October 1st, 2013 has come and gone, and the Affordable Care Act, aka Obamacare, is the elephant in the room. It’s here, whether we like it or not. We can ignore it, criticize it and demonize it, but it’s now the law; being a licensed Life and Health Insurance Agent, I have to find ways to peacefully coexist with it, whether I’m in favor of it or not. I’ve received numerous calls from friends and clients, wanting to know how this is going to affect them. I’m ashamed to say that I didn’t have any answers for them; I was just as ignorant about the down ‘n’ dirty details of the ACA as they were. So this weekend I put on my investigator’s hat and got busy. Since most people fear what they don’t understand, this post is going to give you the “Reader’s Digest Condensed” version of ten of the most important things I’ve learned about the Affordable Care Act this weekend, and what’s in it for Individuals and Small Businesses. When you strip away the politics and look at the nuts and bolts of it, it’s really not as scary as you think.
(Note: This post isn’t meant to be a totally comprehensive and detailed reference on the ACA, just an overview of some of more interesting factoids I learned through the courses I took to get certified to do business through the Federally-facilitated Marketplace. For more information, check out Healthcare.gov)
1. There is now a requirement to maintain minimum essential coverage or make an annual payment with your tax return ($95 per adult, $47.50 per child, or 1% of your income for 2014, whichever is higher. That amount will rise to $695 or 2.5% in 2016). This is one detail of the ACA that has everyone up in arms. But the news isn’t all bad; you might qualify for an exemption from the payment requirement for a variety of reasons. And even if you don’t, you might qualify for a tax credit to help defray the cost of your monthly premium, as well as cost-sharing reductions to help with your out-of-pocket expenses.
| Did you know…– A smoker cannot be charged more than 1.5 times the premium of a non-smoker? On a SHOP policy, the tobacco surcharge may be eliminated if the insured participates in a wellness program! |
2. In some states, Medicaid has been expanded to cover individuals under the age of 65 whose household incomes are less than 138% of the Federal Poverty Level (FPL). Translated into dollars and cents, in 2013 the FPL is $11,490 for an individual, and $23,550 for a family of four. In the past, you needed to visit several agencies to determine your eligibility for various benefit programs, but now that determination will be made via the one streamlined application you complete through the Marketplace. Once your information is submitted and verified, the Marketplace will determine your eligibility for Advance Premium Tax Credits, Cost Sharing Reductions, Medicaid, and CHIP (Child Health Insurance Program), a program to cover children of families whose income is too high for Medicaid, but they can’t afford health insurance.
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Did you know… – An older person cannot be charged more than 3 times the cost of the premium of a 21 year old? |
3. As of 2012, Health Insurance issuers must use an average of 80 cents out of every premium dollar to pay customers’ medical claims and conduct activities that improve the quality of care – leaving the remaining 20 cents for salaries, administrative expenses and profits. Companies that aren’t spending enough of their premium dollars on health care expenses must provide rebates to insured individuals or policyholders.
4. Marketplaces will only offer health plans that are certified as Qualified Health Plans or QHP. These plans must meet certain criteria, including at a minimum, a set of ten essential health benefits (EHB), as well as non-discrimination requirements, limits on cost-sharing and provider network adequacy standards.
| Did you know…– Coverage limitations based on pre-existing conditions are now prohibited, as is charging a higher premium based on health status or gender. |
5. The ten Essential Health Benefits include ambulatory patient services; emergency services; hospitalization; 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; and pediatric services, including oral and vision care.
6. There will be 5 levels of coverage or “generosity” available through the Marketplace: Catastrophic, Bronze, Silver, Gold and Platinum. The “metal levels” represent cost-sharing percentages: 60%, 70%, 80% and 90%. Catastrophic plans are limited to people under 30 years old OR those who qualify for a “hardship exemption” because the Marketplace determined that they are unable to afford health coverage.
7. Small businesses can be eligible to select a program through the Small Business Health Options Program (SHOP) if they have at least one full-time employee and no more than 50 full-time equivalent (FTE) employees, and the average annual salary doesn’t exceed $50,000. If the small business pays at least 50% of their employees’ health insurance premiums, and they have under 25 FTE employees, the business may qualify for a tax credit to help defray the cost of their contribution.
8. Employees who are participating in their employer’s plan will not be eligible for Advance Premium Tax Credits or Cost Sharing Reduction.
| Did you know…– Employer-provided health insurance is considered unaffordable if the individual premium exceeds 9.5% of your monthly household income. |
9. There are several ways to learn about what you’re eligible for under the ACA, the Healthcare Marketplace (or Exchange) website, Healthcare.gov, the toll-free information number, 800-318-2596, or you can contact a certified agent or broker who can walk you through it all and assist you with your application (like me, for instance). ;o)
10. If you go through an agent or broker, our commission is going to be paid by the Insurance Provider – just like it always is – so don’t be concerned that having the help of a licensed agent or broker is going to cost you anything. It won’t raise your premium to have an agent; by the same token, it’s not going to reduce your premium if you go it alone.
So there you have it, ten things about the ACA that I learned this weekend (plus a few bonus factoids). I’ll be honest, I’ve never been a fan of mandated health insurance. If an individual wants to play the odds and forego coverage, that should be his or her prerogative. But I do think that the ACA has a lot going for it – moreso than I originally thought – and I was pleasantly surprised and more than a little relieved once I started taking the time to inform myself about it. The lesson here is that knowledge is empowering. Don’t depend on the press or snippets of politically charged rhetoric on Facebook to form your opinion on this very important subject. I’ve barely scratched the surface – dig in and find out what this law is going to mean to you and your family before you sing its praises or rip it to shreds. If you have questions, feel free to post them here and I’ll do my best to answer them.
Rosalie Diane Davis is a licensed Life and Health Insurance professional in the state of Tennessee, and is certified through the Centers for Medicare & Medicaid Services as a Health Insurance Marketplace in-person consumer assister.
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