WebMD's Health Insurance Navigator Answers Your Questions
By Lisa Zamosky
WebMD Health News
Reviewed by Louise Chang, MD
June 29, 2012 -- The Supreme Court's decision on the health care reform law left many people confused about their health insurance and what will happen in the future. Here, WebMD answers some of the most common questions that came in from readers after the ruling.
How does this decision affect those with a preexisting condition?
Starting in 2014, insurers will no longer legally be allowed to deny coverage to anyone because of their medical condition or charge them more for that coverage.
How will it affect people that already have good health insurance and a preexisting condition?
If you already have private insurance or you're enrolled in Medicare or Medicaid, you will not be required to buy new or additional insurance because of the health reform law. Generally, you can stay with your current plan if you're happy with it.
Many people who buy insurance on their own (meaning they don't get it at work) and have a preexisting medical condition, however, have held onto pricey coverage because their health condition prevents them from switching plans. Starting in 2014, these people will have greater freedom to shop for coverage and to determine if another plan better suits their needs, because insurers will no longer be allowed to deny people coverage based on prior medical diagnoses.
How can I afford to buy health insurance if I am currently uninsured?
One of the law's major goals is to make health insurance more affordable.
If you don't get insurance through your job, you will be eligible to buy coverage through state-based insurance marketplaces scheduled to be up and running for open enrollment by fall 2013 for insurance coverage that will start in January 2014. To make insurance affordable for millions of Americans, tax credits will be available for people with incomes that are between 133% and 400% of the poverty level (up to $92,200 annually for a family of four in 2012).
There will also be caps placed on how much people will be required to spend in total out-of-pocket costs, including deductibles, co-pays, and co-insurance. These amounts will also be determined based on a person's income.
"The bottom line is there is help to pay for out-of-pocket costs and help to pay for premiums," says Mila Kofman, JD, a research professor at Georgetown University's Health Policy Institute.
In addition, the law expands the number of people who qualify for Medicaid, the state and federal health insurance program for people with low incomes. That means millions of people who don't qualify for Medicaid today will in 2014. An individual that makes less than $14,856 or a family of four that earns less than $30,657 will be eligible.
I thought the Supreme Court changed something about the Medicaid expansion rules.
It did. The Supreme Court's decision now gives states the freedom to decide for themselves whether they want to expand their Medicaid program. "They don't have to," Kofman says.
People who live in states that choose not to participate may find themselves without insurance coverage in 2014. However, Kofman says, states will likely be under pressure from hospitals and insurance companies that rely on that money to expand their Medicaid programs to include more people.
Will procedures for seniors be limited? Is it up to a panel? Will they limit some procedures for those over 65?
No. There is absolutely nothing written into the law that aims to limit medical care for seniors. In fact, the law expands services to people over the age of 65 who have Medicare coverage.
Since the law first took effect in 2010, more than 5 million seniors who entered the gap in Part D prescription drug coverage known as the "donut hole" have saved $3.7 million on prescription drugs. The donut hole is scheduled to close completely by 2020 as a result of the law.
In addition, the law has given millions of people on Medicare access to preventive medical services, such as annual wellness visits, cholesterol, and other heart disease screenings, as well as cancer screenings including mammography and colonoscopies with no annual deductibles, co-pays, or coinsurance for these services.
How does the "tax" on the uninsured work?
Beginning in 2014, you'll have to indicate on your tax forms whether you have health insurance (and your coverage will need to meet minimal essential benefit standards).
So, if you make more than 133% of the federal poverty limit -- and right now that's $14,856 a year for an individual and $30,657 for a family of four -- the law says you must buy health insurance or pay a penalty on your taxes.
You also won't face a penalty for not buying health insurance if you are a member of a religion that's opposed to health care, like the Christian Scientists, for example; you're a member of an Indian tribe; you're an illegal immigrant; or you're in jail.
There's also no penalty to pay if you don't make enough money to file a tax return, or if buying health insurance would cost more than 8% of your income, after taking into account any employer contributions or tax credits.
Some people will be exempt from having to buy insurance or pay the tax on the basis of financial hardship, including people making just $9,500 a year.
If you don't fall into one of those groups, you'll need to buy insurance.
And remember that many people with low incomes will for the first time get health insurance through Medicaid (meaning they won't pay a premium).
What if I Still Don't Want to Buy Insurance?
If you choose not to buy health insurance, you'll owe an additional amount on your taxes.
In 2014, the fee will be $95 per adult and $47.50 per child up to $285 per family, or 1% of family income, whichever is greater. Those fees more than triple in 2015; and by 2016, adults who don't buy insurance will owe $695 and $347.50 per child, up to $2,085 per family, or 2.5% of family income, whichever is greater.
The good news for people who already buy their own health insurance -- an estimated 18 million Americans -- is that they will be able to get better coverage, and it may cost less, says Sara Collins, PhD, vice president for Affordable Health Insurance at the Commonwealth Fund, a private foundation and health research group.
"That is something to look forward to, a big difference for people who are buying on their own," Collins says.
Other experts agree.
"There are many wonderful effects of this law that standardize what the product of health insurance is," says Andrew Bindman, MD, a professor of medicine, health policy, epidemiology, and biostatistics at the University of California, San Francisco.
The law will "create a mechanism, akin to a farmers market" to allow individuals to more easily compare prices and products, "and having that competition, the price of the product will come down."
For example, most insurance companies don't offer maternity coverage to women who buy their own health insurance. Starting in 2014, the ACA makes maternity coverage standard on all plans.
It also mandates that insurance companies offer benefit packages that cover treatment for mental health concerns, such as depression, and for substance abuse. That means your plan will pay at least part of the cost if you want to see a psychologist or psychiatrist.
Will my costs go up as a result of the law?
That's a point up for debate, and the answer you get will likely depend on who you ask. An Urban Institute study, for example, found that by eliminating insurers' ability to charge people more on the basis of age, small-group markets and individuals will see their premiums rise by as much as $1,400 for people between the ages of 18 and 34 and $800 for people aged 35 to 44.
However, Kofman points out that the law requires insurers to spend at least 80% of the premiums they collect on medical care. This summer, insurers will be returning money to nearly 13 million people who were overcharged for their coverage. "That alone has constrained premiums in many states," Kofman says.
There are other aspects of the law as well, according to Kofman, designed to keep premiums stable so consumers don't experience a huge jump in prices.
What happens to my under-26-year-old child who is currently on my health insurance plan?
The provision of the Affordable Care Act that allows adult children to stay on their parents' health plan until their 26th birthday does not change as a result of the Supreme Court's ruling. Your child can continue to gain coverage through you.
Will small business employers be required to provide health insurance, or can they force employees to go buy their own?
Starting by 2014, businesses that employ 100 or fewer workers will be able to buy insurance through an insurance marketplace, or exchange. According to the Congressional Budget Office, the insurance small businesses buy through an exchange "would have lower administrative costs, on average, than the policies those firms would buy under current law, particularly for very small firms."
Also keep in mind that if you run a small business that employs fewer than 25 workers earning less than $50,000 a year, and you pay for at least half of your employees' health insurance costs, you may qualify for a tax credit of up to 35%. Starting in 2014, those credits increase to 50%.
What about illegal immigrants?
Insurance coverage will not be extended to people who are in this country illegally. And there will be mechanisms by which states will be able to verify the lawful status of someone applying for insurance coverage through one of the exchanges. "There will be a pretty vigorous process to go through to make sure coverage is only being offered to people here legally," Kofman says.
How does the ACA affect those who are treated through the VA?
The health reform law does not make any significant changes to TRICARE or Veterans Affairs coverage. So, if you're an active or retired member of the military, your current coverage will not be impacted. Also, you will not be required to purchase any additional insurance coverage. (That goes for people with a combination of Medicare and TRICARE coverage as well.)
Will Catholic hospitals/colleges be forced to pay for contraception or abortions?
Starting in August of this year Catholic hospitals, colleges, and other employers will have to offer free preventive care, which includes birth control, through the insurance they offer employees.
Brenda Goodman contributed to this article.
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