Implementation of the Affordable Care Act a/k/a "Obamacare" has already begun. In the upcoming months and over the next few years, more and more pieces of the law will take effect. The complexity and sheer volume of the law require that every American start the process of becoming acquainted with its provisions. Here are some key points that will impact almost all Americans.
1. General Universal Provisions. The Act will extend coverage, via Medicaid or through private insurance. However, it does not guaranty access to healthcare nor does it control healthcare costs. Coverage cannot be denied due to pre-existing conditions. Lifetime and annual caps on coverage have been eliminated. Young adults may stay covered under their parents' insurance policies until age 26, though there are some drawbacks if they live in a different are than their parents. Women will pay the same premiums as men and unhealthy people will pay the same premiums as healthy people. Plans must provide preventative care for free. In addition, there are 10 essential health benefits that all policies are required to include, including doctor visits, maternity care and hospital visits. The architecture of the plan relies upon its individual mandate which requires everyone, with limited exceptions, to procure some level of healthcare insurance. By mandating the more young, healthy Americans to enroll, the plan's proponents believe the plan will succeed because these young, healthy consumers will help pay for the older, less healthy consumers.
2. The Exchanges. These are basically state level insurance marketplaces. 14 states and the District of Columbia are operating their own exchanges. In 36 states, the federal government is operating the exchange itself or in partnerships with several states.
3. Levels of Coverage. All policies offered in the exchanges are categorized by their "metal" level or tier of coverage. Bronze is the lowest level of coverage and will, generally, pay approximately 60% of medical costs. Silver will cover roughly 70%. while Gold covers approximately 80% At the Platinum level, 90% of medical costs are covered.
4. The Mandate. The Act's individual mandate is the most controversial component of the Act. In a narrow ruling, the U.S. Supreme Court upheld the constitutionality of the individual mandate. It requires that everyone, again with limited exceptions, procure some level of healthcare insurance. It levies fines against those who fail to do so and the fine increases every year that coverage is not acquired. There are some exemptions, but for 2014 you would pay the greater of these two options: (1) $95.00 per adult (and $47.50 per child under 18 up to a maximum of $285.00) OR (2) 1% of household income in excess of $10,000 for an individual and $20,000 for a family.
5. When Can You Sign Up For Coverage? There is a common misconception that you can sign up for coverage at anytime, even on your way to the hospital. That is not the case. There is an open enrollment period from October 1, 2013 to March 31, 2014. If you do not secure coverage during the open enrollment period, you will not be able to obtain coverage until the next open enrollment period, unless you qualify for one of the exceptions that allow special enrollment.
6. What if You Cannot Afford Coverage? The Act provides for two types of subsidies - for premiums and for cost sharing. Each subsidy has its own qualifications, based on household income. In order to qualify for a premium subsidy, you must earn less that 400% of the federal poverty level. That amount is $49,650 for an individual, $62,040 for a couple, and $94,200 for a family of four, Cost sharing subsidies can lower co-insurance, deductibles and annual maximum out-of-pocket expenses. To qualify, you must earn less than 250% of the federal poverty level. For an individual that amount is $28,725. For a couple it is $38,755. For a family of four that amount is $58,875. While you can buy any "metal" level of care with a premium subsidy, you can only purchase a "Silver" policy with a cost sharing subsidy.
7. Beware of the Scams. Regarding fraud surrounding implementation of the Act, the Federal Trade Commission said, "It's enough to make you sick. No sooner had the U.S. Supreme Court ruled on the Affordable Care Act than scam artists began working the phones. Often, these scam artists will try to convince the person they have called to reveal bank account information or Social Security numbers claiming that the information is needed in order to open an account to comply with the Act. Remember, if you get a call from someone claiming to be with the government and asking for personal information, hang up. It is a scam! For a further discussion regarding scams associated with the implementation of the Act, see the post entitled "An Important Warning for Seniors" previously published by The Hultquist Law Firm on its web site's "Items of Interest" page. You can find the article here.
8. Effect on Employers. Employers who employ 50 full time employees or 50 full time equivalent employees, must provide healthcare coverage for their employees or face stiff penalties. However, implementation of that portion of the Act has been delayed for a year. To see an easy to understand graph explaining employers' duties under the Act, and the associated potential civil liability under the Act, follow this link to an "Items of Interest" page published by The Hultquist Law Firm entitled "Employer Liability Under the Affordable Care Act a/k/a "Obamacare." You can find that article here.
9. Current Legal Challenges. While the Supreme Court has upheld most aspects of the Act, including the individual mandate, legal challenges to the Act abound. One provision under the Act requires all plans to provide for "family planning" services and birth control. The Catholic Church and Hobby Lobby are the chief opponents to this provision. Employers who are required to pay for their employees' coverage under the Act argue that this requirement violates their freedom of religion by forcing them to pay for medical care which runs counter to their religious beliefs. This, they say, violates the 1st Amendment to the U.S. Constitution. Recently, the U.S. Supreme Court agreed to hear a case initiated by Hobby Lobby. Hobby Lobby claims that this component of the Act violates its "corporate freedom of religion" which violates the U.S. Constitution's 1st Amendment. While a "corporate freedom of religion" seems like a strange concept, previous Supreme Court precedent, at least at first blush, seems to indicate that such a thing might very well exist under the law. In the Citizens United case, the U.S. Supreme Court held that campaign finance laws that restricted the amount of money corporations could spend on elections violated the corporations' freedom of speech under the same 1st Amendment to the U.S. Constitution. The high court will hear the Hobby Lobby case next year.
If you have questions regarding the Affordable Care Act or would like to post a comment, please feel free to use the comment section below or the "Contact Us" page at www.TheHultquistLawFirm.com. We will do our best to answer any questions you might have and we are interested to see what visitors to the site have to say! If you would prefer to contact us via email, you can contact Kerry Hultquist, the firm's lead counsel, at KMH@TheHultquistLawFirm.com. He will answer all emails and do his best to answer any questions you may have. If he is not the right attorney for your specific need or issue, he will attempt to introduce you to a trusted colleague who may be more able to assist you. Drop us a line. We look forward to hearing from you.
The Hultquist Law Firm acknowledges sources used in writing this article, as follows: Forbes.com; The Kaiser Family Foundation; Forbes.com; Healthcare.gov; CNN.com and The Fort Wayne Journal Gazette.