It seems as if health care reform is here to stay, so it’s important to understand how it affects you. Implemented in 2010, the Affordable Care Act (ACA) has already had a major impact on the health care industry, and there’s even more to come. Changes were set up in progressive fashion to allow the health insurance industry and consumers to not only get used to the ACA’s new guidelines and laws, but also to help identify any forthcoming problems. Basically, some changes already went into effect as “guinea pig” experiments. Between changes that have already gone into effect and those quickly approaching, it doesn’t matter how much money you make or who you work for — health care reform has big changes for everyone. Despite all the focus on health care reform, many people still don’t completely understand what it will mean for them. It’s understandably confusing, and additionally, reform won’t have the same effects on everyone. Here are some of the most important ACA changes and what they’ll mean for a variety of different people.
1: Individual Mandate: Possibly the largest and most controversial change from health care reform requires everyone to carry some form of health insurance, and if you don’t, there will be a price to pay. Of course, this refers to the dreaded “penalties” that employers and employees face, as individuals who don’t carry health insurance and employers with more than 50 employees who don’t offer insurance to employees will be charged a “penalty” tax come tax time. However, there are exemptions. To name a few, prisoners, members of Indian tribes, and those of certain religions who are opposed to any or all health insurance benefits won’t be penalized. There are multiple ways to fulfill health care requirements, and since this requirement won’t be enforced until Jan. 1, 2014, there’s plenty of time to start exploring those other available options and the law’s guidelines as well.
2: Insured Young Adults: In 2010, one of the most influential changes for young adults took place. The ACA states that health insurance plans must allow young adults to remain on their parent’s insurance plan until the young adult turns 26 or gets another form of health insurance. This is true even if the young adult doesn’t live at home, isn’t claimed as a dependent by parents, is a student, and is even the case for married and unmarried children, although their spouses and grandchildren wouldn’t be eligible for coverage. Once a young adult’s 26th birthday rolls around though, this won’t be an option anymore. With a current epidemic of young adults living with their parents after college due to high costs of living, lower incomes, and college loan repayment, this is a welcome offer for those under 26. This is especially true since approximately 30% of young adults are uninsured according to the U.S. Department of Labor. However, this is only if the parents agree to it, so some young adults still may not have this as an option.
3: Guaranteed Issue: This change is going to mean a lot to anyone who’s been denied coverage because of a pre-existing condition. In 2014, insurance companies will no longer be able to deny coverage or charge higher premiums to those with pre-existing conditions. Additionally of particular importance is that insurers can’t charge higher premiums based on gender. A federal Pre-Existing Condition Insurance Plan was set up to tide people over until 2014, but right now, that’s currently suspended until further notice.
4: Medicaid: If you thought Medicaid and Medicare issues, complications, and concerns were confusing and overwhelming, prepare yourself. This federally-funded health insurance program will see many changes. One already took place in January 2013 in the form of pay raises for primary care doctors who treat Medicaid patients. Obviously that’s one positive aspect in many people’s eyes, as more people are now covered. Previously, doctors were paid less for Medicaid patients. Additionally, if state Medicaid programs offer free or discounted preventive care, the federal government will pick up any tabs.
5: Medicare: This federal health insurance plan is getting an overhaul too. Made for those 65+ or those who meet specific qualifications, this program has already delivered cheaper prescription drugs and lower cost preventive care. In January 2013, Medicare began using bundled payments instead of pay-per-service. 2013 also brought a higher Medicare tax for those earning more than $200K, increasing it from 1.45% to 2.35%.
Additionally, seniors will be able to get a $250 rebate to help bridge the gap between Medicare prescription drug plans and needed expenses. This gap is generally anywhere around $2, 700 (the limit for Medicare prescriptions) and catastrophic prescription coverage, beginning at $6,154.
Although the $250 rebate sounds like a nice proposition at first, one must consider the high price tags of many medications, including generic ones. This is especially true for seniors, who are more likely to be on super expensive medications. For example, Plavix, a heart medication that helps prevent blockages in arteries, costs around $400 a month. When such prices are combined with the annual income of many seniors, it could mean $250 would only be enough to put gas in their cars in order to get to get the pharmacy to pick up their expensive meds.
6: State Health Exchanges: One of the most significant changes the ACA mandates is the implementation of health insurance marketplaces in every state. This should be independently run so insurance companies have no influence, thus allowing individuals, families, and small business owners the opportunity to compare insurance plans and prices.
7: Subsidies: If you can’t afford insurance, the ACA developed a plan so you can still purchase insurance and not face any penalties. If your income is between 100% and 400% of the poverty line, currently $23,550 for a family of four, the maximum amount you’d pay monthly for health insurance is established and could appear in the form of advance tax credits. However, be aware that you won’t also receive this credit during normal tax periods. This will take place in 2014, and you’ll find out if you’re eligible through individual state’s health care exchanges.
8: Annual Limits: On Jan. 1, 2014, insurance companies will no longer be able to set annual limits on coverage amounts. While this may not be a concern when you’re healthy, a serious accident can bring you dangerously close to your limits and after that, you’re responsible for all costs. In 2014, that will no longer be true.
9: Standard Disclosure Form: Already implemented in September of 2012, this form aims to make buying health insurance more consumer friendly (or as much as it can be.) It will have to list — in understandable terms — benefits and coverage details, as well as co-payments, deductibles, and out-of-pocket limits. It will also have to show you how much things like having a baby or treating Type 2 diabetes will cost.
10: Physician Pay: In 2015, how physicians get paid will be restructured. Rather than making money on the number of procedures performed, physicians will be paid based on the value of their health care and how healthy patients are — talk about ultimate wellness program participation and doctor grades. Of course, some doubt the straightforward, positive nature of this bill, but there’s almost a year before these changes are made.
The biggest ACA changes have yet to hit, but when they do, everyone should be prepared. Health insurance can already be confusing, but it’s possible that it may get more complicated before getting easier.
Follow Desiree on Twitter @DesireeBaughman.
For more information on the ACA, visit the federally sponsored website HealthCare.gov.