Sponsored by The Motherhood & Anthem Blue Cross and Blue Shield; opinions are my own.
What do you know about the Affordable Care Act? Or ObamaCare, as it’s often called? I apparently didn’t know much until I took part in a briefing with Anthem Blue Cross and Blue Shield last week that was quite eye-opening! I learned all about what health care reform is setting out to do and what to expect from Open Enrollment, which starts next week – on October 1st! These are some highlights:
WHAT IS IT?
The Affordable Care Act (ACA) is the beginning of a complete change in the way we purchase health care coverage and access care. Passed in Washington a couple of years ago, its purpose is to make sure that everyone has access to good health care at a good cost. For many people, this means access to care for the first time in their lives and for others it means access to expanded benefits.
IT’S A SYSTEM WHERE…
- you cannot be charged more or denied coverage for a pre-existing condition.
- women are charged no more than men.
- if you do not get insurance through your work – if you’re self-employed, for example – you can get insurance through an online marketplace, or exchange.
- if you need and qualify for help paying for coverage on the exchange, you can get help with government subsidies.
- if government subsidies don’t offer the assistance you need, you can get coverage through Medicaid.
- a larger group of low income Americans are now eligible for Medicaid, with the federal poverty level increasing to 133%.
- dependent coverage is required for children until they turn 26 years old, so children are eligible to receive coverage regardless if they are in college, a tax dependent or are married.
- a number of benefits are included no matter what – things like emergency services, maternity and newborn care, pediatric services (including oral and vision care), mental health and substance use disorder services, preventive and wellness services and chronic disease management.
- you’ll get preventative care for mammograms, well woman visits, contraception and much more.
- you can choose your own primary care, OB-GYN or pediatrician without referrals.
- as an incentive for people to buy health insurance, there’s a tax penalty for those who choose not to do so. (More on that below!)
HEALTH INSURANCE EXCHANGES
Starting October 1st – next Tuesday – health insurance “exchanges” or “marketplaces” will open for business, allowing individuals to buy health insurance. This works similarly to comparison shopping on Amazon or booking a trip on Expedia, letting you compare your health insurance options in a straightforward way.
- Enrollment begins: October 1, 2013
- Enrollment ends: March 31, 2014
- Coverage begins: January 1, 2014, for those who sign up before December 15th!
To be eligible to participate in the healthcare exchanges, individuals must live in the U.S., be a U.S. citizen or national, and cannot be currently incarcerated. Those who are currently covered by their employers will probably not see a change or even have to use the public exchanges.
With expanded benefits come higher costs – that’s pretty much a given. Health insurers can either pass those costs on to their members – increasing your monthly premiums – or figure out ways to manage those costs so that health insurance remains affordable. The thought is that the more young, healthy individuals are included in the insurance pools, the more reasonable rates are for everyone. There will be several levels, or tiers, depending on how much you want to spend. Generally, the lower your deductible, the more you spend on your monthly premium, and co-pays will vary depending on the plan you select.
Ultimately, SO many variables impact the cost of insurance – family, geography, income, and subsidies that you may or may not be eligible for – which makes it hard to predict these costs. For those who have trouble paying for their coverage, the government subsidies will definitely be a big help! Your yearly income will determine whether you qualify. For example, assistance will be available – on a sliding scale – for individuals who make $45,000 a year and a family of four that makes about $92,000 a year. The less money you make, the more assistance you’ll get.
Health insurance only works if everyone is part of the pool! Those who use lots of health insurance balance out those who use little. As an incentive to encourage people to buy health insurance, now there will be a penalty tax on those who don’t – 1% of your annual income, or $95 per individual, $285 per family, depending on which is greater. This will go up every year until 2017- by 2015, fees will go up to $325 for uninsured person or 2% of taxable income, and in 2016, the fee will go up to $695 for an insured person or 5% of taxable income. Ouch! Perhaps people will see that spending money on health care coverage is a better option than spending it on a government tax at the end of the year. (The exception to this is if you make $9,500 or less, in which case you won’t have to pay the penalty tax.)
THE IMPORTANCE OF HEALTH INSURANCE
Buying health insurance is an important way to protect you and your family in the event of injury or illness. It’s also essential to protect your financial future, as injury and illnesses can be costly without insurance. Just think – an average cost of a 3-day hospital stay – without insurance – is $30,000! And something as little as a broken arm can cost $2,500 or more (without surgery!)
To summarize, these are your four options to get health insurance for the next year:
1. Continue purchasing insurance through your or your spouse’s employer.
2. Buy health insurance yourself – either through exchanges, direct for insurance companies or through traditional brokers .
3. Enroll in government programs like Medicare or Medicaid plans – if you are eligible.
4. Go without insurance – but pay a tax penalty.
YOUR TURN: What do you think about the Affordable Care Act? How will it affect you?