SAN FRANCISCO (KPIX 5) – The Affordable Care Act is a nationwide effort to cover millions more people with health insurance. Below are five key things to know about your options:
The Individual Mandate
The Affordable Care Act makes having medical insurance federal law – the requirement forms the individual mandate. Consumers Union Special Projects Director Betsy Imholz says there will be exceptions.
“Coverage takes effect on January 1st, and as many people know, January 1st is the time in which everyone will be required to have some form of coverage,” Imholz said. “”There will be about 2,000,000 people still in California who won’t be covered. They are either undocumented immigrants or they slip between the cracks and they can’t afford any of the programs that are available.”
Besides undocumented immigrants, there are exceptions for those in prison, anyone whose religion is opposed to the benefits, members of Indian tribes, or if your family income is below the threshold for filing a tax return. If you make more, but the insurance would cost you more than 8% of your income, you’re also exempt. But the new system should make coverage possible for more Californians than ever.
“This is a really historic moment for California,” Imholz explained. ‘(It’s) the first chance since MediCare that we’ve had a gigantic expansion of coverage possibilities.”
A policy you already bought, or one from your employer, a veteran’s program, Medicare, or MediCal can satisfy the requirement. And MediCal is expanding to include more Californians – so you may qualify now even if you haven’t before. But the biggest addition is the insurance marketplace, or exchange.
“California was the first state in the nation after the federal health care reform was passed to set up its own, what we call, exchange. And in California, the new name it has is Covered California,” said Imholz.
Covered California allows you to compare insurance plans and get financial assistance. All the plans are required by law to offer a list of essential benefits, and companies can’t cancel or deny your policy because of a pre-existing condition or if you get sick. The penalty for not satisfying the individual mandate in 2014 is $94 or 1% of your income, whichever is more. It goes up the next year, and the next, until it will cost you $695 or 2 1/2% of your income.
How to Pay for Coverage
If you’re wondering how you’re going to pay for coverage, there’s help available.
“People right now buying their own insurance, it’s often very daunting,” Larry Levitt explained.
Levitt is Senior Vice President of the Kaiser Family Foundation, and says there’s a lot of new government aid available to cover the cost.
“Now there will be tax credits, or help from the federal government, for people to buy their insurance, if they are buying it on their own. And those tax credits will vary based on your income — Not just for low-income people. Middle income people will get help with their premiums well.”
The tax credits will help pay your monthly premium. But for those who qualify, there are also “cost-sharing subsidies.” Those will help pay your out-of-pocket costs down the road, like co-pays and deductibles. But you can only use this assistance if you’re buying a policy in the marketplace, “Covered California.”
The MediCal program for low-income residents, is also expanding. Under the new rules, the threshold for qualifying for MediCal is higher, so anyone even near the poverty level will be eligible. It’s estimated an additional 1.4 million Californians will qualify, including adults without children, a group previously excluded. And there’s a new option for young people too:
“One of the early changes under Obamacare, which is already in effect, is that young adults can stay on their parents’ insurance policies until they’re age 26,” Levitt explained. “There’s also a special provision for them that provides a catastrophic option. So this is a very high deductible plan that only kicks in if something horrible happens.”
Adults can get coverage under the catastrophic plan up to age 30. No matter what plan you choose, the premium can’t go up all of next year, and an initiative on next year’s ballot could give the state insurance commissioner the power to reject increases that insurance companies propose in the future.
What the Plans Cover
If you’re buying new health insurance, the Affordable Care Act is about to make choosing a policy a lot easier.
“Every plan offered through Covered California, the state online health insurance marketplace, will have 10 essential benefits,” said Carmella Gutierrez, president of the patient advocacy organization Californians for Patient Care.
Until now, it wasn’t unusual for a health care plan to limit — or leave out all together — coverage for maternity care, mental health, or even prescription drugs. Gutierrez says that’s not allowed under the Affordable Care Act.
“This is a comprehensive health plan that covers everything from hospitalization to emergency services to outpatient services, medications, lab work, maternity, newborn care, and also mental health, therapy, and also dental care for children,” Gutierrez explained.
Insurance companies participating in Covered California will also have to cover preventive and pediatric care. By adhering to the same list of standards, insurance plans will be easier to compare.
The plans in the new marketplace are based on a tiered system: bronze level plans pay 60% of the cost of medical services, and you pay a lower premium; silver plans pay 70%, with you paying a bit more; gold plans pay 80%, but the premium goes up even more; and platinum plans pay 90%, but come with the highest premiums. It’s your choice whether you want to pay more each month, and less for co-pays and deductibles — or less, and risk you’ll pay more when you need care.
“There’s another plan that Covered California will be offering,” Gutierrez added. “There’s a catastrophic plan for people under the age of 30. It’s very low, minimal coverage, but at least it will give you some kind of security in the event that something, some emergency happens.”
The catastrophic plan would not pay for doctor’s appointments or even emergency room visits. It will only cover those huge bills for a disaster you would not be able to afford. If you want something more, choose from the tiered plans.
The Affordable Care Act eliminates one of the most troublesome issues with health insurance: coverage limits based on pre-existing conditions.
“If you go out and buy insurance on your own, you’re pretty much locked out of the market now if you’ve ever had cancer, or heart disease, or even something as minor as asthma or hay fever,” explained Larry Levitt, Kaiser Family Foundation Senior Vice President.
But that won’t be the case anymore. Levitt says the new Affordable Care Act prohibits insurers from denying coverage to people with pre-existing conditions.
“You’ll no longer have to fill out a detailed medical questionnaire when you apply for insurance, and everyone will be guaranteed insurance regardless of whether they’re sick or healthy,” he explained.
The only factors insurers can use to determine your rates are: your age, the size of your family – or, how many people you want to cover – and where you live. The nine Bay Area counties are divided into six regions, with each region offering different insurers and varying rates.
But no matter where you are, even tobacco use won’t raise your rate in California.
And there’s even more protection: annual limits and lifetime limits are prohibited starting next year. Currently, insurers can cap your coverage – say, $500,000 a year, or maybe $5,000,000 over your lifetime. As of January 1, 2014, that’s not allowed, which is especially important for anyone with a chronic condition or serious illness. But you have to sign up during open enrollment!
“You can only buy insurance once a year,” Levitt emphasized. “If you miss that open enrollment period, then you have to wait until the following year. So it’s a way of encouraging people to buy insurance up front whether they’re healthy now or not.”
Open enrollment will usually be three months a year. But because the system is so new this year, it will last for six months: from October 1st to March 31st.
Changes to MediCal and Medicare
In the effort get millions more people covered by health insurance under the new Affordable Care Act, California has accepted federal money to expand MediCal, the state’s version of Medicaid. More people than ever will qualify.
“I think one thing that’s not well understood is that a lot of people, even if their incomes are quite low, are not necessarily eligible for MediCal now,” Larry Levitt explained. ‘It primarily covers parents and children – but adults, whether they’re married or single, if they don’t have kids, then they’re generally not eligible for MediCal.”
Levitt, Senior Vice President of the Kaiser Family Foundation, says under the new Affordable Care Act, everyone under the poverty level — or near it — will be eligible.
Californians for Patient Care President Carmella Gutierrez says it’s a big change for MediCal, the California version of Medicaid.
“There’s an additional 1.4 million Californians who will be eligible for the MediCaid expansion,” Gutierrez said.
Here are the numbers: A single adult making less than $15,000 a year could get free MediCal coverage. So could a family of four with an income less than $31,180. This is for people under age 65. For those over, or those with a permanent disability, Medicare coverage is only getting better.
“Anyone who has Medicare, do not worry,” Gutierrez said confidently. “Your coverage is safe, your benefits are safe, and not only that – they’re enhanced.”
Medicare will now cover annual physicals and free preventive care. In fact, free cancer screenings, vaccines, and other wellness care has already been activated. And the infamous “donut hole” of drug coverage is going away.
“If you hit the donut hole, you had to pay the full cost of your prescriptions and it meant pretty high out-of-pocket costs for many seniors,” Levitt explained. “The Affordable Care Act has closed that donut hole over time. So seniors should see some relief in their prescription cost.”
The gap in coverage will shrink over the next several years until 2020, when Medicare beneficiaries will only have to pay the usual drug co-pay for these medications.
Covered California, the state’s online insurance marketplace: www.coveredca.com
Kaiser Family Foundation’s health reform resource: http://healthreform.kff.org/
Californians for Patient Care, 5 Things You Need to Know About Obamacare: http://www.calpatientcare.org/five-things-californians-should-know/healthcare-coverage-2014-five-things-californians-should-know
The Affordable Care Act (via U.S. Department of Health & Human Services): http://www.hhs.gov/healthcare/rights/law/patient-protection.pdf
The You Toons explain the health care law (via Kaiser Family Foundation): http://www.youtube.com/watch?annotation_id=channel%3A51f51ecb-0-2206-8773-1a11c29822&feature=iv&src_vid=vmdbllWOOzs&v=JZkk6ueZt-U
New Health Coverage for Californians, by Families USA, a non-profit, non-partisan organization working to secure high-quality, affordable health coverage and care for all Americans: http://familiesusa2.org/assets/pdfs/new-health-coverage/california.pdf
Consumers Union – 7 Things You Need to Know: http://www.consumerreports.org/health/resources/pdf/ncqa/The_Affordable_Care_Act-You_and_Your_Family.pdf
Consumer Reports – Update on health care reform: http://www.consumerreports.org/cro/2012/06/update-on-health-care-reform/index.htm
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