HEALTH INSURANCE IS CHANGING
What You Need To Know About The Affordable Care Act
Have you ever been denied health insurance because of a pre-existing health condition? Have you tried to get health insurance but found it to be unaffordable for you and your family? If so, you are not alone, and things are about to change.
On March 23, 2010, President Barack Obama signed the Patient Protection and Affordable Care Act into law. The bill, commonly referred to as ObamaCare, has been highly controversial because of its scope and estimated cost to the American taxpayer. Also, a key provision of the law requires everyone to purchase health insurance or show proof of coverage.
This provision of the law, called the individual mandate, was unsuccessfully challenged in the Supreme Court, and penalties will be assessed to those who do not comply. The penalty in 2014 is $95 per uninsured adult or 1 percent of household income over the filing threshold, whichever is GREATER. The penalty is scheduled to increase significantly in future years.
Essentially, the law is a sweeping overhaul of the health insurance industry as it currently exists in this country. New rules effective January 1, 2014, protect individuals from being turned down for health insurance because of pre-existing medical conditions, and these conditions can no longer be excluded from coverage on policies otherwise covering other conditions. Also, individuals and families with incomes below 400 percent of the Federal Poverty Level (FPL) may qualify for assistance with health insurance premiums in the form of tax credits. The tax credit is paid monthly, in advance, directly to the insurance company on behalf of the qualified individual. Help with paying deductibles and coinsurance is available as well for individuals and families with incomes below 250 percent of the FPL. In 2014, assets will NOT be considered when determining eligibility for this assistance.
So, what does this mean in terms of dollars and cents? Currently, the FPL for a single individual is $11,490 per year. So, according to the new rules, a single individual can make as much as $45,960 (400 percent of FPL) and still receive assistance with health insurance premiums. Also, a single individual can make as much as $28,725 and not only receive premium assistance, but also, help with out-of-pocket costs like deductibles and coinsurance. For a family of four, these limits are $94,200 for assistance with premiums, and $58,875 for additional help with out-of-pocket costs.
On October 1, 2013, qualified individuals will be able to shop for health insurance two ways:
- On the Federally Facilitated Marketplace (FFM or Marketplace), formerly called the “exchange”.
- Off the Marketplace. In order to receive assistance, coverage must be applied for through the Marketplace. Insurance agents and others who have been certified to sell policies on the exchange will be able to assist clients with the process of applying for insurance and for cost assistance. One application does it all. Applications can be filed on-line, by telephone, or by paper application. The enrollment period opens October 1, 2013, and closes March 30, 2014. For a January 1, 2014 effective date, an application must be filed and approved by December 15, 2013. Once the enrollment period closes, only those with a special qualifying event will be able to purchase insurance either on or off the Marketplace.
Not everyone is eligible to purchase insurance through the Marketplace, however. For example, individuals who have “minimum essential coverage” through an employer, Medicare, Medicare, CHIP, or another source will not be eligible to participate. Individuals or families who make more than 400 percent of the Federal Poverty Level will not be eligible to receive assistance with premiums, and those with incomes over 250 percent of the Federal Poverty Level will not be able to receive help with deductibles, coinsurance, or co-payments (cost sharing), but they can still purchase insurance that is compliant with the new law.
The new law is massive, and many more details exist. For more information, visit Healthcare.gov or contact your agent.
Laura Johnson is an agent with The Johnson Agency in Madisonville, TN and is certified to sell health insurance on the Federally Facilitated Marketplace. She can be reached at 423-442-2111 or at firstname.lastname@example.org.