to the law requires plans to cover mental health services amongst the Essential Health Benefits.
Rescission – Insurers are also restricted from canceling your coverage prior to falling sick – unless there are legal or fraudulent issues present at the time of application.
Insurer Rebates – Insurers are required to issue rebates to consumers who have used less than 80%-85% of their premium dollars on medical care.
Grandfathered Plans – Coverage under existing plans prior to the health laws introduction are exempt from certain parts of the law, only if the plan has not significantly changed.
Will my Health Insurance be more or less expensive under the health law?
The price of Health Insurance on the state and federal exchanges will vary according to the individual. Most premium prices will be determined by age, household income, and the plans available on the exchange.
It is expected that younger people will see more expensive premiums to balance the risk pool and counter the healthcare expenses of the older and sicker individuals.
What should I do if I can’t afford health insurance?
For individuals whom can’t afford health insurance, many will be eligible to receive coverage through Medicaid. The health law expanded the eligibility requirements for Medicaid to anyone with an income at lower than 138% of the federal poverty line. However, individual states are not required to make the expansion. 25 states including DC have chosen to expand Medicaid.
What if I do not qualify for Medicaid but still can’t afford health insurance?
Individuals who are ineligible for Medicaid can still qualify for government subsidies towards private insurance offered through the Health Insurance Exchanges. For individuals who fail in the threshold of not qualifying for Medicaid or federal subsidies they will be exempt from the individual mandate.
For further information on the changes to healthcare under the new health law, the PPACA, that may affect you as an individual, please feel free to subscribe to our monthly Health Insights newsletter here. Or you can find more articles, white papers and infographics regarding the new health law by reading our blog here.