Questions abound on looming ‘Obamacare’
The centerpiece health-insurance marketplaces mandated by the 2010 Patient Protection and Affordable Care Act are set to debut next week.
Come Tuesday, millions of uninsured Americans will be able to go online to review options and find out whether they qualify for government-subsidized coverage through President Barack Obama’s signature law, also known as “Obamacare.”
These marketplaces, also called “exchanges,” are run by the federal government or by states. The largest health-coverage expansion since Medicare was set up in 1965, Obamacare is expected to reduce the number of uninsured Americans—estimated at 48 million— to change the options for some 20 million people who buy private insurance on their own.
Here are a few basics to consider as Obamacare ramps up.
Q: What do people without employer-provided coverage need to do?
A: Learn what’s available through the new exchanges. The federal interactive website (healthcare. gov) or call center (800-318-2596) will direct you to a site specific to your state, where you can compare plans’ benefits and costs based on your household, income and coverage needs. Counselors can walk you through the process online or on the phone. All assistance is provided free; beware of anyone who tries to charge you or use highpressure sales tactics. If you suspect fraud, call the 800 number.
Although enrollment is supposed to start Oct. 1, some exchanges could have delays. Remember, you have several months to choose a plan and sign up.
Q: What about people who buy their own coverage now?
A: Many insurers are dropping plans or changing them to conform with Obamacare’s new benefit requirements. Plans may have required changes because they had high deductibles or lacked coverage for mental-health services, for instance. According to early reports, some individuals and families are facing higher premiums, more restrictions on health providers and/or greater cost-sharing for services.
Some insurers have decided not to offer some or all of their individual plans through the marketplaces; people with private coverage may need to explore their options with the exchanges and with brokers. Some may be eligible for subsidies and savings on the marketplace, but many who had skimpier coverage or better ratings because of their age and health may wind up paying more.
Q: What range of health coverage will the exchanges offer?
A: All plans must offer at least minimum coverage for medical and hospital services, mental health and substance abuse, prescription drugs, rehabilitation care and laboratory testing. Certain prevention and wellness services will be available at no charge.
Four levels of insurance—bronze, silver, gold and platinum—differ in costs and how they’re shared. The bronze level has the lowest premium, but the consumer bears the highest share—40 percent—of covered treatment costs; platinum has the highest premium but the patient pays the lowest share—10 percent. Premiums vary by state and locality. A White House report released last week found that, among 48 states, the monthly premium for a bronze plan averaged $249 and a silver plan averaged $328—before any subsidies.
All exchanges’ health plans limit out-of-pocket costs for medical care, excluding premiums. In 2014, it will be $6,350 for individuals and $12,700 for a family. The amounts are expected to rise each year.
Q: Who’s eligible for subsidies to help pay for insurance?
A: Generally, it’s anyone making between 138 percent and 400 percent of the federal poverty level. That’s $15,860 to $45,960 for individuals or $32,500 to $94,200 for a family of four. Those making the least will pay no more than 2 percent of their income for health coverage, and subsidies will cover the rest. Those at the top end will have to pay 9.5 percent of premiums.
An interactive tool from the nonprofit Kaiser Family Foundation can help consumers estimate potential government subsidies: kff. org/interactive/subsidy-calculator.
Subsidies, calculated during the online signup, will typically come in the form of tax credits. These can be applied toward insurance premiums or taken when filing a tax return.
You’ll be able to make changes during the year if your earnings change substantially. If you underreport income, you’ll face a penalty.
Q: What should people with employer-provided insurance do?
A: Many employers are changing the amounts they ask workers to pay in premiums, deductibles and co-pays. Some are reducing worker eligibility or dropping coverage of spouses. Others will give workers a fixed amount of money to shop for insurance in exchanges. If your situation changes, you might consider Obamacare.
You may be eligible for subsidies and coverage through a health marketplace if your work-based insurance costs more than 9.5 percent of your income.
Q: Is everyone required to obtain health insurance?
A: Just about everyone faces that requirement. Obamacare exempts American Indians; undocumented immigrants; people who are jailed; have religious objections; have suffered a recent financial hardship; have incomes below the threshold for filing a federal income-tax return; or for whom the lowestpriced health plan available exceeds 8 percent of their income.
Q: What happens if you don’t obtain health insurance?
A: You’ll pay a penalty to the Internal Revenue Service. It will start at $95 a year for individuals or $285 per family, or up to 1 percent of income, whichever is higher. For each uninsured child, you’ll pay half the adult rate. By 2016, the penalty would rise to $695 per adult for individuals, or 2.5 percent of income, whichever is higher.