Remember the old adage from Benjamin Franklin “In this world nothing can be said to be certain, except death and taxes…”, well, we could add one more thing to this maxim “…and health insurance”.
I added this only because in 2014 there will be a new tax enforced mandate that requires all Americans to obtain basic health insurance under the ACA (Affordable Care Act), also known as Health Care Reform.
So what is Health Care Reform and why is it needed?
Let’s start by taking a long hard look at who has and who doesn’t have health insurance. In this case 43 million-plus Americans currently do not have basic health insurance, and those that want it currently may not be able to get it because of pre-existing conditions.
A not so nice example of this is a young pregnant woman who needs individual insurance right now would not be able to get basic individual insurance to cover pre-natal and post-natal medical support. Sure, there may be some State programs that could help but even these are less than comprehensive in scope.
Now roll-back to 2010 which was when this individual mandate or law came in to effect. To start there were several key milestones such as:
- Individual Pre-existing Condition Insurance Plans (or PCIP’s) made available for people with certain pre-existing conditions who have been unable to obtain insurance for six months or more
- Expanded coverage in Medicare Part D ‘donut hole’ or ‘gap’ for seniors
- Small business group health insurance credit
- Adult children can now remain on their parent’s insurance plan through age 26
- Copays, coinsurance and deductibles have been removed on preventative care visits
- No pre-existing condition exclusions for children under age 19
- No lifetime or annual limits on “essential” or basic health benefits
Note that one of the keywords used here is “individual
” insofar as the mandate makes each US citizen or resident individually responsible to show they have healthcare in place, with the compliance review being administered and enforced under the tax mandate, by the IRS.
Now you are up to speed with Health Care Reform and the changes that are already in place, you might be asking what’s still to come.
January 1, 2014 is the deadline to purchase your health insurance. Failure to do so will result in individual penalties from $95 in 2014, $325 in 2015, $695 in 2016 or 1% in 2014, 2% in 2015 and 2.5% in 2016 of your income, whichever is greater.
Employers with 50 or more full-time employees who do not offer health insurance will also be subject to fines. But it’s not all doom and gloom! Here are some of the notable scheduled changes still to come.
- Individuals with incomes up to 400% of the federal poverty level will be eligible for refundable tax credits to purchase insurance coverage through the state based exchange marketplace.
- There will be no pre-existing condition exclusions.
- Employers with more than 200 employees that offer insurance coverage must automatically enroll new full-time employees with the opportunity to opt out.
- Group waiting periods for coverage will be required to be less than 90 days.
- State-based and federally governed exchanges open beginning in 2014, which will allow people to compare and purchase health plans in the new state-based marketplace designed to make buying health insurance easier and more affordable. They will be able to use insurance brokers, such as MHG, to assist in navigating these exchanges. Plans offered on the exchanges will follow a tiered rating (such as Silver and Bronze levels offering very basic insurance and at the other end of the scale, high-end comprehensive plans. There will also be the opportunity for supplemental insurance to be offered (also called GAP plans) which will help plug any gaps in the basic insurance package, again offered by insurance brokers as needed.
So there you have it, a snap-shot on what has happened and still to come for Health Care Reform. Obviously there are risks inherent in this change, not least of which is a possible shortage of primary care physicians and an initial influx of people with pre-existing conditions previously uninsurable. This will place a strain on any Health Care Reform model but given the alternative of no universal insurance, or mounting premium costs, will be something that has to be dealt with in future years.
MHG Insurance Brokers is committed to keeping you up to date with Health Care Reform changes and legislation that may affect you. Whether you are looking for Health Care Reform guidance, health insurance for you or your family, employee benefits, dental, life insurance or long-term care, schedule an appointment with the insurance specialists at MHG to discuss your particular situation by calling 954-828-1819 or visit mhginsurance.com for more information.