Confused about the Patient Protection and Affordable Care Act, or "Obamacare"?
You're in good company.
In a recent Kaiser Family Foundation poll, more than half of the participants expressed a lack of knowledge about the personal impact of Obamacare. With the program hitting full swing next year, the continued widespread confusion speaks to a massive public relations failure. There's a lot of information out there, and the majority is either biased or difficult to digest during a lunch break.
But here's a no-muss-no-fuss beginner's guide to the changes coming soon. Note that these questions pertain to those who will buy individual insurance. I'll have another guide up shortly for Medicare and Medicaid.
1. When do the health insurance exchanges start? What if my state doesn't have one?
The health insurance exchanges, or HIX, will serve as the public marketplace where people can comparison shop for private insurance. HIX open this October, but the purchased plans won't become effective until Jan. 1, 2014.
Some states agreed to run a HIX, and those will feature insurers with contracts in that state. For example, Cigna (NYSE: CI ) bowed out of participating in Connecticut's exchange, but Aetna and UnitedHealth remain among the options.
If your state opted out of hosting a HIX or won't have its HIX ready in time, the federal government will have a HIX set up for you to purchase a plan. Click here to see where your state currently stands with its exchange.
2. How much will this insurance cost me?
The short answer is that premium costs will vary. The purpose of Obamacare is not only to offer coverage but to offer better coverage than has been widely available. If you currently pay a small premium for less-than-ideal coverage, there's a chance that your premium will go up.
Vermont recently became the first state to set new premiums, and the costs were essentially flat with what people were paying before Obamacare. But as The Washington Post's Ezra Klein explains, Vermont's state laws have required insurers to offer better than average coverage. States that have slacked in that department will have a greater chance of increased premiums.
Hard numbers aren't possible at this point. But a particularly educated guess has premiums for the uninsured dropping 14% while premiums for the already insured increasing the same percentage.
(How can the uninsured have lower premiums than nothing? The number is based on how much they would've paid if they had insurance prior to the Obamacare.)
3. Will I receive assistance paying for my new insurance?
Federal subsidy tax credits will become available next year for people who purchase insurance through the exchanges. To receive the credit, you must not qualify for Medicare or Medicaid and should have annual income that's at or below 400% of the federal poverty level, which comes out to $43,320 for an individual.
The amount of the subsidy varies according to income. If you're near the 400% line, your premium paid isn't to exceed 9.5% of your income, while those at only 133% of the poverty level will receive credits to keep premiums below 2% of annual income.
4. What's the penalty for opting out of insurance?
The controversial health mandate penalty -- sometimes referred to as a tax -- will be either a flat rate or percentage of household income, depending on which is larger, and will slowly build up to the full payment in 2016. At that point, the flat rate is $695 per person or 2.5% of household income.
This fine helps encourage more healthy people to join the exchanges to help offset the increased risk taken on by major insurers such as UnitedHealth.
Check here to see if your situation exempts you from the penalty and for a yearly breakdown of the costs.
5. I have a pre-existing condition. Will I go broke trying to pay my premium?
Health insurers formerly had the ability to offset risks by either denying coverage or jacking up premiums for those with pre-existing conditions. But Obamacare limits those types of behavior.
Insurers can't deny coverage or increase premiums based on pre-existing conditions. Premium adjustments can only happen based on age, tobacco use, size of family, and where you live.
Did I miss your question?
Ask away in the comment section and I'll do my best to provide you with an answer. Keep an eye on this space in the future as I'll dig deeper into Medicare, Medicaid and some of the other changes.
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