Please know that information regarding Obamacare changes all the time and it is very difficult to get a handle on what the actual effect will be on us all. As my insurance broker told me: “None of us really know how the new health insurance laws will affect us until 2014”. This article will be helpful, we believe, but make sure that you do your own research.
The Patient Protection and Affordable Care Act (PPACA), more commonly referred to as Obamacare, was signed into law on March 23, 2013, and upheld by the Supreme Court on June 28, 2012. Obamacare has and will continue to change the way individuals, families and employees are provided and protected by their health insurance plans.
It is important to note, before we begin listing the changes, that coverage will more than likely not change, nor will rates increase, for individuals, families or employees who are already covered under an existing health insurance plan. Obamacare speaks more to new plans and requires that, as of September, 2013, all insurance companies begin using the same form and format to help prospective applicants compare coverage plans. Further, plans that existed before March 23, 2010 are not required to comply with the rules put in place by the PPACA (they are “grandfathered” in), with exceptions.
All plans, including those that have been grandfathered in, are prohibited from applying lifetime dollar limits to key health benefits such as preventative care, treatment for allergies, and visits to physicians’ offices for sickness or injury. They can, however, still limit health care services that are not considered essential (both new plans and plans established pre-March 23, 2010). An example of a non-essential service would be hospice care or infertility treatments. Also, all healthcare plans, including grandfathered plans, are required to extend coverage to children who are on their parents’ plans until the child is 26 years old (whether or not the child is married, living outside of the family home, or is eligible for his or her own health insurance through an employer). Perhaps most important is the fact that new plans are not permitted to exclude applicants on the basis of preexisting conditions. This already applies to children and, beginning January 2014, will also apply to adults. Grandfathered plans, on the other hand, are permitted to make exclusions on the basis of preexisting conditions for both children and adults. Currently, PPACA guarantees healthcare coverage for all children, under the age of 19, regardless of preexisting conditions.
MANDATORY INSURANCE OR PAY A TAX
Plans covered under the PPACA are available through an exchange, often also referred to as a marketplace. Beginning in October 2013, US citizens and legal residents will have the opportunity to compare healthcare plans to decide which is most affordable and protective for their families. Obamacare mandates that all individuals not covered by an employer sponsored plan, Medicare, Medicaid, or other public program, secure an approved private insurance policy or pay a penalty (which is in the form of a tax). Individuals can also opt to stick with their current insurance plan, so long as the plan has been grandfathered in by PPACA. Should a person choose to opt out, and have no coverage at all, the tax penalty is 2.5% in 2014 (unless an individual makes over $200,000 a year, in which case it is the cost of the “bronze insurance plan,” about $5,000 per year) and will rise in the following years.
There are some exemptions to that penalty: Individuals who make under $9,500 per year, or are facing “financial hardship, and certain other individuals who are members of IRS designated groups (American Indians, certain religious groups etc.). The coverage for plans purchased through the exchange begins January 1, 2014. To help individuals learn how to sign up for insurance under the Affordable Care Act, the US Department of Health and Human Services has compiled a list of resources you can find here. (This hyperlink should take you to http://cciio.cms.gov/resources/other/index.html#hie) You can also view the form you will need to fill out here. (This one should take you to http://www.takepart.com/sites/default/files/ObamacareIndividualForm.pdf)
Under the PPACA, insurers are required to offer the same premium to applicants of the same age and geographic location regardless of most preexisting conditions (currently excluding tobacco use). Gender, too, is not a factor to be considered in establishing premium price. PPACA already disallows exclusions for preexisting conditions pertaining to children, under age 19, and that same rule will follow as concerns adults beginning in January 2014. Preexisting conditions are covered under the PPACA as long as you are a US citizen or legal resident, have previously been denied insurance because of your condition and if you have been uninsured for at least six months.
CHOICE OF HEALTH CARE PLAN, PREVENTATIVE CARE & COUNSELING:
Healthcare plans established after March 2010 must protect an individual’s choice of healthcare providers and the participants’ access to emergency care. They also must cover certain preventative care absolutely free of cost (no co-payment, co-insurance or deductible). Preventative care may include: blood pressure, diabetes and cholesterol tests, many cancer screenings (including mammograms and colonoscopies), baby and child check-ups (until age 21), counseling, screening and vaccinations during pregnancy, vaccines against measles, polio and meningitis.
Obamacare requires full coverage for counseling services on topics such as tobacco addiction, weight loss, substance abuse, and depression. Furthermore, insurers can no longer deny coverage based on a patient’s mental status. Instead, they will be required to cover mental health patients at parity with medical and surgical benefits. Beginning in January 2014 mental health will be part of the essential benefits package.
NO CAPS ON ANNUAL OR LIFETIME LIMITS
Under the PPACA, insurers cannot put a cap on annual or lifetime limits for essential services. This means services required to keep a patient alive and in good health must be covered; this is everything from lab, x-ray and diagnostic services to emergency room services to rehabilitation services to pregnancy and preventive care. Furthermore, healthcare plans are not allowed to drop members because they become sick. Some plans will, however, be permitted to put a cap on spending that is not considered “essential” (just like grandfathered plans). Know that, even if you stay with a plan that has been grandfathered in, as long as you have changed or renewed a policy after March 2010, your insurer cannot put a cap on essential services. Grandfathered plans may, however, continue to enforce annual caps until 2016.
Insurance companies are required to notify the public if they are going to increase their rates (this is called a rate review) and they must abide by the 80/20 rule. This rule mandates that insurers who sell policies to individuals or small groups must spend at least 80 percent of the premiums received directly on medical care and efforts to improve care. They cannot spend more than 20 percent on administrative costs. Insurers selling to large groups (usually 50 or more employees) must spend at least 85 percent directly on care and efforts to improve care. If insurers fail to do so, they must provide a rebate of the portion of the premium that exceeds the limit.
If you make between 100% and 400% of the poverty line (about $88,000 per year for a family of four) you are eligible for a tax credit to help offset the cost of insurance. Individuals who make over $200,000 a year, or families who make over $250,000 per year, will pay a tax of .09%, beginning in 2014, to help offset the cost of Obamacare. Under plans covered by the PPACA children are covered from birth for just about everything imaginable.
The cost of most prescription drugs are covered or reimbursed beginning in 2016. Prescriptions written for non-essential services are not mandated to be covered.
Sources and helpful links
Posted by Zia Meyer, Mediation Assistant
In a prior career, the Admin American practiced family law for several years. I wish I understood then what I know now about the free guidance available to family members who might be losing health coverage due to a divorce. Professional health insurance agents are not compensated directly by their clients so it doesn’t cost anything to get insurance advice from them. A great source of qualified health insurance agents in your area is the “Find An Agent” feature maintained by the National Association of Health Underwriters. It can be found at http://www.nahu.org. If you want to know what your current options are in the face of losing your coverage, you should seek an agent out. Good luck!