The Affordable Care Act will affect almost everyone.
However, many details of the law have been changed and are expected to change before the law is fully enforced in 2014.
How the current law will affect individuals, small businesses and larger businesses was the focus of the Cleveland/Bradley County Chamber of Commerce: Woman’s Council Luncheon on Monday.
“What we talk about today is how the law sits today. ... As they have implemented it, they have either delayed or withdrew portions of the law, so the original law that was passed is not in its same format. Basically it is going to change the way everybody purchases health insurance moving forward,” said Andy Figlestahler of Ed Jacobs and Associates.
Elements to be included in all policies will be ambulatory (not requiring a hospital stay) patient services, emergency services, hospitalization, maternity and newborn care, mental health and substance abuse disorders treatment, prescription drugs, rehabilitative services and devices, laboratory services, preventative and wellness services and chronic disease management, and pediatric services including oral and vision care.
Pam Rowe of McIntire and Associates and Pam Nelson of Ocoee Insurance Services said the pediatric oral and vision care requirement was something that had been required of prior plans.
For individuals who do not have health insurance through their jobs, a health care marketplace will be available for them to buy health insurance. Tax credits are available through the marketplace based on income.
“The marketplace … basically is like a “one-stop shop” for everybody. You can go online, put your information in, and it’s going to pull up all the benefits that are available to you from all the carriers. You just have one website you have to search, so you don’t have to go to each individual site,” Rowe said.
In addition to applying online individuals will also be able to apply through the mail or in person with an insurance broker, according to Rowe.
Retirees who do not qualify for Medicare, those who do not have health insurance and those who are self-employed qualify to apply for coverage through the marketplace as long as they are a U.S. resident or lawful citizen, live in the service area for the plan they are applying for and are not incarcerated.
Those applying go through a verification process to see if they qualify for other types of coverage such as Medicare.
“How much will it cost? Basically we don’t know yet. The plans haven’t come out yet,” Rowe said.
Oct. 1 is the deadline for the new insurance plans to be drafted. Rowe said prices will be based on age, tobacco use, family size and location.
“Right now a lot of companies just give you a family rate. Now they are actually going to individually rate each person in your family,” Rowe said.
The new system will put a cap on the maximum amount to be paid for larger families by basing the price on three children in families with more than three.
“But if you have a child that is over age 19, that lives in your house, that person is going to be rated as an adult,” Rowe said.
Application for marketplace coverage will only be able to be made during the open enrollment period.
Rowe said the enrollment period for coverage for 2014 is Oct. 1, 2013, to March 31, 2014. In the future the open enrollment will follow the Medicare schedule.
A minimal acceptable plan would have to be estimated to cover 60 percent of average medical costs.
“Most plans out there today meet that minimum value,” Figlestahler said.
This level of coverage is called the bronze level. Health care providers will be required to develop silver (70 percent ), Gold (80 percent) and Platinum (90 percent) levels.
“Plan designs have not been released yet,” Figlestahler said.
The plan adopted by an employer must meet the minimum requirements, including affordability criteria. The plan cannot cost the employee more than 9.5 percent of the his or income. Co-pays will also now be included to reach the maximum out-of-pocket limits.
“Your silver has your lowest premiums but higher out-of-pocket cost for you. Then the platinum is going to have the highest premiums, but lower out-of-pocket costs for you,” Rowe said.
Health insurance providers will no longer be able to base coverage on health questions. Instead the reforms bring about a system by which one’s geographical location determines the plans available to them, Nelson said.
“You won’t have pre-existing conditions waiting periods, you’re covered from day one,” Nelson said.
Whether someone smokes or not will still be considered a factor to determine cost of coverage, Nelson said.
Federal subsidies are available to make the new health plans more affordable. Those within 400 percent of the federal poverty guidelines for their family’s annual income will qualify, according to Rowe. An individual could make $45,960 and qualify for the assistance.
“That’s what the rates are now; it could all change by 2014,” Rowe said.
The assistance will be given in two ways, either paid up front to the insurance company or reimbursed to the individual on their tax return.
There will be penalties to individuals who do not have coverage.
“Right now there is [either] a fee of 1 percent of your yearly [total household] income, or $95 per person,” Rowe said. Whichever amount is larger is what would be paid.
Larger businesses will also be charged fees for not providing health care insurance to all full-time employees. The law counts employees working 30 hours a week as full time.
Part-time employees’ hours are added together to equal a full-time equivalency to be included in the count, Figlestahler said.
Figlestahler said penalties will be waived for the first 30 employees. After that there is a penalty fee per uninsured employee.
Businesses with fewer than 50 employees will not be charged penalties like larger businesses, according to Nelson.
“A lot of businesses that have less than 50 employees already offer a group health insurance plan, and they can choose to keep those plans,” Nelson said.
Nelson said major insurance providers have already provided smaller businesses with the option to renew early in an effort to be grandfathered in and not have to switch to one of the new policies yet.
Because of changes in tier structure prices in insurance networks, Nelson said even those insured through their job could be paying higher premiums.
Nelson said premiums could be higher for younger employees and lower for older employees.
“That is what we are expecting to see on the group side as well as in the individual markets,” Nelson said.
Nelson said the contracts involved in health care reform are going to be constantly changing.
The regulations affecting companies with less than 50 employees are expected to apply to companies with less than 100 employees by 2014, according to Figlestahler.
Penalties for companies with more than 50 employees not offering health insurance to all of will not be charged until 2015. Figlestahler said this will affect service industries the most.
Taxes the companies pay on the policies will also be affected.