|Health Insurance Exchange 101|
|Health insurance exchanges, a critical provision of the reform law, will go into effect on Jan. 1, 2014. These state-based marketplaces will provide one-stop shopping for individuals and small businesses looking for health insurance policies. States may set up their own exchange, partner with the federal government, or fully adopt the federal government’s exchange. Some policies will be basic but still must contain essential benefits (Question 6), while others will have more bells and whistles. Policies will be categorized as bronze, silver, gold, and platinum, depending on the level of coverage they provide. Bronze plans will generally cover 60 percent of expected health costs, silver 70 percent, gold 80 percent, and platinum 90 percent. |
Most Americans will be eligible to enroll in policies through the insurance exchanges. People with incomes between 100 and 400 percent of the federal poverty level ($23,050 to $92,200 for a family of four in 2012) who are not eligible for Medicaid, Medicare, or other programs and do not have access to affordable coverage through their employer may be eligible for government health care subsidies to help pay for the insurance they buy through the exchange. These subsidies will be issued in the form of tax credits, received either as a lump sum in an annual tax refund or incrementally throughout the year. These people may also receive help with their insurance co-pays.
The health care reform law is by and large constitutional, the Supreme Court ruled on June 28. But what does the law, the Patient Protection and Affordable Care Act, mean for Americans living with diabetes? While some of the law’s provisions are already in place, many others will take effect in the next couple of years. Here are answers to seven key questions about health care reform.
1. What does it mean that the individual mandate was ruled a tax by the court?
In practice, nothing. The individual mandate is the part of the health care reform law that requires most people who don’t have health insurance to purchase it or pay a fine to the government beginning in 2014. Whether it’s considered a tax or a penalty doesn’t really matter. The mandate is intended to make sure all people are in the insurance pool, so that people with diabetes and other health conditions can have access to health insurance at a reasonable cost.
2. How does health care reform affect the ability of people with diabetes to get health insurance?
Before health reform, it was lawful to refuse to insure a person with diabetes or charge that person extremely high rates—and this was common practice. Starting Jan. 1, 2014, health insurance companies won’t be able to deny coverage to people with diabetes, or any preexisting medical condition, nor will they be able to charge them higher premiums because they have diabetes. A provision preventing companies from denying insurance for preexisting conditions is already in effect for people under the age of 19. When the law is fully implemented, insurance plans won’t be able to discriminate on the basis of gender, health status, or disability.
3. Can I keep the health care plan that I have now?
You may see some changes made as your insurer complies with the Affordable Care Act, but the law generally does not require you to change plans. People who were enrolled in the same health insurance plan prior to March 23, 2010, the day the Affordable Care Act became law, may end up in a “grandfathered health plan,” which is exempt from many insurance reforms. However, even grandfathered plans must comply with some elements of the law, including ending discrimination based on preexisting conditions, eliminating lifetime limits on benefits, and covering dependents under a parent’s plan until age 26. Certain routine changes to these plans are allowed, but significantly cutting benefits or significantly raising how much the insured must pay will result in the plan losing its grandfathered status.
|Health Care Reform Fact|
|Most insurance companies must spend at least 80 percent of the premiums they collect on direct medical care or on improving the quality of care. If they don’t, policyholders get a rebate!|
|If you support the health care reform law, you can ask your member of Congress to vote to defend it against repeal. If you want expanded Medicaid coverage in your state, talk to your state’s elected officials. Essential health benefits, which will determine what the base coverage will be for people with diabetes, will also be decided at a state level. To get involved, go to diabetes.org/takeaction.|
4. Will health care be rationed under the Affordable Care Act?
Americans will still have the same access to medical care through their existing insurance plans and the freedom to choose their health care providers (as allowed by their plans). Some argue that, under current practices, insurance companies already ration health care. For example, insurers may deny coverage of services that doctors say are necessary, drop coverage when policyholders’ health needs get expensive, or deny coverage to people with preexisting conditions. Insurers now can also refuse to pay for coverage after certain annual limits have been reached. Not so under health care reform; as of 2014, insurers in many cases will have to provide at least a set of essential health benefits, and lifetime and annual dollar limits on benefits will be a thing of the past.
5. How is the law going to make insurance plans affordable?
Just over half of Americans get their health insurance through an employer, and an additional 15 percent are covered by Medicare. For them, the Affordable Care Act will not necessarily mean big changes. For people who now buy their own health insurance or do not have insurance, however, the law is creating insurance exchanges (box, Health Insurance Exchange 101), a marketplace where people can shop for a plan that must meet certain minimum standards. The exchanges are intended to create competition, which proponents say will bring down health insurance premiums. People without access to affordable employer-based insurance, Medicare, or Medicaid may be eligible for premium and cost-sharing reductions (based on income and other factors) to help them buy insurance through the exchanges.
|No-Cost Preventive Care|
Under the health care reform law, certain preventive services must be covered under new plans at no cost to the policyholder (with no co-pays or other fees). These include, among other things:
Aspirin (when used to reduce the risk of heart attacks and strokes)
6. Will the affordable insurance plans provide good coverage?
The health care reform law outlines a set of essential health benefits, which many insurance plans will have to meet. Some plans are exempt from this requirement, including grandfathered plans, self-insured plans, and large group plans offered by employers that are outside the exchanges. There will be some state-to-state differences in what is deemed essential, but all nonexempt plans must cover at least these 10 categories of health care services: ambulatory patient services; emergency services; hospitalization; maternity and newborn care; mental health and substance use disorder services, including behavioral health treatment; prescription drugs; rehabilitative and “habilitative” services and devices; laboratory services; preventive and wellness services and chronic disease management; and pediatric services, including oral and vision care.
7. What is happening to Medicaid?
In 2014, Medicaid is expanding under the Affordable Care Act to include more low-income adults who don’t have dependent children. Individuals under 65 years of age with incomes below 133 percent of the federal poverty level will be eligible for Medicaid under the law. (The federal poverty level for an individual is $11,170 in 2012.) These changes were upheld by the Supreme Court, but states can still decide for themselves whether to adopt them. That’s because the court ruled that the federal government may not withhold current Medicaid funds from states that refuse to expand Medicaid to this larger group of people.
|How Will The Law Affect Me?|
|Here are examples from the Kaiser Family Foundation of how the health care reform law would affect people in typical situations. |
|Recent Graduate | Age: 23|
Family size: 1
Occupation: First job, no employer-provided coverage
Household income*: $23,000
Insurance: Under the Affordable Care Act, this young person can remain on a parent’s health insurance plan until the age of 26. This worker could also purchase a health insurance plan on
an exchange beginning in 2014.
|Single Worker | Age: 30|
Occupation: Full-time job without coverage
Household income*: $15,000
Family size: 1
Insurance: This worker will be eligible for Medicaid under the Affordable Care Act, so long as his or her state implements the law’s expansion of Medicaid. If not, this worker may receive subsidies that cover most, if not all, of the cost of insurance purchased through an exchange.
|Worker With Coverage | Age: 45|
Occupation: Full-time job with benefits
Household income*: $45,000
Family size: 4
Insurance: This worker can stick with current coverage or pick a new plan from an exchange. If the worker pays 9.5 percent or more of income toward the employer-based plan, or if that plan fails to meet certain benefit standards, he or she would be eligible for tax credits to purchase a plan on a health insurance exchange.
|Entrepreneur | Age: 47|
Household income*: $150,000
Family size: 4
Insurance: Without an employer-provided insurance plan, the entrepreneur would probably turn to the insurance exchanges for coverage.
Annual premium: $15,365
Tax credit**: $0
Policyholder’s payment: $15,365
|Family Breadwinner | Age: 50|
Occupation: Job without health benefits
Household income*: $50,000
Family size: 4
Insurance: This person is eligible to purchase insurance for the family through the exchanges and to receive government subsidies in the form of tax credits.
Annual premium: $16,858
Tax credit**: $13,472
Policyholder’s payment: $3,386
|Older Adult | Age: 66|
Household income: Any amount
Family size: 1
Insurance: This person remains eligible for health insurance through Medicare, as are all Americans ages 65 and older regardless of income.
|Source: Kaiser Family Foundation (healthreform.kff.org/SubsidyCalculator.aspx); estimates based on Congressional Budget Office data. *Income is in projected 2014 dollars. **Tax credits may vary by region.|