2013 Health Care Reform Update

Health care reform was signed into law March 23, 2010. It has had much opposition, many attempts at repeal, and continued dissent amongst some states. But, like it or not, health care reform officially arrives Oct. 1, 2013 when the first plans under the new law go on sale. Here are some of the basics affecting consumers, as of 2013.

What is the difference between obamacare, the affordable care act, the patient protection and affordable care act and health care reform?

Practically speaking, nothing. The terms are used interchangeably to refer to a law originated by President Obama and signed into law March 23, 2010.

I have a pre-existing condition and have always been denied when applying for health insurance. When can I apply and not be denied?

Oct. 1, 2013. 

I thought that children already could not be denied insurance as soon as the law passed, but when I tried to get my child health insurance in the state I live in, I could not get it. What can I do?

The Affordable Care Act mandated that children could not be denied insurance, effective 2010. In response, insurance carriers in certain states stopped selling child only health plans, leaving consumers in those states with no options for their children (California has child only plans available). If this is your situation, consider purchasing a family plan for you and your child.

Is it true that I can get the premiums subsidized? 

Yes. U.S. citizens, nationals, and individuals lawfully present in the U.S. can receive health care reform premium subsidy and health care cost reductions, based on their income level in comparison to the federal poverty level. 

What are the subsidy amounts?

The subsidy is based on income and applied on a sliding scale to individuals and families earning between 138 percent and 400 perdent of the of the federal poverty level, approximately $35,000 to $94,000 in 2012 for a family of four.

Here is a sample of the subsidy scale for a family of four, based on 2012 federal poverty levels:

% of Federal Poverty Level

Annual Family Total Income

Projected Subsidy %*

0-150%

Eligible for health care through medical

150%

$35,137

90%

200%

$46,850

80%

300%

$70,275

50%

400%

$93,700

35%

*insurance premiums for 2014 health plans have not been determined, so dollar amounts  are still unknown

How do I get the subsidy?

When you apply for insurance, you fill out income information, based on your tax return. Determination will then be made on subsidy.

So, if I want the subsidy or need help figuring out whether or not I qualify, who can help me?

Health insurance agents or government agencies called health care exchanges.  The health care exchanges are still in the process of organizing themselves and forming, in certain states they are further along than others. California’s health care exchange is called Covered California. Watch for it to launch around the state later this year.

So, will the health plans all be the same, regardless of whether they are subsidized?

Yes. There is no “government health plan.” All health insurance plans are contracts for sale from private insurance carriers, with the help of a licensed health insurance agent, or government agency.

Will there be a price difference between buying health insurance from an agent or a health care exchange?

No. All plans have to be offered for the same price. Payment of insurance agents is done by insurance carriers, not consumers, so their services are free to consumers. Exchanges will be government services, similar to the post office or department of motor vehicles.

So will it be better to use an agent or health care exchange for the purchase of health insurance?

Use whoever you are most comfortable with and who helps you understand your insurance most effectively.

My spouse has insurance through work and they pay 100 percent of his premiums but 0 percent for spouses and children. We are eligible to enroll on my spouse’s company plan, if we pay the premiums out of his paycheck, which is very expensive for us. Will health care reform help us with this?

Yes, in the following ways:

• You will be able to buy a family or individual health plan with no regard for pre-existing conditions
• Generally, family and individual plans are less expensive than company plans
• Family and individual health insurance plans will be more comparable, in terms of health care coverage, to company plans than they were prior to reform

What if my spouse’s employer does not pay the full cost of his health insurance?  Should my spouse refuse the company health plan and get a subsidized family health plan?

Employees eligible under an employer sponsored plan do not qualify for subsidy unless the employee’s portion of the premium expense exceeds 9.5 percent of his wages. If this is the case, the employee can be eligible for subsidy, and the employer can be penalized. 

As an insurance agent, how do you feel about health care reform, do you “like it or not”?

This is such a fundamental change in our industry, the service we provide and will have massive impacts for many years to come that it is nearly impossible to have an opinion before it starts. I do know that I am game to try a new system, because the one that we had was very broken and I have seen many good people struggle and suffer without health insurance and the proper health care that comes with having health insurance. It really is true that no insurance is no alternative.

Look for more information about Health Care Reform and State Exchanges as it becomes available during 2013.