As the Affordable Care Act — or “Obamacare”— takes effect, Americans are becoming accustomed to the idea of health care reform. But many are still confused about what they have to do and what they can do under the new law. One of the biggest concerns? The actual cost of the changes.
By now, nearly 1 in 4, or 24 percent, of Americans who may be eligible for new health insurance options has visited a health exchange (i.e., a health insurance marketplace) to shop for a new plan. That’s up from 17 percent in October, according to a January report by The Commonwealth Fund, a private foundation that researches health systems.
The U.S. Department of Health and Human Services (HHS) says that nearly 2.2 million people selected plans from health insurance marketplaces by the end of 2013. But, HHS says most are still unclear about some part of the new law. Questions range from who has to pay a penalty for not having health coverage to what the government can do to help you get coverage.
We asked health policy experts to address three commonly asked Obamacare questions:
Q: Do I Pay A Penalty If I Don’t Have Insurance?
“There is definitely a penalty unless you have an exemption,” says Shana Alex Lavarreda, PhD, MPP, a research scientist and director of health insurance studies at the UCLA Center for Health Policy Research.
A few exemptions include being uninsured for less than 3 months of the year or not having to file a tax return due to a significantly low income. Some people may qualify for a “hardship” exemption, including those who were homeless or evicted from their homes. Additional circumstances are listed on www.healthcare.gov/exemptions.
For 2014, the penalty for not having insurance is 1 percent of your yearly income or $95 per individual, whichever is higher. The penalty for children in an uncovered family is half that, or $47.50 each, and a family would max out at $285. This penalty fee may increase in the future.
Q: What Is a “Grandfathered” Health Plan, and Should I Keep It?
Under the Affordable Care Act, a “grandfathered” plan is one that was already in existence on March 23, 2010 and has not changed to substantially cut benefits or increased costs since. Grandfathered plans can be group plans through your employer or individual plans you bought on your own. If you have a grandfathered plan, your insurer should have notified you by now.
So, can you keep a grandfathered plan? “The short answer is yes, but only if you have been continuously enrolled in the plan,” says Chapin White, PhD, MPP, senior policy researcher for the RAND Corporation in Arlington, Va.
One other sticking point, says Lavarreda: An insurance company can decide to stop offering a grandfathered plan. If so, it must provide notice 90 days prior to the end of coverage and offer other available options.
Other points to consider about keeping your grandfathered plan:
- It does not have to follow the rules of other plans under the Affordable Care Act, such as covering preventive care for free.
- Plans you bought on an individual basis (i.e., not through an employer) can still impose yearly limits on your coverage and don’t have to cover preexisting health problems.
Q: Can I Get Financial Assistance?
Whether you’ll get a break depends on what your employer offers in the way of a health plan, according to Lavarreda. If you have no offer of insurance from your employer and if your income qualifies, you will likely receive financial help when you buy through the marketplace, she says.
Financial help may mean reducing the amount you pay for monthly premiums or reducing your out-of-pocket costs. If your employer does offer a health plan, whether you qualify for lower costs by buying through the marketplace depends on whether your employer offers you affordable coverage, White says.
So, what is considered “affordable” coverage?
- Under health care reform, a job-based health plan is affordable if the share of premiums to cover you alone (i.e., not your entire family) is less than 9.5 percent of the family income.
- Your employer’s plan must offer “minimum value.” That’s defined as paying at least 60 percent of the total costs of medical care, with out-of-pocket costs no more than 40 percent of the bill.
If your employer’s plan meets those requirements, you probably won’t qualify for financial help through the marketplace. However, you can still check out your options on the exchange, even if your employer offers a plan, White says.
It’s a good idea to talk to your human resources department or another expert. Make sure you know what your payments will look like and what you are getting in return. For some people who are trying to make ends meet, it will be less expensive to pay the penalty than to get coverage — but then, you won’t be covered.
To keep up with health care reform, check these official sources regularly:
- Visit www.healthcare.gov to keep abreast of any changes or updates.
- If you are unsure if your state has formed its own marketplace or is letting the federal government run its marketplace, use the tool available at www.healthcare.gov/what-is-the-marketplace-in-my-state to enter your state name and learn more information.
- Certain parts of health care reform have been enacted and are working well, and other parts less so. If you or your loved ones need coverage, stay on top of the administrative hurdles to ensure you get the best care possible at the most affordable rates.
- If health care reform or other changes mean you don’t get to keep your old doctor, you have a right to be frustrated, but it shouldn’t stop you in your tracks. Do your own homework to get the best deals.