The Affordable Care Act

aDefinition: Signed into law by President Barack Obama in 2010, the Patient Protection and Affordable Care Act is responsible for the most sweeping reforms of the United States’ healthcare system since the 1965 passage of Medicare and Medicaid.BackgroundHotly contested along party lines, Republicans opposed the Affordable Care Act, derisively using the term Obamacare to describe the Act. The controversy continues even after the ACA’s passage with numerous court challenges to the law.What are the reforms?Some of the reforms implemented by the Affordable Care Act include establishing Health Insurance Exchanges, or marketplaces, where individuals, families, and small businesses may purchase guaranteed issue qualified health insurance plans with affordable premiums. These plans satisfy the ACA’s individual mandate requiring those who don’t have health insurance buy a health insurance policy.The ACA provides low-income purchasers with subsidies to make buying health insurance more affordable. At the same time, it imposes a tax penalty on those who remain uninsured once affordable health insurance is available through Health Insurance Exchanges.The ACA prevents insurers from refusing to cover people with a preexisting condition, or from charging them higher premiums because of a preexisting condition. This reform is phased in over several years.The ACA eliminates annual and lifetime caps on how much an insurance company will pay for a policy holder’s covered healthcare, and limits out-of-pocket maximums. It also eliminates copayments, deductibles, and coinsurance for basic preventive care services.Some parts of the Affordable Care Act won't be implementedTwo parts of the ACA will never be implemented. The Supreme Court disallowed a provision that would have withdrawn federal Medicaid funding to states that didn’t offer Medicaid to more people. Additionally, Congress repealed the long-term care provision of the ACA, known as the CLASS Act, in January 2013 after the Department of Health and Human Services determined it was unworkable.Also Known As: The Patient Protection and Affordable Care Act, the PPACA, the ACA, Obamacare, healthcare reform

Affordable Care Act – What You Should...

a Affordable Care Act - You can expect significant health insurance changes in the coming years.alexsl/iStockphoto On March 23, 2010 President Obama signed into law the federal health reform legislation known as the Affordable Care Act. The purpose of the legislation is to assure that all Americans have access to affordable health insurance.The key reforms in the Affordable Care Act should significantly decrease barriers for obtaining health coverage as well as accessing needed health care services.After the legislation is fully implemented in 2014, all Americans will be required to have health insurance through their employer, through a public program such as Medicaid or Medicare, or by purchasing coverage from a state-based health insurance exchange.Bars health plans from:Denying coverage because of pre-existing medical conditions.Dropping the coverage of people who become sick.Charging higher premiums because of health issues.Requires large employers to:Provide health insurance, or be subject to potential penalties.Encourages small employers to:Provide coverage in exchange for tax credits.Requires individuals to:Obtain health insurance or pay a penalty, unless they qualify for certain exemptions.Allows parents to:Extend their health insurance to children up to the age of 26.Depending on your income, family size, and state of residence, you may have several coverage options, including financial help (subsidies) if you cannot afford to purchase health insurance. The following are examples of coverage options - the income levels are approximate and may be different in your state. Typically, the income levels are based on a percentage of the Federal Poverty Level.Example 1: Eligible for MedicaidAnnual income:up to $14,400 for an individualup to $29,300 for a family of fourComments:Low-income Americans who are U.S. citizens, as well as many legal immigrants, can enroll in their state's Medicaid program.Your state may impose some minimal level of out-of-pocket expenses, such as a copayment of $1 to $5 for a doctor's visit or for selected services.Example 2: Eligible to buy a subsidized health plan through a state-based health insurance exchange (starting in 2014)Annual income:up to $43,320 for an individualup to $88,200 for a family of fourComments:Health plans that participate in an exchange must offer a package of "essential" benefits that covers at least 60% of health care expenses.If you buy your health insurance in an exchange, your share of the premium may not exceed a certain percent of your income, ranging from 2% to 9.5% depending on how much you make each year.Example 3: Required to buy private coverageAnnual income:$43,321 and above for an individual$88,201 and above for a family of fourComments:You are not eligible for a subsidy, or financial assistance at this salary level.If you remain without health insurance, you may have to pay a penalty of up 2.5% of your income unless you qualify for certain exemptions.Depending on the type of health insurance you currently have, you will have multiple coverage options with the implementation of the Affordable Care Act. The following briefly describes what you can expect if you have a health plan from your employer, buy your own individual policy, or are currently or will become eligible for Medicare in the next several years.If your source of health coverage is an employer plan, these are some of your options:Stay in your employer plan: If your employer continues to offer health insurance, you can keep it.Shop for a health plan through the health insurance exchange in your state: If you own a small business, or your employer offers only minimal benefits, or you must pay more than 9.5% of your income in premiums, you can look for better options in the exchange.If your source of health insurance is an individual policy that you have purchased for yourself and/or your family, these are your options:Keep your current plan: If your health plan continues to offer the same coverage, you can renew it. However, new health insurance policies must comply with federal minimum coverage standards; older health plans that don't meet these standards cannot enroll new customers.Shop for coverage through the insurance exchange in your state: If your income is below $43,320, you may qualify for federal tax credits to help offset the cost of your premium.If you are on Medicare, your options may not change significantly, but your drug-related costs may decrease, and your access to services may improve:Your basic (or guaranteed) benefits and eligibility will not change: All Americans who qualify under today's rules will continue to do so.Medicare Advantage: Federal subsidies for Medicare Advantage plans will be eliminated, which may cause the private insurers who sell these plans to cut benefits, reduce enrollment, or raise premiums.Access to services: Physicians who treat Medicare patients in rural areas, inner cities, and other underserved areas will be paid a 10% bonus, which may make it easier for you to obtain care. However, there will be more people able to obtain health care, which might limit access to care because of a shortage of primary care physicians.Prescription drug coverage: The coverage gap (Medicare Part D doughnut hole) will be phased out, beginning with a $250 rebate in 2010.More Information: For details about the Affordable Care Act, including access to the entire law and regulations, take a look at HealthCare.gov.

Laid Off? How to Keep or Find Affordable Health...

aIf you have been laid off or if your company is closing, you may be worried about losing your employer-based benefits, particularly health insurance. Having no health insurance can be a frightening experience, especially if your employer health plan provides coverage for your family. Also, you may be most concerned if you or a family member has a chronic illness that requires frequent visits with your doctor or the need for expensive prescription medications.It is important to try and find some type of health insurance plan during your period of unemployment. If you or a family member seeks care without health insurance coverage, you’ll be stuck paying the entire bill. You may be taking an unnecessary financial risk by not having health insurance. While going without health insurance may seem cost-effective when you have no or less income, it may not be! The leading cause of personal bankruptcy in the United States is illness and medical bills.Fortunately, if you are handed a pink slip, you have a number of options to remain insured for some period of time following your layoff. Getting health insurance through your spouse’s (or domestic partner’s) employer may be your most cost-effective option. Many employer health insurance plans allow their employees to add family members who have been laid off – your spouse can add you to her/his plan. If your job provided the health insurance for the entire family, your spouse can initiate coverage for the family.Most health insurance plans provided by large companies have “special enrollment” provisions that allow the immediate addition of a family member without having to wait for the annual enrollment period. If you are able to use your spouse’s health insurance, make sure to apply within 30 days of being laid off—some health insurance plans may not automatically accept you for immediate coverage or may limit coverage for a preexisting medical condition if you wait for more than 30 days.If your former employer has 20 or more employees, the company is required by a 1986 federal law to offer you the option to pay for an extension of your health insurance coverage for at least 18 months. This law is known as COBRA, which stands for Consolidated Omnibus Budget Reconciliation Act.At the time you are laid off, your employer must inform you in writing about your rights under COBRA. You then have 60 days from the date of the notice or the date your health insurance ended to enroll, or sign up for coverage under COBRA. If your company went out of business or went bankrupt, COBRA will not be available.When you sign up for COBRA, you will continue to have similar health insurance and the same health plan benefits that you had while employed. However, you must pay the health insurance premium that your former employer was paying for you. The employer may also add a 2% administrative fee.Depending on your individual circumstances, COBRA can be very expensive. If you are getting coverage for yourself, you may have to pay up to $400 per month; family coverage may be more than $1000 per month. These amounts will vary depending on the benefits provided by your employer’s health plan.$1,000 every month is a lot of money and probably more than you expected to pay, especially if you also lost your income and are collecting unemployment insurance. For some workers, the COBRA payments can amount to more than 60 to 70 percent of their monthly unemployment check. Many laid-off workers who are eligible to continue their health insurance coverage through COBRA cannot afford to do so.If you cannot afford COBRA, there may be other health insurance options that will provide the health coverage benefits that you need for you and your family.COBRA is regulated by the U.S. Department of Labor. The department’s website has a list of frequently asked questions about COBRA. You also can call 866-444-3272 for information or assistance.Note: COBRA will not change with the passage of the health reform legislationYou can buy health insurance directly from a health insurance company, such as Blue Cross, or through an insurance agent who represents an insurance company. In most states, you can buy health insurance online from reliable organizations (such as eHealthInsurance). You should consider consulting with a licensed insurance agent (this may be the same agent who handles your auto and homeowners insurance) who may be able to help you find a health insurance plan that is less expensive than COBRA and still fits your needs.You can easily compare premiums and health benefits online. Health insurance companies vary in what type of health plans they offer and by shopping around you may be able to save money. For example:John Skillset, age 36, was laid-off from a middle management position at an investment banking firm. His family coverage through COBRA is $1150 per month. He was able to get adequate coverage for his family from a not-for-profit insurance company for $785 per month. Although this plan requires that he pay for the first $3000 of medical expenses (the deductable), his family is healthy and has had low medical costs in the past.Jenny Techwhiz, age 24, was laid-off during a downsizing at a computer software company. Her individual coverage through COBRA is $370 per month. She was able to find a special plan from Blue Cross for people ages 18-26 for $280 per month.You also may be able to save money by purchasing group health insurance through an association such as a professional or trade organization, college alumni association, a fraternal organization, club membership, or a religious group. Health plans provided by these groups are generally less expensive than individual health insurance coverage.Page 2 includes information about the impact of the health reform legislation passed in March 2010, Short Term Health Insurance Coverage, and Low-Cost and Free Options.