The 5 Most Misunderstood Parts of New Health Care Law
Straighten out the facts
The United States Congress signed the Patient Protection and Affordable Care Act (ACA) in March 2010. The open enrollment period started October 1, 2013 and will continue through March 31, 2014.
Click through this slideshow to learn the truth behind some of the most misunderstood aspects of the Affordable Care Act. Knowing the truth can help you better prepare for when you’re ready to purchase insurance for yourself or your family.
The penalty portion of the Affordable Care Act might be the most contentious portion of the new law. It might also be the most misunderstood.
Starting in 2014, individuals who can afford health insurance will have to purchase it or face a penalty. The penalty starts out low in 2014, but it increases every year after that.
However, some people will not have to pay the penalty. These include people who:
- do not have insurance for less than three months of the year
- have very low income and cannot afford insurance, even with lower premiums or tax deductions
- do not file a tax return because their income is too low
- qualify for the expanded Medicaid program but cannot take advantage of it because their state has chosen not to expand the Medicaid program
How the law affects people with employer-based health insurance
If your employer offers you health insurance and will continue to in 2014, nothing changes for you. You can keep this health insurance.
However, if your employer does not provide health insurance or if the insurance your employer does provide does not meet your needs, you can apply for health insurance through the Marketplace. Keep in mind; you will have to cover all of the premiums for insurance purchased through the exchange. Your employer is not required to pay any of your premiums. Also, you forfeit tax credits or financial assistance if you drop your employer-provided health insurance in favor of insurance through the Marketplace.
Before switching from your employer-provided insurance, consider all the possible costs you may incur.
Private companies sell all of the individual plans available in the Marketplace. Insurance companies want your business. In order for the Marketplace to work, insurance companies need you to purchase insurance. Therefore, insurance companies will keep their plans competitive and offer you reasonable deals.
When you apply for coverage, you will be given a range of options. Depending on what you pick, your final cost may vary. Know your budget before you begin shopping. Some plans will offer lower premiums, but your deductibles may be higher. Some plans may have lower deductibles, but your monthly premiums may be higher. Factor the monthly expense of premiums into your budget. Pick a plan that best suits your current situation.
Who gets the tax credits
The Act requires that all individuals who can afford health insurance buy it or pay a penalty. Some people cannot afford the insurance or the penalty. For those people, the Act provides ways to offset the costs.
The Advanced Tax Credit can be used to help pay your monthly premiums. You will be given an early tax credit that can be applied to each month’s premiums.
Some people will be eligible for lower-cost health insurance options or lower-cost premiums. Lower-income individuals and families may also qualify for Medicaid.
You will find out if you are eligible for any of these cost-reducing options once you apply for health insurance through the Marketplace.
You cannot be denied again.
Don’t let a previous rejection deter you from applying when open enrollment begins. Beginning in 2014, health insurance companies cannot turn you away because of a pre-existing condition. They also cannot charge you more if you have one. Women cannot be charged more just because they are female.
There is one exception to this rule. If you already have an individual health insurance plan and choose to keep it, that insurance company can deny you coverage for a pre-existing condition. These insurance plans are grandfathered in by the law and do not have to abide by the no-rejection rule. If you would like a pre-existing condition covered, you can apply for and purchase coverage during the open enrollment period.
Sort out the truth before you buy.
You may be confused by some aspects of the law. The law is long and complicated, and even though it’s been around a few years, few people really understand every piece of it. You should sort out what’s important to you before you begin the application process. Once you understand how the law affects you and your family, you can look at purchasing health insurance more clearly. After all, having health insurance is vital for you and your family. It’s important you understand the most important parts.
- The Requirement to Buy Coverage Under the Affordable Care Act. (n.d.) The Henry J. Kaiser Family Foundation. Retrieved September 9, 2013, from http://kff.org/infographic/the-requirement-to-buy-coverage-under-the-affordable-care-act/.
- What if someone doesn't have health coverage in 2014? (n.d.) The U.S. Centers for Medicare & Medicaid Services. Retrieved September 9, 2013, from https://www.healthcare.gov/what-if-someone-doesnt-have-health-coverage-in-2014/.
- When will prices be available for Marketplace insurance plans? (n.d.) The U.S. Centers for Medicare & Medicaid Services. Retrieved September 9, 2013, from https://www.healthcare.gov/how-much-will-marketplace-insurance-cost/.
- What if I have job-based insurance? (n.d.) The U.S. Centers for Medicare & Medicaid Services. Retrieved September 9, 2013, from https://www.healthcare.gov/what-if-i-have-job-based-health-insurance/.
- Glossary: Premium Tax Credit. (n.d.) The U.S. Centers for Medicare & Medicaid Services. Retrieved September 9, 2013, from https://www.healthcare.gov/glossary/premium-tax-credit/.
- What if I have a pre-existing health condition? (n.d.) The U.S. Centers for Medicare & Medicaid Services. Retrieved September 9, 2013, from https://www.healthcare.gov/what-if-i-have-a-pre-existing-health-condition/.
- Affordable Care Act. (n.d.) U.S. Department of Health & Human Services. Retrieved September 9, 2013, from http://www.hhs.gov/opa/affordable-care-act/index.html.