What you need to know about health care mandates

The Sacramento BeeOctober 1, 2013 

Love it or hate it, the launch date for the country's sweeping new health care mandates is just around the corner. Next week, the essential piece of the federal government's Affordable Care Act kicks in, allowing everyone across the country to sign up for health care coverage.

Starting Oct. 1, consumers will need to make some choices, whether they're currently covered at work, have been buying health insurance on their own, or never had it in the first place.

"We're getting slammed" with inquiries, said Anne Gonzales, spokeswoman for Covered California, the state's new health care exchange offering policies under the new law. "People are very focused on Oct. 1, but we've already been taking phone calls from consumers and people trying to get educated."

Although health care policies can't be purchased online until Oct. 1, "We encourage people to call in ahead of time," said Gonzales, "so they can shop and compare. There's no reason to wait."

While there's been much heated debate over the merits of affordable health care in the past four years, there are some definite positives. Among them: Everyone will be entitled to 10 "essential services," and you can't be denied health care for pre-existing conditions, whether it's diabetes, cancer, AIDS or anything else.

Whether it'll be cheaper depends on your family circumstances and your health care needs.

"People who've been declined (for pre-existing conditions) all these years will be happy. But if you're a family of four making $90,000 a year, you're going to see a big increase," said Carrie McLean, director of customer care at eHealthInsurance.com, an online health coverage comparison site.

That's due to a combination of lower caps on what everyone has to pay out of pocket for medical expenses, as well as the mandated coverages required of all health care policies. To cover those costs, health care companies are raising rates on certain policies and premiums.

Here's a look at some of the basics:

COVERED AT WORK: If your employer provides health care insurance, you're already in the loop. No doubt you've been invited to company presentations, directed to websites or received information packets about changes in your company's health care plan for 2014.

Open those packets; attend the meetings; go online to look at your options. During this year's open enrollment, it's more critical than ever.

Some companies are changing carriers, offering incentives or switching some benefits. Some are urging employees to consider health savings accounts, for instance. And unlike years past, where employees may have been automatically enrolled in a company's health care plan, this year's changes often mean consumers need to proactively take steps to ensure they're enrolled. If you forget to sign up, you may be out of luck until 2015.

BUYING IT YOURSELF: If you've never had health care insurance, either because you were too young, had a pre-existing condition or your employer didn't provide it, now's your chance to get coverage and shop for the best rate.

Insurance on the exchanges comes in four levels: bronze, silver, gold and platinum. At the lowest level, bronze, your monthly premiums will be the cheapest, but you'll pay more for doctor visits and co-pays. The plan will cover about 60 percent of your medical costs. At the higher gold and platinum levels, your premiums are higher but you'll pay less when you see a doctor or buy a prescription. Those plans will cover 80 percent to 90 percent of your costs.

OPTIONS FOR YOUNG ADULTS: Adult children up to age 26 who are covered on a parent's health care plan can remain so; the new enrollment season does not affect their status. But depending on what your employer charges for dependent premiums, it may be cheaper to have your son or daughter buy a single health insurance plan. It also can make sense if your child lives out of state and has to use costlier, out-of-network doctors and hospitals.

Young adults who don't have coverage from Mom or Dad or from an employer can purchase individual plans. They're also eligible for a special, limited category of health insurance called "catastrophic coverage." Available to those 30 or younger, it doesn't cover regular medical expenses, such as doctor's visits, prescription drugs or even an ER visit. Instead, it's designed to handle "excessive medical bills" that could come with a hospitalization or serious illness.

Compare the "catastrophic" price with the lowest-level bronze premiums to see if the savings are worth the limited coverage.

A LITTLE PAIN -- PENALTIES: If you don't sign up for health care coverage, there are tax penalties that phase in over three years. In 2014, the first-year penalty for not buying health insurance is 1 percent of annual income or $95 per adult, whichever is greater. The maximum penalty per family is $285.

By 2016, the penalty will be 2.5 percent of income or $695 per adult, with a maximum per family of $2,085. After that, it's adjusted for inflation.

The penalty is based on the number of days or months you go without coverage after March 31.

A LITTLE HELP -- SUBSIDIES: To make mandatory health care coverage more affordable, the federal government is providing subsidies, either tax credits (to help cover premiums) or cost-sharing (to help cover out-of-pocket costs), or both. The only way to apply for a subsidy is through a state-sponsored exchange.

Generally, if you're single and make up to $46,000 a year, you will qualify for assistance. For a family of four, you can make up to $90,000 and still qualify.

Note: In most cases, if you're covered at work by your employer, you won't qualify for a federal subsidy. The only exception is if your company's annual health care premiums are more than 9.5 percent of your household income.

As bewildering as some of the choices may be, you don't have to have everything wrapped up by Oct. 1. "Take a deep breath and know that you have some time to make a decision," said eHealthInsurance's McLean.

"Give it some time. You don't have to see and shop it all at once."

Affordable care: fast facts

Background: The Affordable Care Act was passed in March 2010, requiring all Americans to sign up for health insurance, ideally by January 2014. Those who don't will face tax penalties.

Basic care: Under ACA, all health care plans must cover 10 essentials: outpatient services; emergency services; hospitalization; maternity/newborn care; mental health and substance abuse services; prescription drugs; rehabilitation (for injuries, disabilities or chronic conditions); lab services; preventive/wellness programs and chronic disease management; and pediatric services.

Policies: Sold by insurance brokers or through new, state-sponsored online marketplaces, called exchanges. The only catch: to be eligible for a federal subsidy to cover premium costs or out-of-pocket expenses, you must purchase through a state exchange.

For information: www.healthcare.gov

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