By: Eric Steinmehl
The Affordable Care Act (ACA) is coming -- quickly. The new health insurance exchanges (think "insurance stores") open for business on October 1, and most of the law's other features will be fully in effect by the New Year. Do you understand how the big, sprawling, sometimes-bewildering law affects you? Here's a keep-it-simple guide.
1. (Almost) Everyone Needs Health Insurance
Maybe the most famous part of the ACA is the "mandate," the requirement that everyone have health insurance coverage. (Medicare, Medicaid, employer-provided plans and veterans' insurance all count.) The rule exists to get healthy people into the insurance market to keep rates affordable, and to keep people from running up medical bills they can't pay. If you choose not to buy insurance, you'll have to pay a tax penalty, which could eventually be as high as $2,085 per year or 2.5% of your income, whichever is higher. There are exceptions to the rule, such as if your income is below a certain level, or if you'd have to pay more than 8% of your income to get insurance. And if you have a short gap in coverage -- while between jobs, for example -- you're not penalized.
Learn ways to pay for healthcare if you don't have insurance.
2. Shopping for Health Insurance Will Be Easier
The exchanges, also called Health Insurance Marketplaces, are meant to simplify the process of choosing a health plan. Fill out one application online, by mail or in person, and you'll see all the plans available for you in your area, plus any discounts or free services for which you may qualify. You'll be able to compare plans by price, benefits and quality, and plans will be grouped in simple categories ("Bronze" through "Platinum," as well as "Catastrophic") based on their levels of coverage. Perhaps best of all, the plans will be explained in plain, easy-to-follow language. The exchanges are open to anyone who doesn't have insurance through work, or whose employer-provided insurance is too expensive or doesn't meet the law's minimum standards. Happy with your existing insurance, or prefer to buy through a broker? You don't have to change a thing. The exchanges are just another option.
3. Preventive Care is Covered 100%
The law already requires that health plans pay 100% of costs for preventive care, which means you don't pay out-of-pocket costs or deductibles for services such as vaccinations, health screenings and quit-smoking programs. The idea is to keep you healthy so you don't develop costly-to-treat illnesses. But check carefully: While a test like a mammogram is fully covered, any follow-up tests or treatment may not be. You might have to pay a deductible or co-pay on those. In addition, the ACA will end lifetime or yearly limits on "essential health benefits" such as hospitalization, prescription drugs and maternity care. Insurance companies won't be able to set dollar limits on what they'll spend on you for these services. However, plans will still be able to limit coverage of "non-essential" services, such as chiropractic treatments.
See the full list of covered preventive services.
4. Insurance Companies Can't Deny You If You're Sick
In the past, it's been hard for people with serious illnesses to find affordable individual health insurance. But starting January 1, 2014, insurance companies won't be allowed to turn you down if you have a health condition, or charge you more than they would charge a healthy person your age. They can't refuse to pay for treatment for your pre-existing condition. And they can't charge women more than men for coverage. The ACA also expands your rights to appeal any claims your plan refuses to pay. Also, your insurance plan can't cancel your coverage if you develop an illness while you're covered. In the past, companies have been accused of using technicalities (like an error on an application) to take away coverage and even make customers pay back money spent on claims, a practice called rescission. Now, that's allowed only if you purposely put false information on your application.
5. You May Be Eligible for Help Paying for Insurance
There's a lot of debate over how the ACA will affect insurance premiums. In general, rates are expected to go up for young, healthy people with existing coverage, while insurance will be more available and affordable for higher-risk groups. And some people will pay additional taxes. However, the law aims to help people with low and middle incomes in several ways. Under the ACA's Medicaid expansion, people with limited incomes (under about $15,000 for an individual and $31,000 for a family of four) will be eligible for Medicaid -- but only in states that participate. People with incomes up to about $46,000 for an individual and $94,000 for a family of four, and who don't have employer-provided coverage, will be eligible for discounts in the health exchanges. And if your employer-provided insurance costs exceed 9.5% of your income, you can buy insurance in the exchange and may be eligible for help.
6. The Big Exception: "Grandfathering"
One hole exists in the benefits and protections provided by the ACA. Plans that existed before March 23, 2010 and that have stayed basically the same are considered "grandfathered," and many parts of the ACA don't apply to them. Even if you join a grandfathered plan after that date, you're not protected. Grandfathered plans don't have to provide preventive care for free. Individual grandfathered plans -- that is, plans that you buy for yourself, not provided by your employer -- can still put yearly limits on your coverage, and can deny you if you have a pre-existing condition. To find out if your plan is grandfathered, check your plan's materials or check with your employer. Benefits statements have to tell if a plan is grandfathered.
Want to know more about the Affordable Care Act? See all our answers here.
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By: Eric Steinmehl