Awaiting The Court Ruling, A Consumer Guide To Health Reform Law
June 21, 2012
June 21, 2012
Kaiser Health News has put out a great FAQ to help you dominate the water cooler discussion about the Supreme Court decision regarding the Affordable Care Act.
From the KHN post by Mary Agnes Carey, KHN Staff Writer, Jun 20, 2012
The lawsuit against the health law strikes at its key elements, including the “individual mandate,” a requirement that most Americans have health insurance by 2014 or pay a fine, and an expansion of the Medicaid program. The full impact won’t be known until the court rules.
For families the penalty would be $2,085 or 2.5 percent of household income, whichever is greater by 2016 and beyond. The requirement to have coverage can be waived for several reasons, including financial hardship or religious beliefs.
Millions of additional people will qualify for Medicaid or federal subsidies to buy insurance under the law.
You may have seen some law-related changes already. For example, most plans now ban lifetime coverage limits and include a guarantee that an adult child up to age 26 who can’t get health insurance at a job can stay on her parents’ health plan.
Health plans can’t cancel your coverage once you get sick – a practice known as “rescission” – unless you committed fraud when you applied for coverage.
Children with pre-existing conditions cannot be denied coverage (this will apply to adults in 2014). Insurers will have to provide rebates to consumers if they spend less than 80 to 85 percent of premium dollars on medical care.
Some existing plans, if they haven’t changed significantly since passage of the law, do not have to abide by certain parts of the law. For example, these “grandfathered” plans can still charge beneficiaries part of the cost for preventive services.
If you’re currently in one of these plans, and your employer makes significant changes, such as raising your out-of-pocket costs, the plan would then have to abide by all aspects of the health law.
These premium subsidies will be available for individuals and families with incomes between 133 percent and 400 percent of the poverty level, or $14,856 to $44,680 for individuals and $30,656 to $92,200 for a family of four (based on current poverty guidelines).
However, if you have a firm with 50 or fewer people you won’t face any penalties.
In addition, if you own a small business, the health law offers a tax credit to help cover the cost. Employers with 25 or fewer full-time workers who earn an average yearly salary of $50,000 or less today can get tax credits of up 35 percent of the cost of premiums. The credit increases to 50 percent in 2014.
That coverage gap will be closed entirely by 2020. Seniors will still be responsible for 25 percent of their prescription drug costs.
The law also has expanded Medicare’s coverage of preventive services, such as screenings for colon, prostate and breast cancer, which are now free to beneficiaries. Medicare will also pay for an annual wellness visit to the doctor.
The health law reduced the federal government’s payments to Medicare Advantage plans, run by private insurers as an alternative to the traditional Medicare. Medicare Advantage costs more per beneficiary than traditional Medicare. Critics of those payment cuts say that could mean the private plans may not offer many extra benefits, such as free eyeglasses, hearing aids and gym memberships that they now provide.
That said, there are some new taxes and fees. For example, starting in 2013, individual with earnings above $200,000 and married couples making more than $250,000 will pay a Medicare payroll tax of 2.35 percent, up from the current 1.45 percent, on income over those thresholds. In addition, higher-income people will face a 3.8 percent tax on unearned income, such as dividends and interest.
Starting in 2018, the law will also impose a 40 percent excise tax on the portion of most employer-sponsored health coverage (excluding dental and vision) that exceeds $10,200 a year and $27,500 for families. The tax has been dubbed a “Cadillac” tax because it hits the most generous plans.
For example, the law created high-risk insurance pools to help people purchase health insurance. But enrollment in the pools has been less than expected. As of March 31, 61,619 people had signed up for the high-risk pools, but the program, which began in June 2009, was initially expected to enroll between 200,000 to 400,000 people. The cost and the requirements have been difficult for some to meet.
For example, applicants must be uninsured for six months because of a pre-existing medical condition before they can join a pool. And because participants are sicker than the general population, the premiums are higher.
Enrollment has increased since the summer, after the premiums were lowered in some states by as much as 40 percent and some states stepped up advertising.
Another feature of the law that hasn’t worked as envisioned is its long-term care provision. The Community Living Assistance Services and Supports program (CLASS Act) was designed for people to buy federally guaranteed insurance that would have helped consumers eventually cover some long-term-care costs. But last fall, federal officials effectively suspended the program even before it was slated to begin, saying they could not find a way to make it work financially.