Posted: 1:14 p.m. Friday, Sept. 13, 2013
By Brenda Goodman, MA, Reviewed by Sarah Goodell
You may have gotten a refund check from your health insurance company, for example. Or maybe the last time you visited your doctor you weren’t charged for some preventive services like vaccines, certain cancer screening tests, and tests for heart disease and diabetes.
And more change is coming.
This fall, many people will start shopping for beefed-up health coverage through new online Marketplaces, also called Exchanges. The new policies will take effect in January, and people who don't have adequate insurance coverage in 2014 may face a penalty on the taxes they file in 2015.
Feeling lost about what all this means for you? A recent survey by the Kaiser Family Foundation found that slightly more than half of all Americans (51%) say they're still not sure what the health care reform law means for them. About 4 in 10 people aren’t sure if the law is still in effect. (It is.)
If you count yourself among the confused, don't fret. This article covers seven surprising things you need to know about this brave new world of required health insurance coverage.
The new law does require most people to carry health insurance or pay a penalty when they file their taxes. In 2014, the penalty will be $95 per adult and $47.50 for each child, or 1% of your income, whichever is greater. The maximum penalty for a family is $285.
What you may not know, though, is that 9 out of 10 working-aged adults won’t be subject to the penalty because most people already have insurance that meets the law, or they don’t make enough money to be fined, according to experts.
You may have heard that everyone is scrambling to meet the law's Oct. 1 deadline. Breathe easy. You don't have to do anything by Oct. 1. But the federal government -- or your state -- is on the hook, and your employer probably is, too.
Oct. 1 is the day the new insurance Marketplaces are set to open in every state. The Marketplaces have web sites that offer one-stop shopping for new health insurance. Fill out a three-page form, and you can find out if you qualify for financial assistance and see what policies you can buy. Open enrollment runs from October 2013 through March 2014. Some states chose to operate their own Marketplaces. Others left it up to the federal government. There also will be trained “navigators” in your community to help you understand and sign up for insurance.
A major goal of the Affordable Care Act is to help people get good-quality and reasonably priced health coverage if they don't already have it. That’s why the government will help people pay for new policies if they make less than 400% of the federal poverty level, or $45,960 for an individual or $94,200 for a family of four.
About 26 million adults under age 65 who are uninsured will be required to buy insurance or face a penalty. Of those, two-thirds can get the coverage for free or at a reduced cost, according to the nonprofit Urban Institute. That includes 11 million people who will be eligible for a government subsidy (a type of financial aid) and about 8 million who can get the coverage for free or nearly free through Medicaid or the Children's Health Insurance Program (CHIP).
"Most people, most of the uninsured, and about half of people buying individual insurance already, will be eligible for tax credits," says Larry Levitt, senior vice president of the Kaiser Family Foundation.
To get the new tax credits, though, you'll need to buy a policy through one of the new state Marketplaces.
The lower your income, the less you will pay.
"I think many people will be pleasantly surprised that they qualify for help ... and that they have a selection of plans that will serve them," says Cheryl Fish-Parcham. She is deputy director of health policy at Families USA, a nonprofit group.
The Affordable Care Act is expanding health insurance coverage for everyone, but women will arguably see some of the biggest benefits from the law.
Many are already in effect. For example, if you meet age requirements, certain health checks are offered at no charge to patients, not even co-pays. These include mammograms, bone scans for osteoporosis, Pap smears and pelvic exams for cervical cancer, colonoscopies for colorectal cancer, and a host of other health tests. Birth control is now free to women, as is the doctor's visit to figure out which kind of contraception you might need.
Starting in January, a woman can't be charged more than a man for health insurance. Right now, 36 states allow insurers to charge women more -- and 92% of popular plans in those states charge women between 20% and 40% more than they charged a man of the same age, according to a 2012 report from the National Women's Law Center.
"So now we'll have a new world in which women will not have to pay more than men for the same insurance policies," says Lauren Birchfield Kennedy. She is senior health policy council for the National Partnership for Women and Families.
Also coming in 2014 are big benefits for self-employed women. In the past, most insurance policies available to individuals, rather than through an employer, didn't cover maternity care. With insurance, women pay, on average, about $2000 to $3,000 out of pocket to have a baby, according to a recent report by Childbirth Connection. Without insurance, the costs for a healthy birth can be several times that much, and the costs of a complicated pregnancy can run into the tens or hundreds of thousands of dollars.
In January, all insurance plans sold to individuals will have to cover maternity care. They'll also pick up the costs of breastfeeding supplies, like breast pumps.
"We were pleased and very excited to see these services included in the new law and robustly implemented," Birchfield Kennedy says. "I think it's going to be a game-changer for women to have these available under their health plan."
In the past, insurance companies could refuse coverage to people with health problems.
As part of the application process, companies combed through patients' medical records, looking for any sign that they might already be ill.
And they had a lot of leeway to define these pre-existing conditions, which could range from serious and ongoing problems like diabetes or cancer, to a long-forgotten ailment like an old sports injury.
Companies could deny coverage altogether or might've offered limited or more expensive policies that put coverage out of reach for many. A recent report from Families USA found that 1 out of 5 adults under age 65 has a pre-existing condition that could have disqualified them from health coverage under the old rules.
The new law gets rid of this rating system. Insurance companies must now cover everyone, regardless of their health. And they can't charge you more if you're sick or you were once treated for an illness or injury.
Prices will be based on three things: Your age, where you live, and whether or not you smoke.
By Oct. 1, many people will get a letter from their employers. Companies that do at least $500,000 in business each year are required to send these letters.
The letters are to notify employees that their state Marketplaces offer new insurance options for people who qualify. They also have important information you'll need to help you figure out if you're eligible to buy insurance on your Marketplace. That includes whether your employer offers coverage and whether it’s offered to dependents. It also includes whether the plan meets the "minimum value standard" set by the law. A plan has to cover at least 60% of your health costs to meet the standard.
If the insurance at your job costs too much or doesn't cover enough of your health costs, you may be eligible to shop on your Marketplace and be eligible for financial assistance.
For most people, the best deals will come from health insurance policies that are part of your benefits package at work or bought through the new Marketplaces, because the Marketplaces are the only places you can use tax credits to help pay for your plan.
But if you're self-employed and make too much money to qualify for tax credits, it may be worth your while to look for coverage outside the Marketplaces, says Levitt of the Kaiser Family Foundation.
Under the law, all new plans sold on the individual market will have to meet a set of minimum requirements. These requirements vary a bit from state to state, but all new plans will now have to cover 10 essential benefits, including some that were often missing from individually purchased plans in the past, such as coverage for mental health problems, substance abuse, and maternity care.
Why look outside your Marketplace? You may find the same insurance companies, "but they're offering a slightly different plan, maybe with a different network of providers and a different cost-sharing structure" that may better suit your needs, Levitt says. Or you may find plans from companies that decided not to participate in the Marketplace.
Be aware, though, that Marketplace plans may have lower administrative costs than plans you might buy through an insurance broker. So far, administrative costs being added to plans in the Marketplaces range from about 1.5% in states that are running their own Marketplace to 3.5% in states where the federal government is operating the Marketplace, Levitt says. Meanwhile, commissions to brokers, which are added to the premium, have historically been in the double digits, he says.