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.
Highlights of the Affordable Care Act
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.
Changes for Americans with No Health Insurance
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 Medicaid
- up to $14,400 for an individual
- up to $29,300 for a family of four
- 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)
- up to $43,320 for an individual
- up to $88,200 for a family of four
- 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 coverage
- $43,321 and above for an individual
- $88,201 and above for a family of four
- 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.
Changes for Americans with Health Insurance
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.
Participate in long-term care insurance: A new payroll deduction at work will allow you to qualify for long-term care benefits after a five-year waiting period. The program is voluntary; however you will be enrolled automatically if you do not opt out.
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.