August 26, 2013

Obamacare: Are you covered?

When the Affordable Care Act takes effect in January 2014, most people must have health insurance or face a fine for noncompliance. The roughly 260 million Americans with job-based, individual or government coverage probably have nothing to worry about. But if you’re unsure we’ve prepared a guide to bring you up to speed.

On Oct. 1, Americans can begin enrolling for health coverage in 2014 through the new state insurance marketplaces. The Affordable Care Act takes effect three months later, in January. That’s when most people must have health insurance or face a fine for noncompliance. Most of the roughly 260 million Americans with job-based, individual or government coverage probably have nothing to worry about. But if you’re unsure — or among the nearly 49 million uninsured Americans — we’ve prepared a guide to bring you up to speed.

Individual mandate
Medicaid expansion
Insurance marketplaces
Changes to insurance

Do I have to buy coverage?

Are you exempt from the individual mandate?

Certain groups are exempt from the Affordable Care Act's mandate that all individuals have health insurance of some sort.

Select any of the following groups that apply to you. If you belong to one or more of these, you are most likely exempt from having to purchase health insurance and will not face any penalties.

You are probably exempt from the individual mandate

While you probably do not have to purchase health insurance, you can still learn about the impact the Affordable Care Act will have by reading more below.

Are you already covered?

If you currently have health coverage, it may already fullfil the mandate. If so, simply keeping your coverage means you won't face penalties.

You can read more about how buying coverage on your own will change with marketplaces or about changes to insurance below. Select any of the types of health care coverage you may already have:

It sounds like you are already covered

It sounds like you already have health coverage which meets the requirements of the ACA. If you keep your current coverage, you're most likely already prepared for Obamacare.

You can read more below to learn how you might be eligible for tax credits and how the insurance you already have might change when the ACA goes into effect in January.

You probably need to find coverage

Because the individual mandate applies to you and you do not currently have qualifying health care, you will need to find insurance.

Read more about what the individual mandate means, how Medicaid is expanding and how you will be able to buy insurance from health exchanges.

Medicaid recipients won't see much change

The biggest change to Medicaid will be its expansion in states that choose to increase their eligibility for the program.

Those already on Medicaid won't see much of a change to their coverage.

You can read more about the expansion, or other changes coming under the ACA, below.

Individual mandate

Beginning in 2014, the Affordable Care Act requires most individuals and their dependents to have health insurance or pay a penalty. Although a key factor in reducing the number of uninsured Americans, the mandate is the most unpopular part of the law. But it’s necessary to make the law’s insurance market reforms work properly. The ACA bars insurers in the individual and smallgroup markets from denying coverage to people with pre-existing health problems, charging higher premiums based on their health and placing annual and lifetime limits on covered benefits.

Without the individual mandate, these new consumer protections would cause sharper premium hikes because they would encourage older, sicker people to get coverage, while healthy people would wait until they get sick to buy insurance. The mandate is designed to discourage this behavior and promote a mix of healthy and lesshealthy people to enroll for coverage.

That diversity of new enrollees is designed to help keep premium costs in check.

Help for the uninsured

In states that participate, more people will be covered by Medicaid, the state/federal health insurance for the poor and disabled

States expanding Medicaid

States not expanding Medicaid

Medicaid Expansion

Hoping toreduce the ranks of nearly 49 million uninsured Americans, the Affordable Care Act allows states to expand the number of people eligible for Medicaid, the state/federal health insurance program for the poor and disabled.

This so-called “Medicaid Expansion” will extend coverage in 2014 to an estimated 8 million nonelderly adults who earn up to 138 percent of the federal poverty level. That’s about $15,900 for an individual in 2013 or nearly $32,500 for a family of four. The federal government has pledged to pay all medical costs for the newly eligible Medicaid enrollees in 2014, 2015 and 2016 and no less than 90 percent of their costs thereafter.

The June 2012 Supreme Court decision allows states to decide whether to participate in the Medicaid expansion. As of July 1, 23 states and the District of Columbia are moving forward with expansion, 21 states are not and six others are still debating the issue, according to the nonpartisan Kaiser Family Foundation, which studies health care issues.

Insurance marketplace coverage

Who will use marketplaces? People purchasing individual and small-group coverage

How the coverage levels vary

Percent of health care costs covered by: Insurance You

Find more info for your state:

Insurance marketplaces

As part of broad changes to the way health insurance is bought and sold, the Affordable Care Act creates new online health insurance marketplaces where individual and small-group coverage can be purchased from qualified health plans. Each state will have a marketplace that will launch in October with open enrollment for coverage in 2014.

An estimated 7 million people will purchase insurance on the marketplaces between October and March 2014, according to the Congressional Budget Office.

The marketplaces will either be federally operated, state-run or administered jointly.

Marketplace plans will be divided into four categories based on the portion of medical expenses they cover: Bronze plans cover 60 percent; silver plans cover 70 percent; gold plans cover 80 percent and platinum plans cover 90 percent. Plan members pay the remaining portion.

The marketplaces will also offer “catastrophic coverage” for people under age 30 and those age 30 and over with low incomes who can’t get affordable insurance or who have a hardship exemption from the individual mandate. Catastrophic plans protect against high medical costs from accidents or a major illness.

Small employers and their workers will also be able to purchase coverage through the marketplaces, using the Small Business Health Options Program, or SHOP. Some small employers with less than 25 workers will be eligible for a tax credit worth up to 50 percent of their premium contribution.

In states with federallyoperated marketplaces, employers can only offer worker coverage through one SHOP plan in 2014, but multiple plans in 2015 and thereafter.

Am I eligible for any subsidies?

The Kaiser Family Foundation has an interactive questionnaire designed to help you figure out how much assistance you might get in the form of tax credits.

Tax credits

Nearly 26 million low and moderate-income people will be eligible for tax credits to help pay for coverage on the new marketplaces, according to Families USA, a nonpartisan patient advocacy group.

The tax credits are structured to protect people from spending more than a set portion of their income on coverage. The amount of the tax credit depends on the applicant’s income and the cost of coverage. The tax credits could range from a few hundred dollars to more than $10,000. Low income people will get larger tax credits than those with higher incomes.

The amount of the tax credit is revealed after submitting an online application through the marketplace. The money is sent directly to the applicant’s insurance company to be applied to the premiums.

Individuals and families who earn between 100 percent to 400 percent of the federal poverty level will be eligible for the tax credits. In 2013, that would be individuals who earn roughly $11,500 to $46,000 annually, or four-person families earning roughly between about $23,550 and $94,200 annually.

The amount of the tax credit is based on the price of the “benchmark plan,” which is the second-lowest cost “silver” plan in your area.

Insurance industry reforms

Rules designed to make new policies more generous, affordable and transparent:

Accessibility Guarantees access to individual coverage regardless of current or past health problems

Value of coverage Each plan must cover at least 60 percent of costs

Out-of-pocket limits Insurers must limit annual out-of-pocket costs such as co-pays, deductibles

Rating requirements Limits amount older plan members may be charged, no annual benefit-spending limits, rates can’t vary based on gender, occupation or claims history

Changes to the insurance market

The health care law engineers a complete makeover of individual and small group coverage next year through a series of changes designed to make newly issued policies more generous, accessible, affordable and transparent.

The individual, or “nongroup,” market has long been problematic for consumers. It’s known for high customer dissatisfaction and turnover, high coverage denial rates, lean benefits and premiums subject to frequent increases.

The new rules guarantee access to individual and small-group coverage regardless of current or past health problems.

They also require each plan to cover at least 60 percent of medical costs, and limit annual out-ofpocket costs, like co-payments and deductibles. The new consumer protections also limit the amount that older plan members may be charged; outlaw annual benefit-spending limits; and no longer allow insurers to vary rates based on gender, occupation or medical claims history.

The law requires all individual and small-group health plans in 2014 to cover a list of “essential health benefits,” including substance abuse services, pediatric dental and vision care, mental health treatment and others often excluded from current policies.

Just 15.4 million people purchase individual coverage, according to the Kaiser Family Foundation. But that number is expected to increase substantially next year, when premium tax credits become available to help people buy individual coverage through the new online insurance marketplaces in October. About 24.5 million people have small-group coverage through companies with 50 or fewer employees, according to federal estimates.

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