Affordable Care Act: The Basics

Jon Bailey, DirectorRural Public Policy ProgramCenter for Rural Affairs

Disclaimer

The Center for Rural Affairs does not offer or provide legal advice. CFRA is not an insurance agency, broker, or consultant; does not recommend any health insurance product or policy or provide any advice on the purchasing of health insurance; and does not accept any compensation or consideration from an insurance company, insurance broker, or insurance consultant.

Health Care Reform Law

Actually two bills adopted by Congress• Patient Protection and Affordable Care Act” –

Public Law 111-148, signed by President Obama on March 23, 2010

• “Health Care and Education Reconciliation Act of 2010” – Public Law 111-152, signed by President Obama on March 30, 2010

Health Insurance ReformsUnder the law, a new “Patient’s Bill of Rights” reforms key aspects

of health insurance• Provides Coverage to Americans with Pre-existing Conditions• Keeps Young Adults Covered -- If you are under 26, you may be

eligible to be covered under your parent’s health plan• Ends Lifetime Limits on Coverage • Ends Pre-Existing Condition Exclusions for children under 19• Ends Arbitrary Withdrawals of Insurance Coverage --

Insurers can no longer cancel your coverage without evidence of fraud

Health Insurance Reforms• Reviews Premium Increases -- Insurance companies must now

publicly justify any double-digit rate hikes • Helps You Get the Most from Your Premium Dollars – 80% or 85% of premium

dollars must be spent on direct health care costs or consumers get a rebate • Restricts Annual Dollar Limits on Coverage -- Annual limits on your health

benefits will be phased out by 2014 • Removes Insurance Company Barriers to Emergency Services -- You can

seek emergency care at a hospital outside of your health plan’s network• Covers Preventive Care at No Cost to You -- You may be

eligible for recommended preventive health services with no copayment • Guarantees Your Right to Appeal

All apply to most health insurance plans beginning January 1, 2014

Health Insurance Requirements

Individuals• Starting January 1, 2014, all U.S. citizens and legal

residents are required to have some form of health insurance

• Exemptions – financial hardship, religious objections• Penalty – Phased in starting in 2014 ($95 or 1% of

taxable income) to 2016 ($695 or 2.5% of taxable income)

• MARCH 31, 2014 – Deadline for 2014 insurance to avoid penalty

Health Insurance Requirements

Employers• Employers with fewer than 50 employees (FTEs) – No

requirement to offer health insurance (96-98% of all US businesses)

• Employers with 50 or more employees (FTEs) – Required to offer health insurance

• Employers with more than 200 employees (FTEs) – Required to automatically enroll employees into health plans offered by the employer. Employees may opt out.

Health Insurance Marketplaces

• ACA = Exchanges• Now = Marketplaces• Will be the new way health insurance is

purchased on the individual and small group markets

• Focus = Those who purchase their own insurance, small businesses and small groups

Health Insurance Marketplaces

Choice of plans in Exchange• Platinum – 90% cost of care coverage• Gold – 80% cost of care coverage• Silver – 70% cost of care coverage• Bronze – 60% cost of care coverage• Catastrophic – limited to those under 30,

exempt from individual mandate due to affordability

Nebraska Marketplace

Insurance companies participating:

• Blue Cross and Blue Shield of Nebraska

• Coventry Health Care

• CoOportunity

• Health Alliance Midwest, Inc.

Nebraska Marketplace

Find estimated insurance plan premium information at:

https://www.healthcare.gov/find-premium-estimates

Provides up you all estimated premiums for all plans in your county for individual and small business plans

Actual premiums will be based on individual factors and choices

Nebraska Marketplace

Nebraska Marketplace

How to apply for health insurance coverage:https://www.healthcare.gov/how-do-i-apply-for-marketplace-coverage/• By Phone – 1-800-318-2596; TTY: 1-855-889-

4325• By Paper• By Personal Help • Online – healthcare.gov

Nebraska Marketplace

• Purchasers through the Marketplace will receive premium assistance tax credits

• Those up to 400% of federal poverty level eligible for tax credits (approximately $94,200 for family of 4 in 2013 guidelines)

• Tax credit is a percentage of individual/family modified adjusted gross income

• May still purchase insurance outside of Exchange – generally not eligible for tax credit

Nebraska Marketplace

• Tax credit reduces the amount of your health insurance premium

• Specific amount of credit difficult to determine – depends on too many individual factors

• Credit can go directly to insurance company or can be claimed later on tax return

• Subsidy Calculatorshttp://kff.org/interactive/subsidy-calculator/http://www.getcoveredamerica.org/calculator/

Nebraska Marketplace

Cost-Sharing Assistance – Out-of-Pocket Expenses

• Incomes below 250 percent of the federal poverty level (about $59,000 for a family of four, about $29,000 for an individual under the 2013 guidelines)

• Eligible for cost-sharing assistance for out-of-pocket expenses• Compared to 30 percent for all other individuals and families

purchasing a Silver plan – Must purchase Silver plan• Out –of-pocket expense limit: 100-150% = 6% 150-200% = 13% 200-250% = 27%

ACA and Insurance Coverage

Essential Health Benefits• Ambulatory patient services, such as doctor's visits and outpatient services• Emergency services• Hospitalization• Maternity and newborn care• Mental health and substance use disorder services, including behavioral health

treatment• Prescription drugs • Rehabilitative and habilitative services and devices• Laboratory services• Preventive and wellness services and chronic disease management• Pediatric services, including oral and vision care

ACA and Insurance CoverageEssential Health Benefits• Apply only to individual market and small group market (less than

50 employees) • The essential health benefits are intended to mirror those provided

under a typical employer-sponsored health plan. Insurance plans must provide a package that includes those benefits, at a minimum.

• The law does not define the specific services that must be covered or the amount, duration, or scope of services. HHS will define the specific benefits within each of these categories.

• All plans sold on the Marketplace will provide Essential Health Benefits

Small Businesses and Marketplace• Small businesses may currently purchase insurance plans on marketplace• For employers and employees• Shopping feature on healthcare.gov provides information on available plans• SHOP exchange – special small business on marketplace; available November

1, 2014• For businesses with 50 or fewer employees• May apply by paper for SHOP plans and tax credits• Small business tax credits are available only for Small Business Health Options

Program (SHOP) coverage that begins in 2014• Self-employed and no employees = purchase through individual Marketplace

not SHOP• SHOP information = 1-800-706-7893

Marketplace Open Enrollment• You will be able to enroll and purchase insurance in the

Marketplace during certain times – open enrollment periods.• You will be unable to purchase insurance in the Marketplace

outside of these dates.• Initial enrollment period – October 1, 2013 to March 31, 2014• Subsequent years – October 15 to December 7 (same as

Medicare D)• Exceptions to open enrollment period – changes in life

circumstances – child, married, move, lose a job, etc.

Choosing Insurance in the Marketplace

Key Decision Points• #1 = How much coverage do you want? May depend on subsidies you

receive• #2 = Qualify for cost-sharing subsidies? Must buy Silver plan to receive• #3 = How to apply subsidy• #4 = Weighing risk vs. coverage – higher premium is more coverage;

lower premium is more risk• #5 = Weighing out-of-pocket costs – tolerance for risk• #6 = Provider choice – Doctors/hospitals in network?• Finally = Ask for Summary of Benefits and Coverage• Buy!

Marketplace Help

There will be people trained and certified to help you understand your health coverage options and enroll in a plan.

• Navigators• Application assistors• Certified application counselors

Insurance agents and brokers can also help you with your application and choices.

Marketplace HelpNeed More Information?

• Website: https://www.healthcare.gov• https://www.cuidadodesalud.gov.es

• By phone: 1-800-318-2596 (24 hours)• 1-800-706-7893 (small businesses)

• TTY: 1-855-889-4325

• Live chat: https://www.healthcare.gov/chat/

Medicaid Expansion• U.S. Supreme Court = ACA constitutional, expanding Medicaid a state

option• ACA Medicaid expansion – anyone up to 138% of poverty level

eligible for Medicaid• Adds childless adults as Medicaid eligible population• 138% poverty level = $32,500 for household of 4; full-time minimum

wage for single person (2013 levels)• Governor Heineman = Nebraska won’t expand Medicaid• LB 577 filibustered in Legislature in 2013• Could be a big thing for small businesses • LB 887 in 2014 Legislature • Coverage Gap

For more information

Jon BaileyCenter for Rural Affairs402-687-2100jonb@cfra.orghttp://www.cfra.org/policy/health-care/researchhttp://www.cfra.org/policy/health-care

Questions

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