Clarifying health insurance mysteries
Exchanges go online beginning Oct. 1
The Associated Press
How do I know whether “Obamacare” applies to me?
Polls show many Americans remain mystified by the Patient Protection and Affordable Care Act, or “Obamacare” as it is commonly known. But there’s an obvious starting point: Do you have health care coverage?
If your employer provides health insurance for you, it’s likely you don’t have to do anything on Oct. 1, when enrollment begins. The president has said you will be able to keep your doctor and your plan.
For others — those without insurance — it’s more complicated. The law requires virtually all U.S. citizens and legal residents to have coverage or pay a penalty. That will happen either through an expanded government Medicaid program, which would cover costs for lower-income people, or by requiring people without coverage to buy it. Financial help will be available for those who qualify, based on income.
To enroll through Medicaid, an individual would have to have an income that tops out $15,400, or about $31,000 for a family of four.
There are just a few exceptions to the requirement for coverage, including for prison inmates, people who entered the country illegally, those facing financial hardship and religious objectors.
Here are some basic questions and answers about the changes coming up:
Q. When do I have to decide whether to buy health insurance and what happens if I don’t?
A. Beginning in 2014, virtually all Americans will be required to have health insurance or pay an annual penalty to the government. For an individual, the fine begins at a minimum of $95 in 2014, stepping up annually to a minimum of $695 by 2016. The fine for uninsured children in 2014 is $47.50 for each child, although the maximum a family would have to pay in penalties next year is $285. Those fees climb each year.
Federal researchers predict that about 6 million people could be hit with fines by 2016.
Those who owe penalties would see their tax refunds docked. Not everyone who fails to buy insurance will be forced to pay up — those exempted from the requirement to have insurance, such as prison inmates, would not be penalized, for example. That also would be the case with people who earn so little that they are not required to file a tax return.
People owing the government a fine under the law could try to massage their tax returns to avoid receiving a refund, and thus the government would have nothing to claim. It’s also possible people could try to exploit the religious exemption, for example, to avoid buying insurance and getting hit with a penalty.
According to the government, the IRS plans to hold back the amount of the penalty fee from future tax refunds, but there are no liens or criminal penalties for failing to pay.
Q. What are health insurance exchanges and how do they work?
A. Exchanges are the online markets on which individuals and small businesses will buy private health insurance. Think of them as one-stop-shopping destinations similar to Amazon.com that are supposed to give consumers a quick way to compare insurance policies. But they might not be available to some consumers until later. That could leave many who lack job-based coverage to enroll by mail or through call centers. Still, consumers are expected to be able to see all their options in the exchanges and choose their health plans based on price, benefits and other features. Many participants will qualify for federal subsidies in the form of tax credits to help ease the cost. The amount is based on income and is available to individuals making up to $45,960, or $94,200 for a family of four. Shoppers will have different buying experiences depending on who is running their exchanges — the state, federal government or a combination of the two. Enrollment begins Oct. 1, with health care coverage starting Jan. 1.
Q. How will actual health care coverage and services be different under Obamacare?
A. Coverage in the exchanges will be more comprehensive than what is typically available to individuals in the current health insurance market, which is dominated by bare-bones plans.
It will resemble what a successful small business offers its employees. All plans in the exchange, and most outside it, will have to cover a standard set of benefits, including hospitalization, doctor visits, prescriptions, emergency room treatment, and maternal and newborn care. Under the law, insurers can’t turn away people or charge them more because of health problems or chronic illnesses. Insurers also are banned from setting different rates based on gender. Middle-aged and older adults can’t be charged more than three times what young people pay, but insurers can impose penalties on smokers.
Most health insurance plans have to cover certain preventive services. Those include routine vaccinations, vision and hearing tests for children, and screenings for diabetes, high cholesterol, colon cancer and high blood pressure.
Q. I currently have insurance through my employer. Will anything change?
A. For many people who have health insurance through their employer, the Kaiser Family Foundation says not a lot is expected to happen right away. Some workers may receive a financial break from the new cap on out-of-pocket expenses and free preventive care. But some larger companies, those with 50 or more employees, already are looking for ways to cut costs and avoid getting hit with a new tax set to take effect in 2018 on so-called “Cadillac” insurance plans. Those are defined as plans valued at $10,200 or more for individual coverage and $27,500 for family policies. United Parcel Service, for example, informed its white collar employees that it will no longer cover spouses if they can get coverage through their own employers. Delta Air Lines, meanwhile, recently predicted its workers may have to help shoulder the cost of various new mandates under the ACA, such as coverage for employees’ children until they are 26 years old and coverage for workers who had previously opted out but will now be required to have health insurance.
Q. The government has delayed the large-business mandate for a year, but what will the law mean for owners of smaller businesses?
A. Under the Affordable Care Act, a small business is defined as having anywhere from two to 50 employees. Those firms are not required to provide their workers with health insurance. But businesses with employment levels close to the 50-employee threshold have until 2015 to calculate whether it’s worth reducing their workforce or cutting workers’ hours to avoid a series of escalating penalties that kick in if just one of their employees ends up receiving government-subsidized health care. Meanwhile, many smaller businesses appear to be taking a wait-and-see approach before determining whether to buy coverage through health insurance marketplaces geared toward their needs. In some states, they won’t be able to compare rates with their current insurance plans until open enrollment begins in October. The business-to-business outreach manager at Connecticut’s health insurance exchange, for example, predicts the plans will ultimately be attractive to smaller businesses that did not always offer insurance coverage.
Q. Will I be forced to change doctors or health plans even I don’t want to, and will my choices for both be limited?
A. Probably not. You can maintain your current providers if you have job-based insurance and can choose any available primary care provider in your insurance plan’s network. However, the influx of patients who will be newly insured under the Affordable Care Act could overwhelm the health care system in some areas. That could mean you will see a physician assistant or nurse practitioner, rather than an actual physician.
In general, the Obama administration says the law offers new rights and protections whether you have coverage or need it, but there are some exceptions. The new rights do not apply to health plans created or bought before March 23, 2010.
Q. If I currently buy my own insurance, can I keep it or do I have to change?
A. If you have individual insurance — a plan you bought yourself rather than what you get through an employer — you should be able to change to a new plan if you choose.
It also will be illegal for insurance companies to cancel your coverage if you make simple mistakes on forms, but you still can be cancelled for intentionally making false claims. If you have COBRA continuation health coverage, you can maintain it or decide to buy a new insurance plan. If you select a plan by Dec. 15, you can have coverage starting Jan. 1.
Q. I keep hearing about bronze, silver, gold and platinum. What does that mean?
A. Bronze, silver, gold and platinum refer to the types of insurance policies available to businesses and individuals under the exchanges created by the health care law. The categories reflect how much premiums will cost each month and the amount you will pay for such things as hospital visits and prescription medications. The percentage covered by the plan increases from bonze to platinum. The lowest-cost plan is bronze, in which the insurance company covers 60 percent of the expenses and the individual will pay 40 percent. The highest-cost tier is platinum, in which the insurer covers 90 percent of the expenses and the individual pays 10 percent.
Q. Is “Obamacare” available for immigrants?
A. It depends on whether they are in the country legally. Legal immigrants will be required to buy health insurance or pay a tax penalty if they don’t. They can buy insurance through the health care exchanges and are eligible for the subsidies. Most legal immigrants cannot enroll in Medicaid if they have been in the U.S. for less than five years, although states have the option to waive the waiting period for pregnant women and children. Some legal immigrants will not be eligible for Medicaid, regardless of the amount of time they have been in the country.
Immigrants who are in the country illegally will not be eligible to buy insurance through the exchanges. They also are ineligible for Medicaid, although they remain eligible for emergency care under the law. Young immigrants who had been granted “deferred action” status by the Obama administration to avoid deportation by obtaining temporary work permits also will not be eligible for the exchanges or Medicaid.