Starting April 1, 2014 most Americans are going to have to have health insurance or face financial penalties.
1. Many will already be insured through:
a. the public health programs (Medicare, VA, TriCare, Medicaid, Indian Health Service)
b. Employer sponsored insurance
i. Including adult children up to age 26 when employer offers a family plan
2. Those who are not insured will be required to purchase health insurance IF their income falls above income guidelines requirements. (for example, over $15,856 for a single individual, $32,499 for a family of four).
a. Options for those above income cutoff include purchasing:
i. Employer sponsored insurance
ii. A policy in the private insurance market
iii. A policy in the Exchange (through healthcare.gov)
b. Penalties for not complying
i. Will be reconciled at tax time
ii. Will increase each year.
iii. In 2014 it will cost per family member 1% of income or $95 whichever is MORE
1. Fines for children are half those of adults
2. The fine for the total family maxes out at $295
c. To expand options and to offer comprehensive insurance coverage, insurance policies are being offered in state Exchanges. Anyone can buy a policy in their state’s Exchange. No one can be denied health insurance coverage for a pre-existing condition nor can they be charged a higher premium because they are sick.
d. The Exchanges in all states are open for business. For some, the website version is working better than in others. In most of the states that chose to coordinate their own Exchanges those sites are working well. For the rest of the states, the federal website, healthcare.gov is working much more smoothly than when the website was originally launched Oct 1 and consumers are signing up.
e. Most of those who do not already have insurance and choose to purchase a policy through the Exchange will find that they are eligible for assistance for paying for health insurance premiums and even for copays for the actual care.
i. If household income is below 400% of the Federal Poverty Level (FPL) ($94,200 for a family of four) AND they are not offered affordable and adequate health insurance at work, families are eligible for assistance to pay for premiums. These are called tax credits. How much assistance is given depends on income. Families in these categories are limited to between 2-9% of that household income as the maximum amount of premium they have to pay.
1. An adequate employer based policy will cover on average 60% of the costs of medical care in a given year.
2. An affordable employer based policy will cost no more than 8% of an individual’s annual household income.
ii. If household income is below 250% of the FPL ($58,875 for a family of four) families are also eligible for assistance to pay for medical care. These are called tax subsidies. How much assistance is given again depends on income.
3. Those living below this income cutoff:
a. In states that have expanded their Medicaid eligibility criteria, these individuals
i. will be enrolled in Medicaid when they submit their application through the Exchange. The federal government is paying 100%of these costs til 2017 when states will then be asked to share the costs by contributing 10% while the feds will pay 90% of total costs.
b. In states that have not expanded their Medicaid eligibility criteria (including Kansas), these individuals
i. Will not be fined for not purchasing insurance
ii. Will still be able to private pay and depend upon safety net providers and the good graces of health care providers who provider care to those who cannot pay.