It’s heeere! After years of rancorous debate and endless analysis, the Affordable Care Act, also know as Obamacare, takes effect this week with implementation of the ‘Individual Mandate’ requiring most Americans to buy health insurance and the opening of exchanges designed to facilitate that rule.
Here’s what you need to know about this requirement and the implementation process.
The Health Insurance Exchange (HIX) opens on October 1st for uninsured individuals who are not eligible for Medicare, Medicaid, or CHIP. This group would include someone who is ready to retire, has the savings to do so, but isn’t yet eligible for Medicare.
Open enrollment will continue until March 31st, 2014. If you are not enrolled by that date you will not be able to get health coverage through the Exchange until the next enrollment period.
If you are not insured by January 1st, 2014, or obtain an exemption based on a life change, you will be penalized. For the first year, that the penalty is $95/adult and $47.50/child or 1 percent of the family income, whichever is greater. Over time, this fee will continue to increase and by 2016 the penalty will be up to $695/adult and $347/child or 2.5 percent of the family income.
You may be exempt from penalties if you are uninsured for less than three months of the year, if your income is so low that you can’t find insurance that will cost less than 8% of income, if your state is one of the 25 that chose not to expand Medicaid eligibility and you would qualify under the new specifications, or you are a member of a recognized religious sect that is against health insurance. It is been estimated that about 24 million people will be considered exempt in 2016.
The exchanges are essentially a marketplace designed to allow individuals to shop for health insurance as they would for car insurance or any other product. Side-by-side cost and benefit comparisons of the different tiered plans – bronze, silver, gold, platinum — will be displayed on the healthcare exchange. The lower premium plans will of course have the highest deductibles, fewer benefits and more out of pocket costs.
On average, the bronze plan covers about 60% of medical costs, which means you will pay for 40% out-of-pocket. The silver plan will cover about 70% of medical costs, the gold plan covers about 80% and platinum will cover 90%. There is also a high-deductible “catastrophic plan” available to people under 30.
The average Georgia premium for bronze will be $265 and for silver it will be $304. The average Obamacare subsidy for an individual age 26-35 with a bronze or silver plan will be $316/month. A family of four in Atlanta with an income of $50,000/year will be able to buy the bronze plan for $138/month. A 27-year-old in Atlanta who makes $25,000/year will pay $103/month for bronze or $145 for silver.
Plans sold on the exchange must include the following:
1. Ambulatory patient services
2. Emergency services
4. Maternity and newborn care
5. Mental health and substance use disorder services, including behavioral health treatment
6. Prescription drugs
7. Rehabilitative services and devices
8. Laboratory services
9. Preventive and wellness services and chronic disease management
10. Pediatric services, including oral and vision care
The potential upsides of the ACA and the exchanges boil down to this:
-Health care providers will be more directly competing in a central marketplace. This could cause them to offer more affordable, quality health care plans with better deals.
-The exchanges provide tools, such as an online cost calculator, that will help consumers make better decisions.
-Insurers can’t turn away people or charge them more because of health problems or chronic illnesses. (Sorry smokers: you will still pay higher rates.) Insurers also are banned from setting different rates based on gender.
-Middle-aged and older adults can’t be charged more than three times what young people pay.
-Most plans must cover certain preventive services. Those include routine vaccinations, vision and hearing tests for children, and screenings for diabetes, high cholesterol, colon cancer and high blood pressure.
A potential downside of the ACA:
The influx of newly insured people gaining access to routine medical care for the first time could overwhelm the health care system in some areas. Fifty-seven million Americans currently don’t have any health insurance.
Fortunately, medical school enrollment rates are on the rise and new medical schools are opening. There are 18 schools currently in various stages of development and accreditation.
No surprise, a huge new government program like the Affordable Care Act is like catnip to scammers and con men. Be careful as you navigate the system. The Department of Health and Human Services has a large team of navigators trained to help consumers understand the new reform and operate free of charge. If someone claims to be a navigator and is charging you money for their help, it’s a scam. Never give your social security number of any other personal info to someone who calls claiming to be with the Obamacare program