Obamacare? Affordable Care Act? What if you already have insurance? What if you can't afford insurance? Let's cut through the chaos and find out how the new law will affect you and your family.
What is it?
President Obama signed the Affordable Care Act (ACA) into law in 2010 to increase the quality of healthcare and decrease costs. The ACA aims to lower rates for the uninsured by expanding public and private health coverage, in multiple phases lasting through 2020.
It is the biggest change in healthcare since the creation of Medicare and Medicaid. Here are some fundamental goals of the ACA:
- Easier to get coverage
- Financial help for those meeting income requirements
- Improved consumers' rights
- No coverage denial for preexisting conditions, gender, or residence
- Essential benefits mandatory in all health insurance plans
How the ACA affects Medicaid
The most significant change will be seen with Medicaid, the federal program that pays healthcare costs for people with limited income. Historically, millions have been ineligible for Medicaid. However, the ACA has raised the income limit to 138 percent of the 2012 federal poverty level (that level is about $12,000 for a single adult, and $15,000 for a couple). Before, adults without dependent children could not qualify, and income included assets. Now eligibility is determined by Moderate Adjusted Gross Income (MAGI). This is income after deduction and other credits; it does not take into account most assets (such as vehicles, etc.). For most, it will be the same as the adjusted gross income (AGI). You can find this number on your tax return from last year.
Many of the new provisions of Medicaid are optional. States that opt in will provide additional home- and community-based long-term services and supports. Even if your state does not choose to expand its Medicaid program, it must change the enrollment process and eligibility requirements. Find out what is offered in your state at www.healthcare.gov.
I don't qualify for Medicaid. What are my healthcare options?
If you do not get insurance through an employer or you are self-employed, unemployed, or have been denied coverage, you can seek coverage through the Marketplace or Exchanges, a collection of participating plans in your area. There are four different levels of coverage: bronze, silver, gold, and platinum. Levels do not indicate quality of care but the amount the patient pays out of pocket and for premiums. A person with a bronze plan may have 60 percent of healthcare costs covered and pay 40 percent out of pocket. Cost information for the levels became available on October 1, 2013, the day that open enrollment began. Open enrollment ends March 31, 2014. Coverage begins January 1, 2014 (or as soon as you enroll after that date). If you qualify for Medicaid, you may enroll at any time. You can find state-by-state Marketplace information at www.healthcare.gov.
Can I get help to pay for insurance?
There are options outside of Medicaid for people who have to buy their own coverage. If your insurance costs more than 9.5 percent of your income or does not cover 60 percent of your medical costs, you may qualify for tax credits to help you pay for your health insurance. These tax credits are only for health coverage purchased through the Marketplace. If you are single and make less than $46,000, in a family of three making less than $78,000, or in a family of four with less than about $94,000 in income, you may get a tax credit from the government to help you pay for your premium. Then you can use the credit as a deduction when you file your taxes.
In order to pay for this additional coverage, more healthy people are needed to pay for coverage. Increasing the risk pool enables more people to get preventive care and theoretically decreases the amount spent on care in the future. The ACA includes a financial penalty to ensure that everyone chips in to keep the program viable. In 2014, almost everyone will need coverage or will pay a penalty in their 2014 taxes. The first year the penalty is $95 for each adult and $47.50 for each child (up to $285) -- or 1 percent of your household income, whichever is greater.
Penalties will go up each year and are expected be significant once the program has grown. You will not have to pay a penalty if you:
- Were uninsured for less than three months.
- Are not required to file a federal tax return.
- Would qualify for Medicaid, but your state did not expand the program.
There will be other ways to avoid this penalty; call your state-specific exchange or the federal exchange for additional information.
What do I need to do to get health coverage under the Affordable Care Act?
This is an exciting time for people who have been responsible for paying for their own or their loved ones' healthcare. The best action you can take is to be prepared; get started by taking these three steps:
1. Organize your documents and be sure to include:
- Social security numbers (or document numbers for legal immigrants in your household)
- Employer and income information for every member of your household who needs coverage (pay stubs, W-2s, wage or tax statements)
- Policy numbers for any health insurance plans covering members of your household
2. Complete the employer coverage tool for every job-based health insurance plan you or someone in your household is eligible for. This form is required even if you are not enrolled; it is available at www.healthcare.gov.
3. Sign up in person, online, or by phone. Some states operate their own Marketplaces. There is a menu on www.healthcare.gov that will direct you to your state's site. If the federal government operates your state's Exchange, you will still need to go to www.healthcare.gov to create an account, compare plans, and purchase insurance.
Anyone, regardless of where they live, can call (800) 318-2596 to get started and ask questions.
There have been significant wait times to enroll, and some state websites have crashed or had other technical problems. However, the bugs are being worked out and wait times are decreasing. Don't give up, and find the plan that works best for you and your loved ones.
Hear additional answers to key questions about the ACA from this segment on National Public Radio.