Are you ready for Health Care Reform? Sweeping changes are coming to the individual health insurance policy beginning January 2014 because of the Affordable Care Act; otherwise known as health care reform, or Obama Care.
Here’s the Who, What, When, Where, and Why of health care reform, and why this matters to you:
Who? If you are under 65 and currently have an individual health insurance plan, or if you don’t have health insurance, this will affect you! Starting January 1, 2014, nearly every individual is required to have health insurance or pay a tax. (There are a few exceptions.)
What? Five “qualified” health plans will be offered: Platinum, Gold, Silver, or Bronze (called Metal Plans). These plans have you pay from 10% – 40%of your medical bills; the fifth plan is catastrophic coverage, available to people under age 30, and those who cannot afford a Metal plan. All plans have an out-of-pocket maximum for individuals/families; and ten essential health benefits. Nobody can be turned away for having a pre-existing condition. Note: As far as I know, no Platinum plans will be available in Maine. Here’s a good video on health care reform in Maine.
When? Open enrollment begins October 1, 2013 and runs through March 31st, 2014. Note: This is the only time that you can purchase health insurance (except for special conditions – marriage, divorce, birth, or move). After 2013, future open enrollments will run October 1 – December 31st. Coverage begins January 1st.
Where? Welcome to a new way to shop! It’s called the Health Insurance Marketplace (often referred to as the “Exchange”). This is an on-line market place where consumers put in their zip code, and can clearly see all the plans available to them. Presented in simple language, you can make apples to apples comparisons.
How? The electronic application not only helps you purchase a plan, but also determines your premium tax credit subsidy. This subsidy will help you pay for your plan. How much will your health insurance plan cost? It all depends on your “household income” (based on modified adjusted gross income). Nationally, If your income is between 100% – 400% of the federal poverty level, you will qualify for a subsidy. Check here to see if you qualify for a premium tax credit and/or subsidy.
Health Care Reform Affected by Medicaid
FMI Sounds good, doesn’t it? Here’s the heads up: Because Maine elected not to expand Medicaid, the poverty level range eligible for a premium tax credit is 138% – 400%. Bad news for people who fall between 100% – 138% – a problem Maine is working on.
For a family of four, 400% of federal poverty is $94,200 per year. It will be very important that you figure out your “household income” before applying. Reporting is on the honor system the first year, a cross-check with your tax filing next year will adjust whatever subsidy you received with your actual income. Under-reporting could lead to a penalty. So be very careful with this!
Karen Vachon is a freelance writer and licensed health insurance agent in Scarborough. She can answer health care reform questions. Follow her on www.facebook.com/karenvachonhealth