Three Things You Need to Consider About the Affordable Care Act
The next phase of the Patient Protection and Affordable Care Act—PPACA—is soon to begin, and some people are understandably puzzled. One of the biggest issues is that even those in the insurance industry are not quite sure how everything will play out. However, the essential things are what we do know thus far:
#1) You Must Have Insurance or Face a Penalty
In Florida alone, there are approximately 3.5 million uninsured Americans; the next leg of PPACA is aimed at reducing those numbers. According to the law, everyone must be enrolled in a qualified health insurance plan by March 31, 2014; barring a qualifying exemption. Individuals and families can meet the requirement either through employer-provided health insurance coverage, current private insurance, or through the online health insurance marketplace.
State health insurance marketplace websites—called exchanges—are set to begin offering plans on October 1, 2013. Florida’s marketplace will be divided by county, offering five different tiers of coverage and cost: Catastrophic, Bronze, Silver, Gold, and Platinum. According to a Florida Office of Insurance Regulation (FLOIR) form released in July, Polk County, Osceola, Lake, and Orange currently have five different companies offering plans; Seminole has six, while Sumter and Marion both offer three; and Hardee and Highlands offer only one at this time. According to FLOIR spokeswoman Amy Bogner, the catastrophic plans will only be available to the under 30 age group.
To ensure that citizens comply, those without coverage or an exemption will face a penalty on their 2014 taxes. For the first year, the penalty is $95 for an adult, half that amount for a child, and limited to $285 or one percent of a household’s annual income. Each year, the penalty amount rises.
Exemptions to the law include income, religious objections, and status as an American Indian. If your income is below the IRS tax filing threshold or if the lowest-cost plan exceeds 8 percent of your income, you are exempt.
2) Prices Will Likely Increase, But so Will Coverage
Another FLOIR release outlined potential costs for a Silver-level plan, comparing new costs for 11 providers with their old costs as closely as possible; direct apples-to-apples comparison can’t be made between new and old plans. According to the release, costs could increase anywhere from 7.5 percent to 58.8 percent, depending upon the carrier. Florida Health Commissioner Kevin McCarty says that rates will also likely rise around five to 20 percent for insurance plans for small businesses.
While costs for health insurance will rise, there is a bright side: two of them, actually. The first is the plans themselves offer more comprehensive coverage, maintains Health Commissioner McCarty. According to the National Association of Insurance Commissioners, new plans must provide minimum coverage for ambulance services, ER visits, hospital stays, maternity and newborn care, mental health, substance abuse, prescription medications, rehabilitation and habilitative services, laboratory testing, pediatric services, and preventative wellness services.
Spokeswoman Bodner emphasizes that most current healthcare plans don’t offer all of the soon-to-be required coverage areas. She stresses that other factors—such as equal premiums for women and men, guaranteed coverage despite pre-existing conditions, and rate caps for the elderly—also contribute to the increases in cost.
The second bright side is the government subsidies that will help to cover the higher costs.
3) Government Subsidies May Offset Some Costs
For an individual making less than $48,000 or a family with an annual income under $94,200, government vouchers might help pay some of the burden. Consumers applying for health coverage on the state’s marketplace exchange will apply for the subsidy at the same time; the voucher is paid to the insurance provider directly, rather than reimbursing the policy holder.
The Kaiser Family Foundation offers a Subsidy Calculator for individuals and families to get an idea of what sort of subsidy they might get for a Silver-level plan. Costs and subsidies will vary based on age, income, and family size.
story by ERIKA ALDRICH