What does the Affordable Care Act mean for you?
How will the ACA affect your coverage? Are you:
Gaining Coverage: Uninsured gaining individual coverage or Medicaid
Already Coverage: Insured through employer or individually through a grandfathered plan
Losing Coverage: Insured and losing current coverage
Wondering how many Americans fall into each of these categories, this report from the U.S. Census Bureau provides a look at health insurance coverage and insured/uninsured rates: Income, Poverty, and Health Insurance Coverage in the United States: 2012
Many uninsured Americans will be eligible to purchase subsidized coverage through one of the new health insurance marketplaces. For some, health insurance has just been too expensive. For others, pre-existing conditions prevented them from finding affordable coverage; that is if they could get approved for coverage at all. 25 states and the District of Columbia have also chosen to expand Medicaid, allowing many lower income Americans to access coverage. “An informal survey of 14 of those states by The Associated Press shows that at least 240,000 people had enrolled in or applied for the expanded safety-net program as of the third week of October.”
Approximately half the population is covered by employer based health insurance. Employees may see higher monthly premiums combined with an increase in their share of the premium, or more limited access to doctors and hospitals, but this is to be expected, even without the ACA. Some employees may experience changes to their employer coverage as employers choose to send their employees to private exchanges; offering a defined contribution and allowing employees a choice of plans. The affects of the ACA may be more directly felt if the healthcare law’s new tax on expensive insurance plans forces employers to cut back on benefits in order to avoid the tax – employees could see higher deductibles, copayments and coinsurance as a result of changes.
The group most negatively affected by the ACA, would be those losing their current health insurance. These are people who purchased health insurance through the individual market but are now losing that coverage (either a non-grandfathered plan or the carrier chose to cancel the policy of their own accord).
According to NBC News, sources involved in the Affordable Care Act say that “50 to 75 percent of the 14 million consumers who buy their insurance individually can expect to receive a “cancellation” letter or the equivalent over the next year.” Policies that don’t meet the minimum benefits established by the ACA will be terminated unless they existed in their current form prior to 2010. Carriers are issuing new policies with richer benefits; “many of those forced to buy pricier new policies will experience “sticker shock.” There are several factors contributing to the cancelation of policies, including:
1) Normal market turnover: According to BenefitsPro, “Language in PPACA regulations from July 2010 stated “40 percent to 67 percent of people” in the individual market normally change plans in a year, and thus would no longer be in grandfathered plans.”
2) Some insurers sold policies after the ACA was passed, knowing the policies did not meet requirements and would be terminated.
3) Policies in effect as of March 23, 2010 will be grandfathered; however, if any part of that policy was significantly changed, it loses grandfathered status.
Carriers terminating policies:
- Florida Blue is terminating about 300,000 customers whose policies the carrier says aren’t sufficiently comprehensive under PPACA – about 80 percent of its individual policies in the state
- Kaiser Permanente in California cancelled 160,000 policies, about half of its individual policies in the state
- Highmark in Pittsburgh announced it was withdrawing five of its insurance plans that don’t comply with the law – or about 20 percent of its individual market customers
- Independence Blue Cross cancelled 45 percent of its individual policies in Philadelphia
Whether you are gaining coverage, losing you current coverage or experiencing no changes; there are many factors that will affect how the ACA affects you. While your current coverage status is just one factor that may affect your ability to afford health insurance, there are others, including:
- one’s eligibility to receive subsidies, which could bring the out-of-pocket premium price down
- where you live, as urban areas tend to have lower healthcare costs than rural areas, due to lower healthcare costs
- the type of exchange that was implemented in your state, federal or state/partnership
- the number of insurers offering exchange plans, as competition can influence prices by putting downward pressure on premiums
- current state regulations and policies regarding health insurance (including benefits, deductibles, out-of-pocket limits, and lifetime maximums). If pre-ACA policies don’t cover essential benefits, the addition of new benefits, lower deductibles, co-pays, and out-of-pocket expenses, and the implementation of lifetime maximums can all cause premiums to rise.
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Jillian Carlile Research Analyst & Health Exchange know-it-all Strenuus firstname.lastname@example.org
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