Your Summary on Healthcare Reform

Determining Disability

There’s no question about it, the new changes in healthcare can be difficult to understand.

The Affordable Care Act affects everyone in some way, whether it’s having to choose an insurance plan for the first time or figuring out how your employer’s plan is changing. For small businesses, it might mean no longer being able to offer insurance to employees.

Here are some basic things you need to know.

First off, this is not a “government plan.” Unless you qualify for Medicaid or Medicare, you’re buying insurance from a private company. The law—the Affordable Care Act and Obamacare are the same thing, by the way—just changed the guidelines and rules. Second, there’s no getting out of it. Starting this year, the law requires that most people purchase health insurance or pay a fine.

In many cases, you don’t have to do much of anything if you’re continuing to receive health insurance through your employer or have a grandfathered plan. But if you don’t, you’ll have to purchase an Affordable Care Act compliant plan.

And the clock is ticking: The open enrollment period ends March 31.

After that, you can’t sign up unless you have a qualifying event like marriage, a birth, involuntary loss of job, divorce, or a death in the family. For those currently in a plan (excluding group) that was purchased prior to Jan. 1, (and after March 23, 2010) they are allowed to wait until their renewal to make the transition.

It used to be that purchasing your own insurance meant having to answer a slew of medical questions, from your height and weight to past medical conditions. Your medical risk would determine what kind of plan you could get—or if you could get one at all.

That’s not the case anymore. Insurance companies can’t ask questions, or use any of your medical history to determine your coverage. The only rating question they are allowed to ask is in regards to tobacco use, which may result in a higher premium. And they can no longer deny coverage to people with pre-existing conditions, which is one of the big changes the law made. There’s also no waiting period for benefits to start.

It’s true that many people are seeing rate increases. Why? Because under the ACA, insurance companies have to automatically cover things they didn’t before, including contraceptives and preventative care such as mammograms, physicals and colonoscopies. There are also new fees that are being passed along to consumers. Both of those changes raise premiums. 

Think of it this way: If your auto insurance company started covering oil changes, car washes, new tires and your personal property tax, wouldn’t it make sense for that insurance to go up? With health insurance, you’re not getting free preventative care as it’s often touted. You’re still paying for it in some way.

The healthcare reform law requires almost everyone to get health insurance, so that means healthy people need to find plans, too, even if the coverage is minimal. The thought is that eventually, once the young and healthy buy plans along with the medically at-risk, the numbers will balance and in turn stabilize premiums.

For families, it used to be that you could cater a plan to your situation—employee plus child or employee plus family, which covered all children. Now, to determine a family’s premium, the rates of all family members are put together. The premium change can be significant.

That’s when you start to factor in tax credits. A family of four can make up to around $95,000 and qualify for a tax credit. But, there’s also the matter of whether children can instead be covered by Virginia’s health insurance program for kids, called FAMIS. In some cases, it might make more sense for children to be covered under FAMIS and mom and dad have their own plan.

If you work for a small business that employs fewer than 50 people, you might find yourself no longer being offered insurance through the company and instead encouraged to get your own. This may be a better option for some employees as an employer doesn’t have to pay for your whole family, but just a portion of the employee’s premium.

If it all sounds confusing, it’s because it is. There are also four different levels of insurance plans, called the metal levels—bronze, silver, gold and platinum. Similar levels of coverage have always existed (remember good, better, best?)—just the wording has changed. Insurance companies have been trying to map people into plans that are comparable in benefits, not premiums. So if the premium seems too high, it may be possible to go into a more affordable plan.

The best way to sort through all the confusion is to enlist the assistance of a broker.