What Healthcare Reform Means for You
The Patient Protection and Affordable Care Act (ACA), popularly known as “healthcare reform,” passed a major hurdle on Thursday, June 28 when the Supreme Court of the United States upheld all but one of the law’s major provisions. While the court ruled that the “individual mandate” (the requirement that almost all Americans purchase health insurance coverage or pay a fine) is constitutional, it also held that the federal government could not withhold Medicaid funding from states that chose not to participate in a proposed expansion of Medicaid.
The court’s decision removed a cloud of uncertainty from efforts to implement the ACA, allowing states, health-care providers, hospitals, and insurance companies to start planning for the changes called for by the law. But after more than two years of bitter rhetoric and mudslinging from both sides, many Americans still don't know much about the potential impact of the legislation on their lives.
What will healthcare reform mean for you? Here’s a short summary of major changes the ACA calls for, and what it will mean for individual Americans and employers.
What you get:
- Health-care exchanges. By 2014, all states must offer “health-care exchanges” – organizations developed to create a more competitive, organized market in which people can buy health insurance.
- Tax Credits for Individuals. Beginning in 2014, adults under 65 years of age who purchase coverage on their own in a health insurance exchange will be eligible for tax credits if they make less than 400 percent of federal poverty level. Individual tax credits apply only to people who are not covered through their employer, Medicaid, or Medicare.
- Young riders. Young adults can remain on parents’ health insurance up to age 26.
- No more denials -- or higher prices -- for people with pre-existing conditions. Pre-existing conditions can no longer be used to deny coverage. This part of the law went into effect for all children under 19 during 2011. By January 1, 2014, no adult or child can be denied coverage – or charged more for coverage – because of a pre-existing condition.
- No more lifetime or annual limits on essential services. Before the ACA, most insurers placed limits on how much they would pay for health care, both over a lifetime as well as each year. Starting in September 2010, any policy that was written or renewed could not impose a lifetime limit on benefits. Annual limits will be phased out gradually and no longer acceptable after January 1, 2014.
- No more obfuscation. The law requires that all health insurance organizations and group health plans provide a clear, easy-to-understand summary of benefits and coverage under the plan. The summary must follow a standardized format, making it easier for consumers to compare plans and benefits.
- Preventive services. Health care plans must fully cover preventive services with no co pay. Some eligible preventive services include:
- Many cancer screenings
- Blood pressure, diabetes, and cholesterol tests
- Flu and pneumonia shots
- Counseling for quitting smoking, weight lose, depression, alcohol and other substance use, nutrition, etc.
- Prenatal counseling and screening
- Well-baby/well-child visits
- Medicaid for low-income adults -- maybe. If you’re an adult making up to 133% of federal poverty level (about $15,000 per year for an individual or $31,000 for a family of four), you may benefit from the dramatic expansion of Medicaid benefits called for by the ACA. Currently, Medicaid only covers children, pregnant women, and people with chronic disabilities; under the ACA, any low-income adult qualifies, regardless of marital or other status. However, the Supreme Court justices ruled that the federal government could not coerce states into expanding Medicaid by threatening to withhold Medicaid funding for existing programs. Elected officials in several states, including Nebraska, Mississippi, Idaho, and Missouri, have said they oppose expanding the program. Since states can now opt out, it’s uncertain how many low-income adults will actually benefit from the Medicaid expansion called for by the ACA, which was expected to expand coverage to an additional 17 million people. Of course, you could always move to a different state.
- A shrinking “donut hole.” If you’re 65 years or older and enrolled in a plan with Medicare prescription drug coverage (Part D), you may have faced a coverage gap known as the “donut hole.” After you and your drug plan have spent a certain amount of money for covered drugs, you have to pay all costs out-of-pocket for your prescriptions up to a yearly limit. Once you have spent up to the yearly limit, your drug plan helps pay for covered drugs again. The ACA currently provides a 50 percent discount on prescription drugs for seniors who are in the donut hole. By 2014, the percentage should be 25 percent – effectively filling the donut.
- Accountability for insurance companies.
- Advocacy. The ACA creates a pool of workers who can help you navigate health care coverage. Help people find out about coverage options, pursue denied claims, and .
- Clear information: No longer a confusing mass of options. Insurers must use a standardized form to explain their , clear language, and .
- No more gender discrimination. By 2014, insurance companies will no longer be able to charge you more just because you’re a woman.
- A strengthend primary care system : You might actually be able to find a family doctor and make that appointment. The law contains multiple provisions for strengthening the primary care workforce, especially in rural and underserved areas.
- Loan forgiveness and scholarships for people studying to become doctors, mid-level providers (physician assistants, nurse practitioners), nurses, EMTs, and other allied health professionals
- Provides funding and support for Community Health Centers (CHCs), backbone for primary care in rural and underserved areas.
- Increases Medicaid and Medicare payments to primary care doctors.
- A strengthened public health system: The ACA means you might be able to live in a healthier community. The law provides strong supports for development of public health infrastructure, including workforce development, integration of primary care and public health, and both community and clinical disease and injury prevention programs.
- Tax credits for small businesses: Small businesses receive tax credits help them provide insurance benefits to their employees. The first phase of this provision provides a credit worth up to 35% of the employer’s contribution to the employees’ health insurance. Small non-profit organizations may receive up to a 25% credit. By 2014, the credit will be up to 50% of the employer’s contribution to provide health insurance for employees and up to a 35% credit for small non-profit organizations.
What you give:
- You must play or pay. By 2014, you either have to purchase health insurance or pay a penalty. Small businesses must offer health insurance to their employees. Although 26 states and other organizations challenged this aspect of the law, on Thursday, June 28, the Supreme Court decided this penalty was a form of a tax, and thus constitutional.
- Employers. Businesses are not required to provide health insurance to employees. However, large businesses (those with 50 or more employees) that do not provide adequate health insurance must pay an assessment if their employees receive premium tax credits to buy their own insurance. For the first 30 employees, the assessment is about $2,000 per person.
Healthcare.gov, the clearinghouse for information about the ACA: http://www.healthcare.gov/index.html
Kaiser Family Foundation information and analysis of the ACA: http://healthreform.kff.org
Image credit: <a href='http://www.123rf.com/photo_9421113_a-united-states-map-with-a-stethoscop...'>iqoncept / 123RF Stock Photo</a>
Image credit: iqoncept / 123RF Stock Photo