UNDERSTANDING HEALTH REFORM — The basics of the Affordable Care Act

By Robin Miller • Last Updated 8:56 am on Monday, October 14, 2013

The www.healthcare.gov website provides a wealth of information for individuals, families and small business owners, including tips on navigating the marketplace website and choosing the right plan.


The government shutdown and what seems to have become a political fight over implementation of a new health care law are generating confusion in America. Amid the politics, many Americans are wondering what effect these changes will have on them.

It would be nearly impossible to understand everything within the 2,000-some pages of the Patient Protection and Affordable Care Act (ACA), also known as Obamacare, which, as of Oct. 1, intends to make health insurance widely available and more affordable for people, requiring health care plans to cover most anybody at regulated premiums, regardless of preexisting conditions.

Robin Miller

“We are in for a big change in the way the country handles health insurance,” said Chris Miller of Miller and Associates of Edmore. “It’s going to be a learning curve for everybody involved.”

As time ticks away towards the Jan. 1, 2014, the deadline for healthcare open enrollment, many consumers, including myself, are faced with several questions. To better educate myself and help me, personally, better understand the questions at hand, I searched government-sponsored websites online (mainly www.healthcare.gov) for information.

My findings certainly don’t even begin to scratch the surface of every possible situation or person involved, but I tried to touch on a few key points, which will hopefully clear up some confusion. I encourage individuals and businesses to take a moment and go online to www.healthcare.gov, navigate the website and take a more in-depth look at ACA and how it affects their particular situation.

How will the Affordable Care Act extend health care coverage in 2014?

• Individual mandate: Mandates that all Americans maintain a minimum level of health coverage or face a tax penalty.

• Insurance exchanges: Creates state-based health insurance Exchanges and provides federal premium tax credits and cost-sharing subsidies to assist low- and moderate-income individuals without affordable employer-sponsored insurance in obtaining health coverage.

• Medicaid expansion: Expands Medicaid up to 133 percent of federal poverty level.

• Employer mandate: Mandates, for the first time, that employers with 50 or more full-time employees offer coverage or pay tax penalties.

Who is eligible for insurance benefits under ACA?

According to www.obamacarefacts.com, most anyone can buy private health insurance through insurance exchanges, except for those who don’t file income taxes, including illegal immigrants and those with little or no income. They are not eligible to receive government subsidies and are not penalized. Exemptions include undocumented immigrants, prisoners and members of some religious groups (Amish people, for example) if social security benefits have been customarily declined.

Where do I sign up?

Online insurance “marketplaces” or “exchanges” opened Oct. 1 around the nation. Michigan residents may use the government website located at www.healthcare.gov to apply for coverage, compare plans and enroll. Coverage can start as soon as Jan. 1, 2014.

Where should I go to get help answering questions or to guide me through the process?

The www.healthcare.gov website provides a wealth of information for individuals, families and small business owners, including tips on navigating the marketplace website and choosing the right plan. The site also provides phone contacts, live web chats and a list of places (by zip code) offering personal help in understanding plan options and enrollment.

What is “a qualifying plan,” according to the ACA?

A “qualifying plan” is one that provides the essential insurance benefits, which include emergency services, hospitalizations, laboratory services, maternity care, mental health and substance abuse treatment, outpatient or ambulatory care, pediatric care, prescription drugs, preventive care, rehabilitative and habilitative (helping maintain daily functioning) services and vision and dental care for children, according to www.obamacarefacts.com. Starting in 2014, the ACA largely requires individual plans to provide the aforementioned essential health benefits and cover pre-existing conditions. The law also limits how much premiums can vary based on age.

What will happen if my plan doesn’t meet ACA standards?

Current health care policy holders whose policies don’t meet ACA standards will receive a letter from their insurance carrier, stating that their plan will change or be mapped into a plan mandated by Obamacare effective Jan. 1, 2014, according to Grotenhuis marketing vice-president Valerie Cramer, who works a special health care reform support center for insurance agents. Grotenhuis, located in Grand Rapids, is one of only a few Michigan general agents for Blue Cross/Blue Shield (BCBS). Local health insurance agents must place business through a general agent, such as Grotenhuis, and only general agents can communicate directly with BCBS.

What are the penalties for choosing to go without insurance?

According to www.healthcare.gov, most people must have health coverage in 2014 or pay a penalty of $95 per adult, $47.50 per child (up to $285 per family), or 1 percent of their income, whichever is higher. This fee increases every year.

How does Obamacare affect Medicaid recipients?

In August, Michigan became the 25th state to approve the Medicaid expansion, a key part of the ACA. Under new Medicaid expansion rules starting April 2014, people who previously were ineligible may now qualify. New rules state that anyone earning up to 133 percent of the federal poverty level (which currently is about $15,800 for a single person and $32,500 for a family of four, according to www.healthcare.gov) qualifies. To see whether you qualify for Medicaid in Michigan, contact a state Medicaid agency or fill out an application for coverage in the Health Insurance Marketplace. After submitting the application, applicants will be notified of plans for which they qualify. If they’re eligible for Medicaid, the Medicaid agency will be notified so coverage can start in 2014.

How are businesses affected by ACA?

The law does not require employers to provide health insurance, however, any employer with 50 or more full-time employees that doesn’t provide this coverage must pay a fee. Employers that do provide coverage must meet the minimum ACA “qualifying plan” requirements. Smaller businesses (with less than 25 employees) that pay all or part of employees’ health insurance may be eligible for a tax credit.

What about individuals who are self-employed, retired, US veterans or currently uninsured?

The insurance marketplace (www.healthcare.gov) allows the self-employed and uninsured to shop for “more affordable” health care options. Retirees may find supplemental plans that are less expensive or offer more comprehensive coverage at the marketplace. For people enrolled in a VA health care plan, no action is necessary as the plan meets ACA requirements.

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