Understanding the basics of the Affordable Care Act

September 30, 2013

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The Affordable Care Act, Obamacare, Insurance Marketplaces, Health Exchanges—whatever you call it, you’ve probably been hearing the buzz around it for a long time.

But that doesn’t mean you understand it. A poll by Kaiser finds “that about half the public (51 percent), and two-thirds of the uninsured (67 percent) continue to say they don’t have enough information about the law to know how it will impact their families."

So, on the eve of the launch of health insurance marketplaces across the country, we set aside the political debates for a moment and review the basics.

If you are one of the over 300,000 people the state expects to sign-up for insurance on the Illinois marketplace this year, here are some of the key facts you need to know.

Do I have to buy insurance? What happens if I don’t?

Most people without insurance will have to buy a plan or face tax penalties. In 2014, the penalty for an individual is $95 dollars or 1 percent of your income, whichever is greater. Tax penalties can be higher for families.The penalty is scheduled to increase in coming years.

Not everyone is required to buy insurance. There are exemptions, for example, people who are a part of certain religious sects or federally recognized tribes. You also are not required to buy insurance if your income is so small that you don’t have to file a tax return, or if the only insurance you can find would require you to pay more than 8 percent of your income. You may also qualify for an exemption if you’ve experienced certain life hardships.

Illinois has expanded Medicaid, so if you earn below 138 percent of the federal poverty level (about $15,860 for an individual or $32,500 for a family of four), you can get coverage through Medicaid instead of the marketplace.

When do I have to buy insurance?

This year open enrollment will be from October 1 until March 31. In order for your coverage to start by January 1(the earliest any coverage will begin), you must purchase it by December 15.

You cannot buy insurance outside this open enrollment period, unless you experience certain big life changes. For example, you will be able to buy new insurance outside the open enrollment period if you lose your job, have a baby, or move to another state.

3. How much is this going to cost me?

That depends on a lot of factors.

Insurance companies can charge different rates based on where you live, your age, and whether you use tobacco products. The price tag also depends on what kind of insurance you buy. Insurance plans are divided into metal types: bronze, silver, gold and platinum. People under 30 also have the option to buy a catastrophic plan.

According to a press release from the state, “the lowest proposed monthly rate for a bronze plan for a 25-year-old is $120 in Chicago or $128 in Peoria; for a 40-year-old it would be $152 in Chicago or $163 in Peoria; and for 60-year old consumer it would be $323 in Chicago or $346 in Peoria.”

Bronze plans will have lower premiums, but higher out of pocket costs. Platinum plans will have higher premiums, but lower out of pocket costs. Out of pocket costs are impacted by factors such as the plan’s deductible and copayment amount.

4. Can I get any help paying for it?

If you earn between 100% and 400% of the federal poverty level guidelines, you can get help from the government to cover your premium.

Figuring out an individual's premium subsidy is one of the more confusing aspects of the healthcare law. The marketplace is expected to help you figure that out automatically. In the meantime, you can use this subsidy calculator from Kaiser.

In addition to subsidies that help cover premiums, people who earn less than 250% of the federal poverty level are also entitled to reduced cost sharing that would lower copayments and deductibles. Cost sharing help is only available for silver plans.

5. What will the insurance on the marketplace cover?

All insurance plans are required to cover ten essential health benefits. Those include maternity care, mental health, emergency services, prescription drugs and more.

6. Will I be able to see my current doctor?

You should check to see if your doctor is covered by the plan you wish to purchase. One way insurance companies are likely to keep costs down is by creating plans that have a very narrow network of providers.

7. My employer provides insurance, do I need to go onto the marketplace?

In most cases, probably not. If you are covered by an employer plan, you are not eligible for cost saving help from the government. That means your employer plan is likely your best deal.

There are exceptions. If your employer’s insurance would cost you more than 9.5 percent of your household income, or the plan doesn’t meet basic requirements, then you may be eligible for subsidies on the marketplace. In that case, your employer could owe money to the government.

One important thing to note: the 9.5 percent limit, is based on how much it would cost to cover the employee, not the employee’s family. That has led to a problem some are calling the “family glitch.”

8. This article is fine, but I still have a lot of questions. Where can I get more information?

At some point on October 1, the state will launch the health insurance marketplace at getcoveredillinois.gov. That will be the place you can browse plans and buy one, when you are ready. You can also call the state helpline at  866-311-1119.

Alternatively, you can contact a health navigator through a local organization near you. Health navigators have been trained to walk people through choosing plans.

Feel free to leave questions in the comments below or email me at sheffernan@wbez.org. We may try to answer some of your questions on-air or online.

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