Oct 23

Affordable Care Act: Know This

HELENA — The Affordable Care Act’s health insurance marketplace and individual insurance mandate are getting all the publicity now, but there’s a lot more to the lengthy, complex health care law passed by Congress in 2010.

Here’s a look at some of the ACA’s other key elements:

Pre-existing health conditions: As of next year, health insurers cannot deny or delay coverage for anyone because of a pre-existing health condition. Insurers also can’t use that condition to adjust rates.

Limits on insurance company profits: The law requires health insurers to pay at least 80 percent of premium revenue on medical claims, and pay customer rebates if they don’t. In 2012, more than 13,000 Montana insurance customers received an average rebate of $170, totaling $1.5 million.

Narrowing the “doughnut hole” for prescription drug coverage: Senior citizens on the Medicare drug plan have lower out-of-pocket costs. In 2012, nearly 10,000 Montanans got a 50 percent discount on drugs when they hit the doughnut hole, a tier of usage that’s not covered. They saved $6.5 million, an average of $656 a person.

Young adult coverage: The law allows young adults to stay on their parents’ policy until age 26. Through 2011, some 12,000 Montanans took advantage of this provision. Preventive services fully covered: Those on Medicare and regular health insurance generally don’t have co-payments for some preventive services, such as cancer screenings.

Community health center funding: These federally funded clinics, which serve lower-income customers across the state, have received more than $15 million in grants under the ACA to expand their services.

Reinsurance fee: Next year, everyone with health coverage will pay $63 each to fund a reinsurance pool that will help pay for high-cost claims from those who buy policies on the marketplace.

Medicare taxes on the wealthy: This year, those earning more than $200,000 ($250,000 for a married couple) saw their Medicare payroll taxes increase from 1.45 percent to 2.35 percent. They also must pay a 3.8 percent Medicare tax on investment income.

Other taxes: The pharmaceutical manufacturing industry ($3 billion next year), health insurers ($8 billion next year) and medical device sales (2.3 percent this year) also are paying new taxes to help finance the health care overhaul.

Resources to find out more about ACA

HELENA — For consumers who have questions about Montana’s new health insurance marketplace and Affordable Care Act regulations and programs, several websites and phone numbers offer answers:

www.healthcare.gov: The main website for the marketplace, operated by the federal government. It explains the marketplace and can guide you through the process to purchase health insurance and determine whether you can get a government subsidy to help pay for it.

1-800-318-2596: The federal call-in center for questions about the marketplace.

www.montanahealthanswer.com: State Auditor Monica Lindeen’s website where consumers can ask and get answered questions about the marketplace and ACA. Lindeen is Montana’s top insurance regulator.

1-800-332-6148: The toll-free telephone line to Lindeen’s office, for questions about the ACA.

www.kff.org/health-reform: The Kaiser Family Foundation, a nonprofit that’s probably the leading independent source on health care reform and the Affordable Care Act. The site has a wealth of information and news about the law, its effects and how it works.

www.familiesusa.org/resources/tools-foradvocates/guides/federal-poverty-guidelines.html: A site where you can see how your household income compares to federal poverty levels, which are used to determine if you’ll get a subsidy on the marketplace to offset the cost of health insurance policies. Subsidies are available for most families earning from 100 percent to 400 percent of the poverty level.

Glossary of Terms

Major new laws come with their own jargon, and President Barack Obama’s health care overhaul is no exception. With the first open enrollment season kicking off for the uninsured, here are some terms consumers might want to get familiar with:

Affordable Care Act — The most common formal name for the health care law. Its full title is the Patient Protection and Affordable Care Act. Opponents still deride the law as “Obamacare,” but Obama himself has embraced that term, saying it shows he cares.

Employer mandate — A federal requirement that companies with 50 or more workers pay a penalty to the government if one of their workers obtains taxpayer subsidized coverage through the law. Delayed one year to Jan. 1, 2015. Intended to keep companies from “dumping” employees into public coverage.

Individual mandate — A federal requirement that virtually everyone in the United States has health insurance, either through an employer, a government program or by buying his own plan. Effective Jan. 1, 2014. Exemptions for financial hardship and religious objections. Does not apply to immigrants living in the U.S. illegally. People who ignore the mandate will face fines from Internal Revenue Service.

Essential health benefits — Basic health benefits that most health insurance plans will have to cover starting in 2014. They include office visits, emergency services, hospitalization, rehab care, mental health and substance abuse treatment, prescriptions, lab tests, prevention, maternal and newborn care, and pediatric care.

Marketplaces — Online health insurance markets in each state where consumers can get private health insurance, subsidized by the government. They used to be called “exchanges,” but the feds decided that was too confusing and started calling them “marketplaces.” Still, some states stuck with the original name. Open enrollment starts Oct. 1, and the coverage takes effect Jan. 1, 2014. Fifteen states and Washington, D.C., are running their own marketplaces, according to a tally by The Associated Press. The Obama administration is taking the lead in 35 states, in some cases partnering with the state government.
All the marketplaces can be accessed online through healthcare.gov. Small businesses will have their own marketplaces.

Medicaid expansion — The health care law also expands the federal-state safety-net program to cover more low-income people. Medicaid is expected to account for about half the 25 million uninsured people who, the Congressional Budget Office estimates, eventually will gain coverage through the law. The federal government will pay the full cost of the new coverage from 2014-2016, then phase down to 90 percent. Twenty-four states plus Washington, D.C., have accepted the expansion, according to AP’s count. Eight states are still considering it. And 18 have rejected it, including Texas and Florida, which have many uninsured residents. Many adults below the poverty level will remain uninsured in the refusing states. A state can change its decision at any time, but the full federal payment for the expansion is only available through 2016.

Metal levels —The four levels of coverage available through exchange plans, called bronze, silver, gold, and platinum. Bronze plans feature the lowest monthly premiums, but cover only 60 percent of average costs. Platinum plans have higher premiums and cover 90 percent of expected costs.

Pre-existing condition — An ongoing or past health problem. Currently insurers can use pre-existing conditions to deny or restrict coverage, or charge more. Those practices will be barred by federal law starting Jan. 1, 2014, and insurers will have to accept all applicants.

Tax credits — Government health insurance subsidies for individuals will come in the form of tax credits. The money will be paid directly to the consumer’s health plan, to help cover premiums. The subsidies are on a sliding scale based on income. Each year, people will have to “true up” with the IRS to make sure they got the right amount. People who receive too generous a tax credit may owe money back to the government.

Tax penalty — The fine levied on individuals who disregard the individual insurance mandate. It starts small and gets bigger in subsequent years. In 2014 it’s $95 or 1 percent of taxable income. By 2016, it’s $695 or 2.5 percent of taxable income, whichever is greater. Thereafter it’s adjusted for inflation.

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