The Affordable Care Act simplified
Local senior policy analyst explains the groundwork of the new law
By Michael Sullivan 10/03/2013
Over the last three years, the general public has been bogged down with loads of information, misinformation, political rhetoric, etc., regarding the Affordable Care Act. While Americans try to decipher exactly what is important about the new law, media sources all over the country are trying to break it down as simply as possible. In a conversation with Jennie Pittman, senior policy analyst with the Human Services Agency of Ventura County, she explains the basic facts of what everyone should know about the law. With insurance exchanges now open to the public, it might be good to have a crash course on the subject.
Portions of the Affordable Care Act were implemented Oct. 1. What exactly
As of Oct. 1, the public may begin enrolling in Covered CA [California] plans with coverage effective Jan. 1. People who want to enroll online for Covered CA should go to www.coveredca.com, over the phone by calling 1-800-300-1506 or by picking up a paper application to take away, complete and mail back to the Ventura County Human Services Agency (HSA).
What will happen Jan. 1?
Effective Jan. 1, people who have enrolled in Covered CA plans or Medi-Cal will have access to essential health benefits including:
• Ambulatory patient services
• Emergency services
• Maternity and newborn care
• Mental health and substance use disorder services, including behavioral health treatment
• Prescription drugs
• Rehabilitative and habilitative services and devices
• Laboratory services
• Preventive and wellness services and chronic disease management
• Pediatric services, including dental and vision care
The open enrollment period for Covered CA will continue through March 31. People may apply for Medi-Cal at any time of the year.
People have been talking about how their insurance premiums will go up. Is that true?
The Center for Budget and Policy Priorities cites the nonpartisan Congressional Budget Office and several outside analysts as concluding that delaying or permanently repealing the individual mandate for health insurance would result in significant increases in premiums. (See http://www.cbpp.org/cms/index.cfm?fa=view&id=4012.)
Tell me about the range of rates for premiums and the incomes for government subsidies.
Below is an example of the monthly premium that a family of four could expect to pay after receiving a federal subsidy, depending on the specific health insurance plan they select:
Annual income for a family of four, monthly premium after federal subsidy:
$23,550 – $35,325 $39 – $118
$35,326 – $47,100 $119 – $247
$47,101 – $58,875 $248 – $395
$58,876 – $94,200 $396 – $746
Individuals and families may use Covered CA’s Shop and Compare (www.coveredca.com/shopandcompare) to calculate their potential insurance costs.
It has been said over and over that Obamacare will be a job killer. If that is true, when do you think that would be substantiated?
The Center for Budget and Policy Priorities cites the nonpartisan Congressional Budget Office and several outside analysts as concluding that health reform will not significantly change the number of jobs or the unemployment rate. (See http://www.cbpp.org/cms/?fa=view&id=3362.)
Who will be penalized if they don’t purchase insurance or provide plans? Is the pressure on the average Joe as much as the employer?
Under the Affordable Care Act, nearly all citizens and legal residents are required to have health insurance coverage by Jan. 1, 2014. There will be a penalty for those who are required to but do not obtain health insurance. The penalty phases in over three years and becomes increasingly severe. In 2014, the penalty will be 1 percent of annual income or $95, whichever is greater. By 2016, the penalty will be 2.5 percent of income or $695. This means that if you do not have coverage in 2014, you will be required to pay a penalty when you file your taxes at the end of the year.
The Affordable Care Act does not require businesses to provide insurance. For businesses with fewer than 50 full-time equivalent employees, there are no penalties for not providing health insurance. Beginning in 2015, businesses with 50 or more full-time equivalent employees may have to pay a penalty if they do not offer minimum essential coverage to their full-time employees. Businesses with fewer than 50 full-time equivalent employees are not subject to these penalties. Businesses with 50 or more full-time equivalent employees may pay a penalty if they do not offer coverage for employees who work an average of 30 or more hours per week. Note that there is no penalty for part-time employees not offered coverage.
For those who don’t qualify for Medi-Cal (or fall within the income limits of what was Healthy Families) and their children, but are still on the lower income scale, will the new law provide affordable options?
Those who have low incomes but do not qualify for Medi-Cal are likely eligible for tax subsidies that will make their insurance premiums more affordable.
Are there any opt-out possibilities without penalties?
Several groups are exempt from the requirement to obtain coverage or pay the penalty, including:
• People who would have to pay more than 8 percent of their income for health insurance
• People with incomes below the threshold required for filing taxes (in 2012, $9,750 for a single person and $27,100 for a married couple with two children)
• People who qualify for religious exemptions
• Undocumented immigrants
• People who are incarcerated
• Members of Native American tribes
• People who do not have insurance and do not fit into one of these categories will likely pay a penalty.
What do people need to know that we haven’t discussed thus far?
Workers who lose their jobs and accompanying health insurance may now find it easier to seek affordable health insurance alternatives in addition to the option of continuing their employer-provided coverage under COBRA. They may screen themselves online for Medi-Cal eligibility by visiting www.vchsa.org and clicking on “Apply for Aid Online,” or enroll in a Covered CA plan at www.coveredca.com.
Where can we go for more information?
Visit the Covered Ventura County website at www.coveredvc.com. This site, designed as a one-stop information resource for Ventura County residents, includes fact sheets, local health plan options, and details on how to
Affordable Care Act facts• 44 million Americans who currently do not have health insurance are projected to be covered under the new health law.
• New reforms also include letting young adults stay on their parents plan until 26 years of age, eliminating pre-existing conditions and preventing insurance companies from dropping clients when they get sick.
• According to the Harvard Medical School and the Health Affairs Journal, half of all bankruptcies in the United States are caused by medical bills.
• According to the Kaiser Family Foundation, annual insurance premiums for families increased 4 percent on average, to $15,745 in 2012. This was less than from the 9 percent hike in health insurance in 2011.
• For most Americans, annual out-of-pocket medical and drug costs combined are capped at no more than $6,350 a year for individuals and $12,700 a year for families. The coverage will pay 100 percent of approved costs above your cap, which means patients with Obamacare health plans are unlikely ever to be wiped out by runaway medical bills.
• It will be possible now, for instance, for a family of four making $40,000 and paying around $1,000 a month for insurance to buy better coverage for $165 a month.