Affordable Care Act
Health-Care Reform FAQ: The Basics
Published on April 12, 2013
We’ve all heard about health-care reform, but it’s no easy task to decipher the information being thrown around in the news. To understand how the changes will impact you, it is crucial to know the basics of the new law.
Just be aware that the rules have been constantly tweaked and modified, so the below information isn’t set in stone.
Q: What has changed in 2014?
A: Many provisions of the Affordable Care Act started in 2014, but perhaps the biggest change is the Individual Mandate that requires most individuals who can afford it to have a health plan that meets specific coverage standards.
In 2014, if you don’t have employer coverage and choose not to buy health insurance on your own, or if you enroll in a plan that doesn’t meet the coverage criteria, you may be required to pay a penalty.
A second change this year that makes the Individual Mandate more appealing is the availability of federal subsidies to make individually-purchased health insurance more affordable for qualified consumers.
Something else that is different now in 2014 is the establishment of an open enrollment period — the next one starts November 15, 2014, and continues through February 15, 2015.
Outside of the open enrollment period (which occurs annually), you’ll only be able to enroll in an individual health insurance plan when a qualifying event occurs. These events include the birth of a child, marriage, or the loss of employer-based health insurance coverage, among other things.
Q: Is it true that I can no longer be declined for coverage based on my medical history?
A: Yes, that is true. Starting January 1, 2014, insurers can no longer decline your health insurance application based on your medical history. It’s true that you cannot be dropped from coverage if you get sick, and insurance companies can no longer impose a lifetime dollar limit on coverage for most medical services.
Q: Can I be required to pay more for my coverage based on my health status now?
A: You cannot be rated up based on your health status, but you can still be required to pay higher premiums based on your age, tobacco use, and where you live.
Q: What is a subsidy and how do I know if I qualify?
A: In the context of health reform, a subsidy is government assistance to help you afford health insurance. Under the Affordable Care Act, the government will grant subsidies in the form of premium tax credits to people who fall within a certain income level. These tax credits will be applied up-front to the monthly premium you pay for coverage.
As of 2014, you may qualify for a subsidy if your household income is between 133 percent and 400 percent of the Federal Poverty Level (FPL). The amount of tax credit you’ll receive will be determined by where you fall within the FPL guidelines. To see the income requirements for subsidy eligibility, visit the Families USA website where the 2013 Poverty Level Guidelines are displayed.
Tax credits can only be applied to qualified health plans that are purchased through a government health insurance exchange or qualified online insurance marketplace partnering with a government exchange.
Q: What is a Health-Care Exchange and how will it work?
A: Under the Affordable Care Act, exchanges are government-sponsored websites where individuals, families and small businesses can go to shop for and purchase health insurance. They first launched in October 2013, for coverage starting in January 2014.
While exchanges aren’t the only places to buy coverage (you can still shop with local agents or online marketplaces like eHealthInsurance.com), subsidies are currently processed only through exchanges. Every health insurance plan in the new exchange will offer comprehensive coverage, from doctors to medications to hospital visits. You’ll be able to compare your insurance options online, based on price, benefits, quality, and other features that may be important to you.