It’s 98 days and counting until online marketplaces are up and running as part of the federal health law known as Obamacare. People will be signing up for insurance coverage on October 1, to be effective January 1, 2014.
The question is how affordable will coverage be for the healthy as they support the sick, who can no longer be turned away.
Most Americans will be required to carry insurance in 2014 or pay a $95 penalty. If the low penalty keeps many from carrying insurance, insurance companies will pass along higher insurance premiums and make coverage for all less affordable over time.
Katherine Stoll, Deputy Director of Families USA, who is also on the board of West Virginians for Affordable Health Care (WVAHC), outlined how the Affordable Care Act helps to make health insurance affordable.
Stoll is a West Virginia native makes her home in the Mountain State and spends as much time there as possible.
“The Affordable Care Act guarantees that more Americans can afford health coverage by creating consumer protections and providing financial assistance to help people purchase coverage. While many protections already exist for those with job-based coverage, new protections will now apply for people who have to purchase insurance on their own in the individual market. These protections, combined with financial assistance, ensure that consumers have access to fairer, more comprehensive, and more affordable health coverage,” said Stoll.
According to information about healthcare reform in various reports by Stoll, changes include the following:
- Those with pre-existing conditions, can’t be denied coverage or charged more if they do get sick. Approximately 426,000 West Virginians under the age of 65 have a pre-existing condition, 29.4 percent of the population.
- Individuals and families with incomes up to four times the federal povertylevel (up to about $46,000 for an individual and about $94,000 for a family offour in 2013) will be eligible for financial assistance, in the form of premium tax credits, to help them buy health coverage in their state’s insurance marketplace starting in 2014. The help will be based on a sliding scale: lowest-income individuals and families will receive the largest credit. The new premium tax credits will protect individuals or households from spending more than a certain set share of their income on health insurance premiums. This financial assistance is referred to as “premium tax credits,” a person doesn’thave to owe taxes to receive the help. The funds are available to directly pay the insurance company when consumers buy insurance.
- Many states will expand their Medicaid programs in 2014, providing a new coverage option for millions of people who earn less than 138 percent of the federal poverty level (about$16,000 for an individual and $32,000 for a family of four in 2013).
- Fairer and More affordable health coverage for women since currently, 37 states allow gender rating in the individual market, which meansinsurers can charge women and men different premiums for identical coverage. In the capital cities of these states, 92 percent of bestselling plans charged 40-year-old women more than they charged 40-year-old men for the same plan. Maternity coverage cannot explain the difference in premiums because only 3 percent of these plans included maternity services. Under the Affordable Care Act, beginning in 2014, this unfair practice will no longer be permitted and thecosts of coverage for men and women are required to be equal.
- Fairer and More Affordable Health Coverage for Older Americans In 48 states and the District of Columbia, insurers are allowed to charge older people higher premiums than younger people.7 According to America’s Health Insurance Plans (AHIP), premium rates for older individuals are often five times the rate charged to younger individuals. The Affordable Care Act places limits on how much insurers can charge older adults: Insurers will only be able to charge older adults a maximum of three times the premium rate.
- The Urban Institute estimates that 96 percent of young adults (aged 21 to 27) who buy single policies through the new individual insurance marketplaces will be eligible for premium tax credits to help them afford health coverage. Young adults have more coverage options: get coverage through an employer, and they can continue to do so in 2014; stay on their parents’ plans until they are 26 years old; in states expanding their Medicaid programs in 2014, many young adults with low incomes will be eligible for coverage; and, young adults can shop for coverage in a new health insurance marketplace to purchase a “catastrophic plan,” which has higher deductibles and lower premiums (but they cannot use premium credits to purchase these thinner plans).
- Under the Affordable Care Act, plans will provide much better protection. New health insurance plans already must offer preventive care at no cost (that is, people don’t have to pay copayments, a deductible, or other cost-sharing for preventive services). Plans are no longer allowed to set lifetime dollar caps on coverage, and annual dollar limits on services will not be allowed beginning in 2014.
- Also in 2014, plans in the individual and small group markets will have to cover a certain set of benefits, referred to as essential health benefits, ranging from hospital coverage to prescription drugs to mental health care. Together, these provisions ensure that when consumers buy a health plan, they get real coverage that protects them from excessively high costs when they need care.
To learn more about how premium tax credits work, see the report, Help Is at Hand: New Health Insurance Tax Credits for Americans, available online at http://familiesusa2.org/assets/pdfs/premium-tax-credits/National-Report.pdf.
Visit healthcare.gov or call the 24-hour-a-day call center to prepare for open enrollment, 1-800-318-2596.