On June 28, 2012, the U.S. Supreme Court upheld key provisionsof the Patient Protection and Affordable Care Act, also known as health care reform. The court's decision unleashed new clamor from health care reform's supporters, opponents and the media. The following guide can help you cut through the hubbub and focus on the key points of the legislation and how you may be affected.
Now and in the near future
The minimum-coverage mandate and health insurance exchanges begin in 2014. Many other provisions of the Patient Protection and Affordable Care Act, along with the Health Care and Education Reconciliation Act of 2010, have been in place since 2010, including the following.
Preventive care may be 100 percent covered. New requirements for certain types of health plans require full coverage for a variety of recommended preventive services, such as cancer, diabetes and blood pressure screenings, without additional costs such as copays or deductibles.
An illness won't cancel coverage. Insurance companies can no longer drop people from coverage when they get sick due to mistakes made on applications.
Children and adults with health problems are covered. Plans can't exclude enrollees under age 19 because of pre-existing conditions. Beginning in 2014, plans will not be allowed to exclude anyone because of a pre-existing condition.
Adult children may be covered. Health insurance plans must cover adult children up to age 26 on their parents' policies, at the parents' choice. Until 2014, this provision is dependent on the adult child not having his or her own employer-offered coverage.
Coverage limits are banned. Insurance companies can't place lifetime caps on coverage. Annual caps on coverage are being phased out by 2014.
The coverage gap is closing. Each year, some Medicare Part D prescription drug coverage enrollees fall into the coverage gap, also known as the donut hole, where they must pay all prescription drug costs out of pocket. In the 2013 plan year, Part D enrollees will receive a 52.5 percent discount on brand-name prescription drugs in the donut hole. By 2020, that discount will rise to 75 percent.
Small employers can receive tax credits. Eligible businesses with fewer than 25 employees may receive a tax credit to make employee coverage more affordable. For those who qualify, a tax credit of up to 35 percent of employer-paid premiums is available. Beginning in 2014, the small business tax credits will cover up to 50 percent of premiums for up to two years.
Health insurance exchanges are being created. Some states have already begun establishing health insurance exchanges designed to allow individuals, families and small businesses to compare and shop for health plans. All states must have health insurance exchanges in place beginning in 2014.
Minimum coverage mandate will take effect soon. Beginning in 2014, most people will be required to carry minimum essential coverage or face a fine. The penalty will be based on whichever is greater: either a flat dollar amount ($95 for individuals and a maximum of $285 for families in 2014) or a percentage of income (1 percent in 2014). In 2016 the penalty amount increases to $695 for individuals and a maximum of $2,085 for families, or 2.5 percent of income (whichever is greater), and will be adjusted based on cost-of-living in years following.