The new health insurance exchanges, one of the biggest pieces of the Affordable Care Act (ACA), also known as Obamacare, opened for business on October 1. Do you understand how health-care reform law affects you? We’re here to break it down for you.
1. (Almost) everyone needs health insurance.
One of the changes that affects nearly everyone is something called the Individual Mandate — a fancy way of saying that nearly every citizen must have health insurance coverage. (Medicare, Medicaid, employer-provided plans and veterans’ insurance all count.) This rule exists to get healthy people into the insurance market to keep rates affordable and to help prevent people from being driven into debt — even bankruptcy — by medical bills. (One trip to the emergency room can be all it takes to run up a massive hospital bill.) If you choose not to buy insurance, you’ll have to pay a tax penalty. There are exceptions to this rule. If your income is below the poverty level or insurance would cost you more than 8% of your income, you won’t be penalized for not having insurance.
2. It will be easier to shop for insurance.
The new law creates health insurance exchanges for people who can’t get coverage through work, or whose employer-provided plan is too expensive or doesn’t meet the law’s minimum standards. The point of these exchanges is to make it easier to choose a health plan by providing a one-stop shop to compare plans and prices. Happy with your existing insurance or prefer to buy through a broker? You don’t have to change a thing. The exchanges are just another option.
3. Insurance companies can’t deny you coverage.
In the past, it’s been hard for people with a pre-existing condition to find affordable individual health insurance. But starting January 1, 2014, insurance companies won’t be able to turn you down if you have a health condition — and they can’t charge you more than they would a healthy person your age. The ACA also expands your rights to appeal any claims your plan refuses to pay.
4. You may be eligible for help paying for insurance.
There’s a lot of debate over how the ACA will affect insurance premiums. In general, rates are expected to go up for young healthy people with existing coverage, while insurance will be more affordable for higher-risk groups. Under the ACA’s Medicaid expansion, people with limited incomes (under about $15,000 for an individual and $31,000 for a family of four) will be eligible for Medicaid, but only in states where the governor has agreed to the expansion. Also, people with incomes up to $46,000 for an individual and $94,000 for a family of four who don’t have employer-provided coverage will be eligible for discounts in the health exchanges.
5. There is one big exception to the ACA.
One major loophole exists in the benefits and protections provided by the ACA. If you are enrolled in a grandfathered plan, many parts of the ACA won’t apply to you. This includes not covering preventive care and even denying you if you have a pre-existing condition. You can check your benefits statement to find out if your plan is grandfathered — or you can check with your employer.