Whether a single mom working part time, a baby boomer with a pre-existing condition, a Medicare beneficiary, a business owner with 250 workers, a couple who both have insurance through work — the Affordable Health Care Act will affect you.
Glossary
Medicaid: Provides coverage for low-income children and families. The federal government and the states share the costs of the program; it is run at the state level, and states often have different standards and rules.
Medicaid expansion: Would expand Medicaid coverage to millions of Americans — including about 650,000 in Georgia — by creating a whole new eligibility category based on income. (Currently in Georgia only children and parents receive coverage based on income.) The court ruled Thursday that the federal government may enable states to expand Medicaid but may not force them to do so.
Medicare: Health insurance for people 65 and older and people younger than 65 with certain disabilities. Funded and administered by the federal government.
Doughnut hole: Medicare recipients in the prescription drug program sometimes reach a coverage gap, or "doughnut hole." In 2012 when total drug spending reaches $2,930, Medicare stops paying. The other side of the doughnut hole, in 2012, is $4,700. Once total drug spending reaches that, Medicare kicks back in. The doughnut hole is supposed to disappear by 2020.
Individual mandate: The law requires that most people have health insurance or pay a penalty. Most Americans satisfy the mandate because they already have insurance through employers, Medicare or Medicaid; uninsured people subject to the mandate are comparatively few (estimated at 10 percent of adults).
Insurance exchange: Effective Jan. 1, 2014, a new online marketplace in each state will enable people to shop for individual health insurance policies. Under the law, states may set up their own exchanges, or the federal government will do it for them.
Employer mandate: Businesses that employ at least 50 full-time workers will be required to offer health insurance as of 2014. Otherwise, the company will face fines of up to $2,000 per worker (first 30 workers excluded). Some say this will force businesses to drop coverage or lay off workers; others say the penalty will discourage employers from "dumping" employees on the exchange.
SHOP exchange: The "Small Business Health Options Program," or SHOP, is an insurance market for small employers and their workers. The SHOP exchange may be set up separately from the individual insurance exchange, or it may be part of the individual exchange.
Insurance subsidy: People who don't have insurance through their employers but don't qualify for Medicaid may still be eligible for a federal subsidy to help them pay for insurance. Those who earn between 133 percent and 400 percent of the federal poverty level can get a subsidy for insurance on the exchange. For a single person, that equates to incomes between $14,856 and $44,680.
Sources: Kaiser Family Foundation, WebMD, Medicare.gov , Medicaid.gov , Healthpolicymonitor.com , National Federation of Independent Business, Bureau of Labor Statisitcs, Patient Protection and Affordable Care Act of 2010.
Impacts: What could happen if you are ...
A middle-aged worker with a pre-existing condition: The law provides for "guaranteed issue," meaning you may not be turned down because you're already sick. The provision takes effect in 2014, but the law has set up a temporary provision — the Preexisting Condition Insurance Plan — that is available only to people who have been uninsured for at least six months and have been turned down for coverage by insurers. In Georgia, the "PCIP" premium for someone aged 45-54 can run as high as $455 per month, plus deductibles and copays.
A single worker in his early 30s without insurance: You don't have insurance through your employer and you make too much money to qualify for Medicaid. That makes you a prime target of the individual mandate. Your choice: Go to the insurance exchange to buy coverage, or pay a penalty. In 2014, the penalty will be the greater of $95 or 1 percent of income, but it will gradually increase to $695 or 2.5 percent of income in 2016. Note that the penalty likely will be less than the cost of insurance, so the "mandate" is more of a very strong suggestion. In 2014, if you earn less than $46,000 (or 400 percent of the poverty level), you will qualify for federal subsidy to help pay for the insurance you buy on the exchange.
A company with 70 workers on a "high cost" plan: By 2018, a plan that costs more than $10,200 for single coverage or $27,500 for family coverage will be adjudged "high cost" — also known as a "Cadillac" plan, typically favored by high-income people who want lots of extras. The company will pay a tax of 40 percent on the amount that exceeds those thresholds. The company may absorb the cost of the new tax or raise employees' premiums to pay for it, or it may cut benefits to lower the cost of the plan and avoid the tax.
A father earning $45,000 a year who pays $4,300 for the company's plan: Because your share of the premium is greater than 9.5 percent of your total income, you may opt out of your company's plan and go to the state insurance exchange to shop for a better deal. You may find one, too: Since your income is less than 400 percent of the poverty level, you qualify for a federal subsidy to help cover the cost of insurance you buy on the exchange. Not such a great deal, however, for your employer: He has to pay up to a $3,000 penalty because you left the company plan and got a federal subsidy to buy your own insurance.
Young parents with a chronically ill child: Under provisions of the law already in effect, your child may not be turned down for coverage because of a pre-existing condition (this will extend to adults in 2014). Previously insurers could impose both an annual limit and a lifetime limit on coverage; beyond those limits you became solely responsible for the expense of caring for your child. As of 2014, the law will prohibit both annual and lifetime limits on benefits.
An HR director for a company that employs 250 people: You're trying to decide whether the company should "pay" or "play" — that is, continue to provide the insurance you offer now (play) or pay a penalty of up to $2,000 per worker, excluding the first 30 workers (the pay option). It costs your company about $5,500 per employee to insure workers and their families. You can drop benefits and offer employees an incentive — say, an annual payment of $1,000 — to acquire their own insurance on the state exchange. Or you can continue to offer benefits as you have for years. The "pay" option appears to be a lot cheaper. The "play" option appears to be better for employees. You note how many employers, including yours, were offering insurance before they were ever required to do so. You have a decision to make.
A single mom in her 30s who works part time: Your kids will qualify for Medicaid or its equivalent until age 19, as long as your income and theirs meet the requirements. Your current income of $24,000 a year puts you on the Medicaid rolls, as well.
A two-income couple who both have insurance through work: The health care law will probably not have much of an impact on your family's insurance. As your employers' costs have gone up, the companies have already been shifting more of the cost of health care coverage onto you, so your share of the bill has been steadily rising in recent years. Too early to say whether the law's cost-containment measures will work in your favor.
A single woman earning $200,000 a year: With that kind of income, your insurance is probably not an issue, but you will soon face new payroll taxes, plus a 3.8 percent tax on investment income, to pay for Medicare. Currently workers pay 1.45 percent in Medicare taxes; for you that will increase to 2.35 percent beginning in 2013. The income threshold is $200,000 for a single filer and $250,000 for joint filers (for both the payroll tax and the investment tax.)
A retiree on Medicare with heavy prescription expenses: Your deductible for prescriptions this year went up $10 to $320, after which you must pay 25 percent of the cost of prescriptions. (Those at 135 percent of the poverty level or below pay no deductibles or copays.) Once you hit the "doughnut hole," the law provides for 50 percent discounts on name-brand drugs and 14 percent off generic drugs.
A young college graduate without insurance: Already in effect, this provision enables your parents to keep you on their insurance plan until you turn 26.
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