Understanding the Affordable Care Act
The Affordable Care and Patient Protection Act (also known simply as the “Affordable Care Act” or “Obamacare”) will provide affordable, quality and accessible health care for every American. The new law focuses on wellness and prevention, economic security and entrepreneurship, the well-being of working families and the strength of the middle class.
Marketplaces will soon enable families and individuals who are uninsured to buy quality, affordable coverage. The insurance landscape will be more transparent than ever, with summaries of coverage and premiums available for every plan in the marketplace.
Some ways the ACA will impact Americans
- Each American will be guaranteed some form of health insurance or risk being fined up to 1% of their income in 2014, with fines increasing every year.
- Medicaid would be extended to families who are at the 133% poverty level instead of the previous 100% poverty level for states who are willing to participate.
- It will create exchanges, or virtual marketplaces in each state where individuals and people employed in small businesses pool their purchasing power to shop for plans.
- Beginning in 2014, no citizen can be denied insurance or given a higher premium because of a pre-existing condition.
- There are no longer caps on coverage for Americans at $1,000,000
- Children are able to stay on their parents’ insurance plan until the age of 26 and children under the age of 19 are eligible for more service such as dental/vision coverage and hearing tests.
California’s Health Exchange: Covered California
One of the key components of Obamacare is creating a new mechanism for purchasing coverage called an exchange. These exchanges will be set up in states who wish to participate by creating an organized and competitive market for health insurance. Each market will offer a choice of health plans that are established and approved among common guidelines, such as the prices of insurance plans, conditions of each plan, and rates of premiums.
For the state of California, this exchange is called Covered California. Covered California is the only place where you can learn about and use federal financial assistance that can help lower your health care costs and make direct comparisons for different health insurance plans.
For more information on enrolling in the California Health Insurance Marketplace for Individuals or in California’s SHOP for small businesses you can visit Covered California or call (800) 300-1506.
Who Benefits from the ACA?
Individuals and small businesses can compare different health insurance plans using the exchange, allowing individuals to learn if they qualify for federal financial assistance that can lower the cost of health insurance.
How much with the ACA benefit/cost me?
For estimates on how much it will cost you to purchase health insurance and the amount of your financial assistance please use the Cost Calculator.
What Kind of Help is Available to Make Health Insurance more Affordable through Covered California?
- Tax credits are available to lower the cost of health coverage for individuals and families who meet certain income requirements and do not have health insurance from an employer or a government program.
- Cost-sharing subsidies reduce the amount of out-of-pocket health care expenses an individual or family has to pay. These expenses might include the co-payments for health care services or other costs.
- Medi-Cal is expanding to cover people under age 65, including people with disabilities, with income of less than $15,000 for a single individual and $31,180 for a family of four. The coverage is free for those who qualify and part of the provisions of the Affordable Care Act.
Do I have to use Covered California to get Health Insurance?
No. You are able to go through Covered California or directly to your health insurer, but you will pay the same premium. In order to get a subsidy, however, you must go through Covered California.
What if I’m a business owner?
The Obama Administration has put out a new tool that allows employers of all sizes to access a one-stop-shop of educational and background materials on how ACA implementation is affecting businesses.
The tool will provide information that is customizable based a company’s location, size, and their plans for offering health benefits to their workers next year. It will include a timeline of key implementation dates, a glossary of healthcare terms, information about SHOP Marketplaces and tax credit eligibility, and resources to help calculate the firm’s number of full-time equivalent employees. Click here to find out how this will affect your business.
How about if I own a Small Business?
While businesses with less than 50 employees are not required to enroll in Covered California, small business owners have a large amount of benefits available to them if they participate in Covered California.
- Make insurance affordable by spreading insurers’ administrative costs across more employers.
- Small business tax credits are available when you offer health coverage for your employees through Covered California.
- Choose your own level of contribution toward your employees’ coverage and make a single monthly payment through Covered California rather than to multiple plans. Your costs will remain constant because you control the amount of your contribution.
Resources for Small Businesses
- Marketplace SHOP
- Covered CA for Small Business
- Tax Credit Info
- Employer Shared Responsibility Payment
- Actuarial and Minimum Value Calculator
October 1, 2013: Enrollment begins for individuals in the Health Insurance Marketplaces and for small businesses in the SHOPs.
January 1, 2014: Coverage begins for individuals in the Health Insurance Marketplaces and for small businesses in the SHOPs.
- To make coverage affordable in the Marketplaces, premium tax credits become available for those with incomes between 100% to 400% of the poverty level (between $23,500 to $94,200 for a family of four in 2013).
- For those states that choose, Medicaid is expanded to cover all those with incomes up to 138% of the poverty level, with the federal government paying 100% of the cost for first three years, phasing down to 90% of the cost by 2020 and beyond.
- A prohibition on all discrimination by insurance companies against Americans due to pre-existing conditions begins.
- A prohibition against all discrimination by insurance companies against women begins.
- The elimination of all annual limits on insurance coverage begins.
- The small business health insurance tax credit increases from covering 35% of a business’s premium costs to 50% of a business’s premium costs.
March 30, 2014: The enrollment period ends for calendar year 2014 for individuals enrolling in Individual Health Marketplaces and for small businesses enrolling in SHOPs.