Health Care Reform Bill: Your Questions Answered

This week, the talk of all talk surrounds the historic health care reform bill that was passed by Congress on Sunday. Aside from the political back and forth that's come as a result of it, this legislation affects you and your family at the end of the day. Not sure how? We answer some of your most pressing questions:

Q: How soon will the uninsured receive coverage?

A: For the most part, not until 2014.  That’s when the government begins providing tax credits to help people who can’t otherwise afford to pay health insurance premiums. The aid will be available on a sliding scale to households making up to four times the federal poverty level, or about $88,000 for a family of four.

A four-person family making around $40,000 will pay only about 5 percent of its income. But the same size family making $80,000 will pay nearly 10 percent of its income. Medicaid will be expanded to cover people up to 133 percent of the poverty level, or about $29,300 for a family of four.

Starting that same year, health insurance companies would have to take all applicants. They could not deny coverage to people in poor health, or charge them higher premiums. More than 30 million people will gain coverage, and by 2016 about 95 percent of eligible working-age adults and their families would have health insurance. Most would buy their coverage through health insurance exchanges, new state-based purchasing pools. Undocumented immigrants wouldn’t be able to participate.

Q: Will any changes take effect immediately?

A: Yes, many. For example, starting this year, health insurance companies will not be allowed to cancel coverage if you get sick. Lifetime dollar limits on coverage will also be banned. Insurers would be prohibited from denying coverage to children because of a pre-existing medical condition.

In another immediate change, the bill starts to close the gap in the Medicare prescription drug benefit right away. Seniors who fall into that coverage gap will get a $250 rebate this year. 

Q: Is it true that everyone will be legally required to have health insurance?

A: That is correct. Individuals would be required to carry health insurance, either through an employer or a government program or by buying it themselves. Those who refuse would get fined by the IRS. The penalty will be phased in, starting at $95 or 1 percent of income in 2014, whichever is higher, and rising to $695 or 2.5 percent of income in 2016. But families would not pay more than $2,085. Those exempt include American Indians and those with religious objections or a financial hardship.

By the way, employers aren’t required to offer coverage, but companies with more than 50 workers could be hit with hefty fines if just one of their employees gets government-subsidized coverage. (The plan provides tax credits to help smaller companies get and keep coverage for their employees.)

Q: How will the plan affect young college students who may not be able to afford their own insurance?

A: For families who can afford insurance, parents will get to keep adult children on their health plan until they turn 26, as long as that adult-aged child is not eligible for workplace insurance. This change takes place immediately.

Q: Can I keep my current healthcare plan?

A: You can keep your current plan, or, you can buy coverage through new state-run insurance marketplaces, called “exchanges,” starting in 2014.

By 2016, premiums for individual policies will be 10 to 13 percent higher than the average premium that year under current law, according to Congressional estimates. But most people would qualify for subsidies, meaning they might pay less than they do now.

High-income earners — families making more than $250,000 — will pay several thousand dollars more in Medicare payroll taxes starting in 2018. Their unearned income, now exempt from the payroll tax, would also be subject to a 3.8 percent levy.

If you have coverage through an employer, starting in 2013, flexible spending accounts, which allow users to escape taxes on many medical expenses now, will be limited. There will be a $2,500 maximum on accounts that typically carry $4,000 or $5,000 limits now, and you will no longer be able to use the accounts for over-the-counter medicines.

Q: How will the plan affect Medicaid?

A: You and your children can maintain eligibility and receive free preventive services. States cannot cut people from Medicaid until the exchanges start operating in 2014, unless a state faces a budget shortfall. Many preventive services would be offered without cost. States cannot cut children from Medicaid or the Children’s Health Insurance Program until 2019.

Anyone with an income below 133 percent of the poverty level — or about $29,327 in 2009 for a family of four — will be eligible for a rejuvenated Medicaid program, beginning in 2014. Medicaid’s reimbursements will be increased to the same level as Medicare, making more doctors willing to accept it.

Information gathered from www.thebeehive.org 




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