In 2010, the federal government approved a hotly contested law aimed to increase the number of Americans with health insurance and decrease the cost of healthcare in America. As part of the Patient Protection and Affordable Care Act (ACA), known colloquially as “Obamacare,” financial assistance is available to help some individuals and small businesses pay for their health insurance.
There has been so much controversy surrounding the act that sometimes the basics become blurred. So Amy sat down with Toni Dixon, an expert on the Affordable Healthcare Act, who explained the basics in layman’s terms. Here are the important take-home points.
QUESTION: What am I getting that I didn’t have before?
ANSWER: With Obamacare, you’re getting “free” preventive care, essential health benefits, coverage for preexisting conditions, and greater access to health insurance.
“Free” preventive care. Many services, such as mammograms, Pap tests, contraceptive counseling, and all recommended preventive services are “free” (meaning that your insurance company is required to offer them to you at no additional direct cost. The cost is real, however — just not direct at the time of screening). Also covered are contraception, sexually transmitted disease screenings, and counseling, and domestic violence screening and counseling in most cases.
Essential health benefits. The ACA requires that all individual and commercial plans cover “essential health benefits,” which includes services in 10 categories:
- All outpatient medical care
- Mental health and substance abuse services
- Emergency services
- Prescription drugs
- Pediatric services, including dental and vision care
- Rehabilitative (including devices) and “habilitative” care
- Laboratory services
- Preventive, wellness and chronic disease services
- Prenatal, maternity, and newborn care
Coverage for preexisting conditions. All health insurance plans sold after March 10, 2010, must provide health insurance for individuals and their families, even if someone has a health condition such as diabetes or asthma. The patient cannot be dropped by the insurer if he or she gets sick.
Greater access to health insurance. Beginning next year, employers with 50 or more employees who work 30 hours or more a week must provide “affordable” health insurance.
There is much controversy about whether the cost is too high for employers to maintain active medical plans, however, so we can expect to see some revisions surrounding this in the future.
QUESTION: If this act is “affordable,” then why did my insurance premium go up?
ANSWER: If your insurance premium went up, then it’s likely that your insurance plan was missing one or more of the essential health benefits listed above and had to upgrade to provide the new minimum standard of care.
Affordable to the Obama administration means that your insurance plan for yourself is less than 9.5 percent of your household income; however, be careful about a plan that is affordable for you but very expensive to add on family members.
If you have a health plan that is not affordable, then you are eligible to receive assistance from the government to subsidize the cost of your insurance premium, as long as you are between 100 percent and 400 percent of the federal poverty level. For a family of four, you will qualify for assistance if you make $94,000 or less. In this case, the insurance company will bill some of the premium to the government and some to you, which is technically called an “advance premium tax credit.” Be aware, however, that the IRS is going to track this carefully on your tax returns. If you underestimate your income, you might have to pay additional fees at tax time. It goes without saying that there will be a huge administrative cost for the IRS to oversee this, which will eventually find its way back to the taxpayer.
QUESTION: I found a plan that will work for me. How do I enroll?
ANSWER: If you are interested in enrolling in a healthcare plan under the Affordable Care Act, go to https://www.healthcare.gov/marketplace/b/welcome/. If you are a small business owner, go to the Small Business Marketplace at http://www.avenueh.com/. Your last chance to enroll for 2014 is March 31, so be sure to do it quickly!
QUESTION: What if I don’t want health insurance?
ANSWER: If you are an American citizen, you are required to have health insurance, unless you are a ward of the state, part of a federally recognized Indian tribe, an Alaska native, or part of a religious group that doesn’t believe in healthcare.
If you don’t have health insurance, you’ll be assessed a penalty at tax time. In 2014, the annual penalty (oversimplified) is 1 percent of the annual household income or $285 per family, whichever is greater. In 2015, it’s 1.5 percent or $975 per family. For 2016 and beyond, it’s 2.5 percent or $2085 per family. Penalties are capped at the national average premium for the lowest cost bronze plan available in the marketplace.
Greg and Amy’s Recommendation:
Many citizens feel that the principles of the ACA contradict the American spirit of freedom and self-sufficiency. Now that it being implemented, however, we all need to prepare as well as we can for this major shift in healthcare. If you are currently uninsured, do not have access to insurance through your employer, or think your employer may not be offering health insurance in the future, we recommend that you work with a free, local certified application counselor in Utah to find the best options. Go to Find Local Help at HealthCare.gov and enter your zip code to view a list of counselors available in your area.