Understanding the Affordable Care Act
Major changes already implemented since passage of the Affordable Care Act in 2010 include protection from the insurance industry’s worst abuses, the introduction of preventive care and access to health insurance for vulnerable groups.
Health insurance companies can no longer cancel coverage if someone becomes seriously ill. Lifetime medical limits are now illegal. Annual insurance reimbursement caps were increased (and will be phased out entirely in 2014). If insurance companies spend more than 80 percent of the premiums collected on administrative overhead, they are required to issue rebates. All health plans must now use standardized disclosure forms to summarize benefits and project out-of-pocket costs.
Annual checkups and some preventive care, such as immunization, certain cancer screenings and well-woman visits, are no longer subject to copayments or deductibles. Changes to Medicare give seniors better discounts on prescription drugs and free annual checkups. The Everett Clinic’s Cooper says that ongoing “preventative care will not only lead to better outcomes, it can make care more affordable by reducing the need for expensive care, such as emergency room visits or in-patient hospital care.”
Children under the age of 19 with preexisting conditions can no longer be denied coverage. In addition, young adults can remain on their parents’ policies until they turn 26, whether they live at home, are married, attend school or are employed.
As a result of these changes, the U.S. Department of Health and Human Services estimates that more than 2.4 million Washington state residents no longer worry about lifetime limits on health benefits; more than 62,000 young adults gained insurance coverage through their parents’ health plans; and people on Medicare saved more than $94 million on prescription drugs.
In 2014, the focus shifts to making health care available to all, regardless of health history or the ability to pay. As of January 1, most Americans will be required to have health insurance. Individuals who can afford to pay for insurance and don’t comply will be subject to a penalty in 2014 of $95 per adult, as much as $285 for a family or 1 percent of income, whichever is greater, with penalties increasing over the next two years. Other big reforms include the elimination of preexisting condition denials for adults and the creation of an online insurance exchange with plans required to include a defined set of essential benefits, including preventive care, pediatric care and maternity care. Medicaid will be expanded—in states selecting this option—to assist low-income residents and their families to access insurance. Earlier this year, Washington state legislators voted to expand Medicaid to include individuals between the ages of 19 and 65 with incomes up to 138 percent of the federal poverty line—effective January 1, 2014.
“In King County, good health is out of reach for an estimated 280,000 people who do not have health insurance and access to preventive care,” says Chad Horner, chair of the board of directors for HealthPoint and a partner at Curran Law Firm in Kent. HealthPoint runs 17 community health centers in King County.
“The care that many of us take for granted, such as treatment for a sinus infection, provider visits to manage diabetes or exams for breast cancer detection, are luxuries to those without health care coverage,” HealthPoint pediatrician Kimberly McDermott, M.D., says. “These families are one illness away from financial catastrophe.”
Those who already have insurance they like don’t need to make any major changes in 2014 and will have noticed their insurance companies already modifying plans to comply with federal requirements, such as preventive care. According to the Washington State Office of the Insurance Commissioner, companies with more than 50 employees will be required to provide affordable health insurance, but those with fewer than 50 employees will not. Those who don’t have insurance will have new options for purchasing insurance through the Washington Healthplanfinder (wahbexchange.org), “which will allow hundreds of thousands of residents statewide to easily find, compare and enroll in quality health care plans they never have had access to before,” Washington Healthplanfinder’s Onizuka says.
Already, 24 health and dental insurance carriers have notified the state of their intent to participate in the exchange. See our “At a Glance” sidebar for details and important dates for purchasing insurance through Washington Healthplanfinder.
For those with moderate or limited incomes, cost is a big concern. Those who don’t have coverage from their employers who buy through the state exchange may be eligible for help with insurance costs, depending on family size and income level. A family of four with an annual income of less than $93,700 will be eligible for a tax credit to offset the cost of insurance premiums.