guest post by Peter L. Beilenson, M.D., M.P.H.
October 1, 2013 was probably the most significant day in American health care policy since the inauguration of Medicare and Medicaid in 1965, nearly 50 years ago. On the first day of the month, the most important mechanism for increasing access to newly available affordable health insurance—the virtual marketplaces known as the “exchanges”—became accessible to the public. As might be expected of such a gigantic technological effort, many of the exchanges around the country have failed to live up to their potential so far. This is partly because demand far greater than expected has crashed systems with inadequate band-width. But a lack of testing of these complicated systems is also responsible. Nevertheless, as the six-month-long enrollment process continues, the exchanges will certainly begin operating more smoothly.
Now that the Affordable Care Act’s (ACA) healthcare exchanges are up and running, the pieces of President Barack Obama’s signature legislation are finally falling into place, despite the concerted efforts of congressional Republicans. This handy primer of sorts will help you make sense of your options and responsibilities as a healthcare consumer in the new United States health care system.
Under the ACA (which polls show has significantly more public support than Obamacare—despite both being exactly the same program!), affordable coverage will become available for tens of millions of our citizens who currently can’t afford health insurance. I’ve found the easiest way to explain the changes to our system is to do so from the perspective of where an individual currently sits in the system.
A) You currently have Medicare (primarily those age 65 and older). There is no need to change your coverage and there are virtually no changes to the program, other than some improvements, like a prohibition on co-pays for preventive services.
B) You currently have health coverage through an employer (as do a majority of Americans). Generally, you will not need to do anything either. Because the vast majority of employers provide a significant portion of their employees’ health insurance premiums, most employees will do better financially by staying with their employers’ plan than to go it alone on the exchange. Of course, if an employer drops their coverage, those affected employees are eligible to go on the exchange to shop for insurance.
C) You are currently on Medicaid (primarily very poor adults and their dependents). Again, nothing changes. If currently eligible for Medicaid, you will continue to be eligible for Medicaid.
D) You are currently uninsured (either by choice or lack of affordable options). The Affordable Care Act can help make affordable, quality health coverage attainable for each of the following categories of individuals:
- If you are under the age of 26, you can stay on your parents’ insurance policy
- If your annual income is below 138% of the Federal Poverty Level (e.g. below $16,000 for an individual or below $33,000 for a family of four), you are very likely eligible for newly expanded Medicaid (Maryland was one of the first states to take the federal government up on its generous 100% share to cover all newly eligible Medicaid recipients for the first couple of years of the ACA), at NO cost to you. A major change in eligibility for Medicaid is that one does NOT have to have a dependent child in order to qualify.
- If your annual income is between 138% and 400% of the Federal Poverty Level (e.g. $16,000–$46,000 for an individual or $33,000–$94,000 for a family of four), you are very likely eligible to go on the Maryland Health Benefit Exchange, where you can shop for comprehensive health coverage and receive federal subsidies—in the form of tax credits—to make buying a policy more affordable. These subsidies can be quite substantial at the lower range of the income scale—as much as hundreds of dollars a month—and more modest as one moves up the income scale.
In addition to providing increased access to affordable coverage, the ACA also implements many insurance reforms, most notably eliminating pre-existing condition exclusions, annual and lifetime caps on coverage, and rescission of coverage for technical reasons.
However, in order to cover the millions of Americans who have high costs from chronic conditions and catastrophic events, as many people as possible have to be “in the pool” to spread the risk—especially healthy young adults. To encourage individuals to obtain insurance, the ACA contains a tax penalty, upheld by the U.S. Supreme Court in 2012, to be assessed on anyone who does not obtain health coverage. In the first year, the penalties for individuals and families are so low that they probably will not push many into the risk pool who don’t want to buy insurance. However, by 2016, the penalties go to several hundred dollars for individuals and over $2,100 dollars for families without coverage, which many experts believe will be a sufficient incentive to get coverage.
There you go! That’s the ACA in 800 words!
Peter Beilenson is the former health commissioner of Baltimore City and Howard County, Maryland. He is now the CEO of Evergreen Health Cooperative, a non-profit health insurance cooperative enabled by the Affordable Care Act. He is also the author of a new book about urban issues, Tapping Into The Wire: The Real Urban Crisis, published by the JHU Press.