How Federal Health Care Reform will Affect You
The next phase of the Patient Protection and Affordable Care Act – sometimes called PPACA or federal health care reform – goes into effect on October 1, 2013. Please visit the federal health care reform website to understand the changes. www.HealthCare.gov
How Health Reform Will Affect You Now
Medical conditions. People with preexisting conditions who have been without insurance
for at least six months can buy insurance through the federal Pre-Existing Condition Insurance
Plan (PCIP). Rates for the lowest plan range from $133 a month for people up to age 18 to $426 for people age 55 and older. Visit www.pcip.gov or call 1-866-717-5826 for more
Note: Preexisting conditions are medical problems or illnesses you had before you applied for coverage.
Free testing. You can now receive some preventive services free (with no copayments or deductibles). Depending on your age and gender, you may get blood pressure and diabetes testing, mammograms, cancer screenings, and flu shots.
No dollar limits. Insurance companies may no longer put dollar limits on the coverage you receive over your lifetime. They also must start phasing out annual dollar limits. Previously, insurance companies could set limits on the amount they would pay. When you reached the limit, the company would no longer pay for your health care.
Rescissions. Insurance companies may not rescind your policy if you get sick. Companies may now only rescind a policy if you commit fraud or intentionally misrepresent a material fact. Rescind means to cancel a policy back to the effective date as if it had never been issued.
Tax credits. Small businesses – those with 25 or fewer full-time employees -- that pay for at least 50 percent of premiums and pay average annual wages below $50,000 may receive a tax credit. The credit is worth up to 35 percent of premium costs (25 percent for tax-exempt employers).
This credit increases to 50 percent (35 percent for tax-exempt employers) in 2014.
Children and young adults
Medical conditions. Health plans may not deny or limit health care coverage to children under age 19 with preexisting health conditions. The same will be true for adults in 2014.
Staying on parents’ plan. Adult children who don’t have coverage through their work may stay on their parents’ plans until age 26.
Prescription help. Seniors in the “donut hole” in 2012 get a 50 percent discount on brandname drugs and a 14 percent discount on generic drugs. (The donut hole is a coverage gap during which some Medicare prescription drug plans won’t help with your drug costs.) The donut hole will be gone in 2020.
Free testing. You may get free preventive services (including an annual wellness exam) through Medicare without a Part B coinsurance or deductible.
Premium dollars. Insurance companies must spend at least 80 percent of premium dollars on medical services and programs rather than administrative costs.
How It Will Affect You in 2014
Requirement. People without insurance who aren’t enrolled in a plan at work must buy health
care coverage in 2014. There are exceptions for religious objectors, people below the tax-fi ling
threshold, and others.
Penalty. The tax penalty for not having insurance will be $95 or 1 percent of taxable income in 2014; $326 or 2 percent of taxable income in 2015; and $695 or 2.5 percent of taxable income in 2016. The penalty will be determined based on infl ation for every year after 2016.
Exchanges. Small businesses and people who don’t get coverage through their employer will be able to buy insurance through insurance marketplaces called “exchanges.” Exchanges may be expanded to provide coverage for large employers in 2017. If a state chooses not to operate an exchange, you may purchase insurance through a federal exchange.
Tax credits. You might be able qualify for an advanced tax credit to help pay for coverage if your employer doesn’t offer insurance and your income is between 100 percent and 400 percent of the poverty level. (In 2012, this would mean a gross annual income between $11,170 and $44,680 for an individual and between $23,050 and $92,200 for a family of four. These amounts may be different in 2014.)
Health conditions and denials. Companies won’t be able to deny you coverage because of a preexisting condition or disability. Insurance companies will have to sell a plan to anyone who applies during the enrollment period. When deciding what to charge you, companies may only consider your age, where you live, whether you smoke, and whether coverage is for an individual or a family.
Insurance companies won’t be able place annual dollar limits on your coverage.
Tax penalties. Large businesses – those with more than 50 full-time employees – who don’t offer insurance will have to pay a penalty for each employee who gets tax credits to buy insurance. The penalty will be $2,000 for each full-time employee beyond the first 30 employees.
Enrollment. Businesses with more than 200 employees will have to automatically enroll employees in a health plan. Employees will be able to opt out of the automatic enrollment, but they will still be required to have some form of health insurance to avoid a tax penalty.
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