Obamacare and You

Obamacare and You

With the implementation of the Patient Protection and Affordable Care Act, or Obamacare as many know it, now well under way, it is important to know how the law affects you.

The most controversial and important aspect of the ACA is the health insurance mandate that requires individuals who make more than $10,000 annually (or $20,000 as a family) to have health coverage.

For people who have had health insurance in the past, this changes nothing. They may keep their current coverage, either through an employer or a plan they purchase themselves. The law also allows children to remain on their parents insurance until the age of 26.

According to Alicia Hartinger, a representative for the Department of Health and Human Services, that equates to, “approximately 3.1 million young adults [who] have gained coverage through the provision … [since] September 2010.”

If you have not had insurance in the past you now have two options. Either you can chose to ignore the individual mandate and pay a fine for not purchasing insurance. The penalty is $95 in 2014; $325 in 2015 and $695 in 2016.

After 2016, the flat dollar amount is indexed to inflation and is capped at 300 percent of the flat dollar amount. For example a family of three (two parents and one child under 18) would have a flat dollar penalty of $1737 in 2016. You also are not bound by the individual mandate if your health care would cost more than 8 percent of your income after employer contributions and tax credits (subsidies.)

If you would like to abide by the individual mandate and not pay the penalty, the ACA has set up health insurance marketplaces where individuals and employers can compare plans from different insurers and purchase private coverage. In California, the insurance marketplace is called Covered California.

Insurers that sell plans on the state exchanges, like Covered California, will have to categorize each plan they sell under one of four tiers based upon how much of the policyholders total health care costs will be covered by the plan. The tiers are Bronze, Silver, Gold and Platinum with Bronze plans covering the least amount and Platinum plans covering the most. More coverage also equates to higher premiums, lower co-pays and lower deductibles.

To help decrease what some lower to middle income families pay for their health insurance, there is a limit on the amount of money any individual or family will have to spend on premiums for a Silver Plan based upon a percentage of income in relation to the federal poverty level.

The government will subsidize individuals and families making up to 400 percent of the federal poverty level if their insurance costs more than what is considered affordable.

For a family of 4 earning $47,100, they would have an income of 200 percent federal poverty level ($23,550 in fiscal year 2013) and under the law would have their insurance premiums capped at 6.3 percent of their annual income: $2967.30 or $246.27 monthly. Any health insurance cost over that amount would be subsidized by the government in the form of tax credits.

“Young adults and people for whom coverage would otherwise be unaffordable will also have access to catastrophic plans starting in 2014,”  said Hartinger. “Catastrophic plans generally will have a lower premium, protect against high out-of-pocket costs, and cover recommended preventive services without cost sharing—providing affordable, individual market coverage options for young adults under the age of 30 and people eligible for a hardship exemption.”

For those who already have insurance their coverage and doctor remain the same, but they are already experiencing some of the protections of the ACA. This includes free preventive care, including check ups, no more lifetime limits on coverage and individuals can no longer be denied coverage because of a preexisting condition.
Additional resources are available at ExploreObamaCare.com, HealthCare.gov and CoveredCA.com.