How Health Care Reform Will Affect You

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Now that health care reform is nearly here, it's time to find out how it's going to affect you, your budget and your ability to get coverage. The hysteria surrounding the bill is over. Now's it's time to understand the new world we're facing.

Now that health care reform has passed the U.S. House of Representatives, odds are that it will soon be law. So let’s take a minute to see how the most sweeping changes in American health care in 40 years will change things for you.

Begin by watching the following news story that will give you a quick rundown of what’s in the healthcare bill, then meet me on the other side for more.

Now here’s a recap of those facts with a bit more detail.

For those that are uninsured

Without question, uninsured Americans will be most affected by health care reform. If you don’t have health insurance because you’re unemployed or don’t make enough to afford it, you’re going to get a subsidy to help cover the cost of coverage. The subsidy will be based on your income, but the result will be that at least 30 million people who couldn’t afford insurance will now theoretically be able to.

And if you have lingering doubts that this group of people really needed the government’s help, check out a couple of news stories we recently did about how the uninsured suffer:

So the news is good for uninsured Americans who needed and wanted coverage, but there’s another group of uninsured who may not be so happy: those that can afford insurance but choose to forgo the expense by going without. In an effort to encourage all Americans to have health insurance, beginning in 2014 these people will face fines for that kind of risk-taking. The proposed fine is 2.5% of income, up to $2,085, so the incentive to have insurance will be powerful.

That covers the uninsured minority. Now let’s take a look at the majority: those Americans who currently have health insurance.

For those who get their insurance at work

Americans who get their coverage through their employer are the largest group of insureds in this country. And ironically, considering all the bitter bickering over this bill, they’re probably also the least affected. If you’re the average Joe or Jane, you probably won’t see big changes in either cost or coverage from your employer-sponsored health insurance; at least not immediately.

If your employer doesn’t offer health insurance at work and they’ve got more than 50 employees, odds are they’re going to start. Because if they don’t, they’ll be facing major fines.

If your employer has fewer than 50 employees, they won’t be forced by fines to offer coverage; they’ll be encouraged by tax breaks to do so.

Self-employed or others who buy their own coverage

According to the Congressional Budget Office, those who buy their own insurance privately could face higher prices: up to 13% higher for a family policy. The increase would be less for an individual policy.

Whenever you’re considering these types of changes in prices (or lack thereof), keep in mind that determining cost going forward is far from an exact science. While the C.B.O. and others have estimated costs, nobody really knows the combined effects of adding 30 million new people to insurance pools, removing lifetime limits and mandating other changes that improve coverages. Further complicating the process is the fact that major changes are phased in over time, with many not taking place until 2014.

If you want to gain a greater understanding of changes coming under the new bill, go through the Congressional Budget Office report. or this 13-page publication from the Kaiser Family Foundation. Neither are written in legalese and both will help you understand a lot more.

And to see what other bloggers think of the new law, a couple more links: Stew over at Gather Little by Little shares his thoughts on the recent healthcare legislation and Mark Riddix of Money Crashers further describes how the new health insurance laws affect you.

Stacy Johnson

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