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Health Care Reform FAQ: The Basics

By on April 11th, 2013
Filed: Facts, Health Insurance, Health Reform

Image of Einstein writing health reform question on chalk boardWe’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 are constantly being tweaked and modified, so the below information isn’t set in stone.

Q: What’s going to change in 2014?

A:  Many provisions of the Affordable Care Act will start 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 coming next 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 will be different come 2014 is the establishment of a new open enrollment period, which will start on October 1, 2013 and continue through March 31, 2014.

Outside of the open enrollment period (which will occur annually, though the duration will be reduced in future years), 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 on January 1, 2014 insurers can no longer decline your health insurance application based on your medical history.  It’s already true that you cannot be dropped from coverage if you get sick and that 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 in 2014?

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.

Starting in 2014, you’ll 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 Healthcare 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 are scheduled to be launched in October 2013, when they will begin taking applications for coverage starting in January 2014.

While exchanges won’t be the only places to buy coverage (you can still shop with local agents or online marketplaces like eHealthInsurance.com), subsidies will be 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.

We will continually post new information about health care reform because we think it is important for our customers to be educated on the upcoming changes.  For more information, feel free to call eHealthInsurance or visit www.HealthCare.gov.

About Carrie McLean

Carrie McLean has been in the health insurance field for 7 years and is licensed in all 50 states. She is often seen in the media discussing health insurance trends and issues from an insider’s perspective and as a consumer advocate, having personally helped thousands of individuals and families search for and find affordable health insurance.

9 Comments Add Your Comment

David Goldman on Saturday, April 13 @ 3:38 pm

I’m interested in getting some pricing on health insurance. It would be 56 and my 14 year old sone who’s currently with Aetna. Please send me an application and I’ll fill it out and send back to you. Thanks!

Nate Purpura on Monday, April 22 @ 5:44 pm

Hi David, we don’t actually work that way. All of our applications are online. if you want to talk to an agent and have them fill out an app for you, you can do that as well. Our Licensed Agents are available at 1-866-787-8773.

But, if you go to eHealthInsurance.com you can run instant quotes in less than a minute and see what’s available, pending underwriting, in your area.

Theresa Chambers on Tuesday, April 16 @ 7:24 am

What are the minimum criteria for coverage – for example, I have a $7000 family deductible. Is that acceptible or will I have to get a more expensive policy?

Nate Purpura on Monday, April 22 @ 5:41 pm

Hi Theresa,

Its a bit more complicated than that. The law limits total out of pocket costs for plans to the Health Savings Accounts limits, which were $5,950 for individuals and $11,900 for families in 2010. As such, your deductible may be within the acceptable range.

However, there are other factors to consider as well.

The two critical questions you need to answer are, when did you buy your plan and what benefits does it cover. If you bought your plan before March 23, 2010 there is a very good chance your plan has “grandfather status” and can remain as is. If you bought after that, you may have to change if your plan does not include all 10 of the new mandatory benefits.

They are:
1. Ambulatory patient services
2. Emergency services
3. Hospitalization
4. Maternity and newborn care
5. Mental health and substance abuse
6. Prescription drugs
7. Rehabilitative and habilitative services;
8. Laboratory services;
9. Preventive and wellness services and chronic disease management;
10. And pediatric care.

I know its not easy to know if your plan covers all of these benefits, but the good news is that you have several months to figure it out. There is an Open Enrollment period for new plans that starts this fall and runs through next March. So, you’ll have 6 months to investigate new plans and see if you can find something you like better.

If not, hopefully the plan you have now meets the new standards. The rules are not completely written on this issue, so we will be publishing more content about it. Stay tuned! You can always call and talk to one of our agents, they know the law very well.

jamie on Sunday, April 21 @ 4:56 pm

in 2014 will the rules change as far as you having an illness befor purchasing insurance. right now my insurance co. will not pay for preexisting illnesses. i have fybromyalgia, so they wont pay for anything that has to do with this illness. not even perscriptions. please let me know

Nate Purpura on Monday, April 22 @ 5:23 pm

Hi Jamie, in 2014 insurers will not be allowed to decline an application for coverage because someone has a pre-existing medical conditions.

And, major medical coverage cannot exclude coverage of a pre-existing medical condition. As to how fybromyalgia specifically will be treated by the law, I do not know. But, I will forward that question to Amir Mostafaie, who is our premiere expert on all things related to Obamacare. He should know. Stay tuned.

Nate Purpura on Wednesday, May 1 @ 7:24 pm

Hi Jaime,

Sorry for the delay in responding. In speaking to Amir, he is unaware of any part of the Affordable Care Act that specifically addresses fybromyalgia.

That’s a PC way of saying we just don’t know. Our best guess is that since the law doesn’t specifically address fybromyalgia, the decision to cover it would be up to individual insurance companies.

Michi on Friday, December 27 @ 6:52 am

How does this work if I don’t have a job?

Nate Purpura on Tuesday, January 14 @ 9:44 am

Michi, you can go to our exchange or the Federal exchange and apply for a plan. We’re not yet able to enroll people with subsidies, so if income is an issue you can use a government exchange and apply for a subsidy. Some people are finding that they’re eligible for Medicaid, which is free. But, if you don’t want Medicaid and you don’t qualify for a subsidy because your income is too low, you’re in a bit of a tough spot and I’d encourage you to call our call center.

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