Helpful FAQs compiled by the experts at Commerce to help consumers understand what federal health care reform means for them.
The health insurance reforms adopted as part of the Patient Protection and Affordable Care Act (PPACA), and the subsequent reconciliation bill, are phased-in over the next 5 years. Most provisions will not take effect until Jan. 1, 2014. However, some new protections must be implemented when plans renew after Sept. 23, 2010. In addition, a new federal high risk pool program will begin this summer and greater transparency will be required of health care plans in the coming months.
Information on when individual provisions of the PPACA become effective is available on our web site:
Immediate insurance market reforms
Longer term insurance market reforms
The key goal of the health care reform law is to ensure that nobody can be denied coverage or be priced out of coverage due to a health problem. If you allow people to wait until they have a health problem to purchase insurance, the health insurance market simply will not work. There would be a small number of very expensive choices for everyone. So, the law requires that everyone have minimum coverage, creating a larger pool of both sick and healthy individuals.
The health reform law requires that insurers and employers providing dependent coverage to children make that coverage available to adult children of enrollees up to their 26th birthday. This requirement becomes effective for "plan years" beginning Sept. 23, 2010, so you will be able to enroll your child in group coverage at the first open enrollment period following this date. Because the individual market coverage does not use plan years, the U.S. Department of Health and Human Services will have to clarify when this requirement will become effective for individual plans.
The health reform law does not indicate whether or not an insurer may charge an additional premium for coverage of adult children, which will have to be determined in the near future. If the child is 19 or older, the health plan may exclude coverage of pre-existing conditions for a period of time, as allowed by existing state and federal law until the prohibition on pre-existing condition exclusions takes effect in 2014.
Exchanges are the central mechanisms created by the health reform bill to help individuals and small businesses purchase health insurance coverage. Beginning in 2014, an Exchange will be established in each state to help consumers make valid comparisons between plans that are certified to have met benchmarks for quality and affordability. The Exchanges will also administer the new health insurance subsidies and facilitate enrollment in private health insurance, Medicaid and the Children's Health Insurance Program (CHIP). Nobody will be required to purchase health insurance through the Exchange, though subsidies will only be available for plans sold through the Exchange. If you would rather buy your insurance through an insurance agent or broker, you will be free to do so. If not, you will be able to purchase insurance in a matter of minutes on the Exchange's Web site.
Beginning in 2014, single adults earning between $10,830 and $14,400 will be able to choose whether to enroll in Medicaid or to purchase coverage through the Exchange with a generous federal subsidy. Those earning less than $10,830 will be eligible for their state's Medicaid program, but not for subsidies in the Exchange.
Low- and moderate-income individuals and families whose employers do not subsidize health insurance coverage will be eligible for subsidies that enable them to purchase coverage through the Exchange in their state. The amount of these subsidies, which will reduce premiums and out-of-pocket costs for deductibles, co-payments and coinsurance, will depend upon the size of your family and your household income.
If your insurance company "rescinds," or retroactively cancels, your health insurance coverage, it will be required, in plan years beginning Sept. 23, 2010, to provide advance notice of its intention to do so, and may only do so if you committed fraud or made an intentional misrepresentation of an important fact on your application. If your insurer notifies you that it wants to rescind your policy, and you have not done either of these things, request more information from the company. If you are not satisfied with their explanation, immediately contact the Minnesota Department of Commerce Consumer Protection & Education Division through email or call 651-296-2488 or 800-657-36012 (outside Twin Cities area). If you prefer, you may file a complaint online, at https://eapps.naic.org/cis/fileComplaintMap.do.
Yes, nothing in the legislation would infringe upon the ability of an individual to contribute to a Health Savings Account (HSA), or discourage an individual from doing so. The minimum level of coverage required to meet the individual mandate was specifically designed to allow for the purchase of a qualified high deductible plan that would complement the HSA.
Unfortunately, the grim fact is that health care spending is likely to continue rising faster than general inflation well into the future, resulting in higher premiums. While some individuals and families with health problems may see their premiums decrease significantly under the new rating rules, for most Americans premiums will continue to increase from year to year. However, the new regulations are designed to prevent unreasonable and unexpected spikes in premiums and, over time, to slow the growth in health care spending.
The total cost over 10 years is projected to be $940 billion. This is more than offset by cuts in spending and increased fees and taxes, resulting in a reduction in total spending of $138 billion over 10 years, according to the Congressional Budget Office. Time will tell if these estimates are accurate and whether the offsets materialize.
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