Photo (cc) by 401(K) 2013
Love it or loathe it, the Affordable Care Act has many Americans scratching their heads and asking, “What will it mean for me?”
About two-thirds of the uninsured polled said they don’t understand how the health care reform law, commonly known as Obamacare, will impact them, says the Kaiser Family Foundation.
This is something they’ll need to figure out, and fairly quickly: Uninsured Americans will be required to obtain health insurance as of Jan. 1, 2014, or face penalties. The penalty in 2014 will be $95 per person or 1 percent of income, whichever is higher, and will increase to $695 or 2.5 percent of income in 2016. (This FactCheck.org story provides more details.)
But don’t let your blood pressure spike. Here are some quick facts to help you understand what’s going on:
Will I be affected?
Anyone who doesn’t have access to affordable health insurance through their job or through a government program like Medicare or Medicaid can apply to buy health insurance through the insurance marketplace or exchange in their state, beginning on Oct. 1. That includes:
- Those who don’t have insurance. Last year, nearly 34 million Americans had been without insurance for at least a year, the U.S. Centers for Disease Control and Prevention found.
- The 15 million Americans who currently buy insurance on their own and not through a work-based plan.
- Workers whose work-based insurance is not affordable, meaning their share of the cost for their coverage (not family coverage) exceeds 9.5 percent of their income.
People will still be able to buy individual policies without going through an exchange — for instance, directly from an insurance company or an insurance broker.
What if I’ve been turned down before?
Under Obamacare, no one can be denied insurance or charged a higher rate because they have a pre-existing condition. That will help the estimated 12.6 million Americans who can’t currently get coverage because of their medical history.
What kind of coverage can I get?
The exchanges will offer four levels of coverage:
- Platinum, which will have the highest cost and lowest out-of-pocket expenses.
- Bronze, which will offer the least expensive monthly premium but highest potential out-of-pocket costs.
All plans are required to provide a new minimum standard of service, which is higher than some plans provide today. CNNMoney explains:
Starting next year, nearly all individual plans — both in and out of the exchanges — will be required to cover an array of “essential” services, including medication, maternity and mental health care. Many plans don’t currently offer those benefits.
How much will insurance cost?
How much insurance bought through an exchange will cost depends on several factors:
Your age. Older people could pay as much as three times the rate charged to young adults.
- Location. You’ll likely face higher premiums if you live in an area where the cost of providing health care is high, and lower premiums where health care is not as expensive.
- Size of your household. Obviously, the more people you’re insuring, the higher the cost.
- Use of tobacco. Smokers will pay up to 1.5 times the premiums of people who don’t use tobacco. Some think this is unfair to low-income people, who are more likely to smoke, and some states have already banned a smoker’s surcharge.
Will I be eligible for a subsidy?
Only those buying health insurance on the exchanges will be eligible for a subsidy. The subsidies generally will be applied when you buy insurance on the exchange, reducing the premiums you pay each month.
Will you be receiving one? The Kaiser Family Foundation has provided a calculator to help you figure out your potential eligibility for subsidies. Michelle Andrews of Kaiser Health News provided this explanation:
To be eligible for subsidized coverage, your income would have to be between 100 and 400 percent of the federal poverty level ($11,490 to $45,960 for a single person in 2013). “Income” in this case means modified adjusted gross income — basically the total of your adjusted gross income from your tax return and any tax-exempt interest income you have as well as certain foreign income.
Many people will be helped by the subsidies. A new study by consulting firm Avalere Health found that two-thirds of young adults who are uninsured now will be eligible for subsidies, The Hill reports. (People with lower incomes may be eligible for Medicaid.)
Families USA estimates that nearly 26 million Americans will be eligible for subsidies.
California recently released information about what people will pay for insurance on the exchange there. “The cost to a 40-year-old who needs coverage would vary from about $40 to $300 per month for a mid-level plan, depending on the person’s income. Some young adults, who are less expensive to cover, could pay nothing, depending on how much they earn,” reports Reuters.
Is my employer required to provide insurance?
Another component of Obamacare is that companies employing at least 50 full-time workers will be required to provide affordable health insurance or face financial penalties. (Remember the definition provided above: The employee share of the cost can’t exceed 9.5 percent of their income.) However, that requirement was recently delayed until 2015.
According to the Kaiser Family Foundation, 94 percent of companies of that size already provide health insurance to workers.
Still have questions?
Need more help to figure this out? The Washington Post has an interactive questionnaire that can help you determine the impact of the Affordable Care Act. Simply fill in your information.
This is the final big rollout of the provisions of the Affordable Care Act, which, since its passage in 2010, has allowed, among other things:
- Children to remain on a parent’s health insurance policy until age 26.
- Access to standard preventive health care tests at no out-of-pocket cost.
- The elimination of the lifetime cap on health services.
Are you planning to buy health insurance through one of the exchanges? What do you think of Obamacare? Share your comments on our Facebook page.