Health Care Reform in the Eye of the Beholder

by Cathy Miller on July 1, 2012

in Health Care Legislation, Health Care Reform

Unless you’ve been off planet – here in the U.S. you know the Supreme Court ruled the health care reform law constitutional.

Despite the ruling, you can rest assured, we have not heard the last about the Patient Protection and Affordable Care Act (PPACA).

Let the fun begin.

Now What?

The biggest question after the court’s decision seems to be – Now what?

Let’s face it ~

  • Some of us have been in denial
  • Others welcome it
  • While still others roll with the tide

The impact of health care reform’s, PPACA, depends on your perspective – not to mention the elections in November.

As one who has never been able to (or wanted to) predict what politicians will do, let’s look at PPACA from the eye of the beholder.

  • The individual
  • The employer

There are certainly other interested parties, such as health care providers, insurers, and brokers, but we’ll stick with the consumers.

  • The following addresses the provisions for offering health insurance
  • It does not cover all the provisions of PPACA
  • Not by a long shot

Stay tuned for future posts on other health care reform provisions.

The Individual

The most significant impact appears to be the upholding of the individual mandate.

Individual Mandate

Without getting into the legal mumbo-jumbo, the Supreme Court’s decision allows the mandate that requires all Americans carry health insurance. Failing to do so can result in a tax penalty.

  • There are exceptions to the mandate, such as:
    • You have coverage through another source
    • You fit certain classifications for exclusion – for example, religious beliefs
    • Your income is below specified amounts or ~
    • Your cost for the lowest cost plan exceeds 8 percent of your income

The Kaiser Family Foundation has an Individual Mandate flow chart

State Insurance Exchanges

Many states fell into that in denial category when it came to health insurance exchanges. Citing the possibility of PPACA being thrown out, states dragged their feet on moving forward with this PPACA provision.

The purpose of health insurance exchanges is to offer individuals and small businesses a web-based platform for locating affordable health coverage.

The platform also helps with the following.

  • Identifying individuals eligible for Medicaid
  • Directing those individuals to the agency for enrollment

Medicaid – PPACA expanded Medicaid eligibility, but one provision the Supreme Court did overrule was the one threatening states with a loss of existing Medicaid funding for non-compliance with the expanded eligibility.

In other words, states  can decide NOT to expand Medicaid eligibility and still receive funding.

Here are a few of the provisions for the states regarding health insurance exchanges.

  • State exchanges must be in place in 2013
  • States can request federal grants through 2014
  • If a state elects not to establish its own exchange, the federal government will provide one

The PPACA provisions for individuals includes the following.

  • Individuals will have access to exchanges in 2014
  • Those who don’t qualify for Medicaid, may be eligible for federal subsidies
  • To qualify for the subsidy, earnings have to be below a specified percentage of the federal poverty level

The Kaiser site offers a subsidy calculator.

The Employer

According to Gallup-Healthways, as of the third quarter in 2011, 44 percent of Americans had health insurance through their employer.

The size of the employer makes a difference in how they view PPACA, This discussion is purely from a provision standpoint, and not on a particular employer’s health care utilization.

What does PPACA mean to the employer?

Employers are NOT required to provide health insurance, BUT ~

  • Large employers (50 or more full-time equivalent employees) can be penalized in certain circumstances if they don’t
  • Small employers (less than the 50) are exempt from penalties
  • Small employers are eligible (in certain circumstances) for tax credits

Yes, it’s the infamous it depends when it comes to the details.

Kaiser offers a helpful flowchart that provides those details – Employer Responsibility Under the Affordable Care Act.

Help!

For those individuals and employers who stuck their heads in the sand, don’t panic.

  1. Learn the facts
  2. Seek help
  3. Make a plan

Individuals and employers alike have several options for consideration. Here are just a few.

Individuals (assumes no available employer coverage)

  1. Will you need single or family coverage?
  2. Does your income allow for the purchase of private insurance?
  3. Does your income qualify you for a subsidy for coverage in a state health insurance exchange?
  4. Does your income qualify you for Medicaid?
  5. Do you qualify for Medicare coverage?

Employers

  1. Do you meet PPACA’s definition of large or small employer?
  2. Do you currently offer health insurance?
  3. If not, what are the projected penalties for not offering coverage?
  4. Does your current plan meet PPACA’s minimum essential benefits?
  5. Does your share of premium costs cover enough so employees are not federally subsidized?

Admittedly,  I have a bias as a licensed insurance broker (retired from sales/service). But, I recommend consulting with a broker.

Additional resources for basic information include the Kaiser Family Foundation’s Health Reform Source and Healthcare.gov.

A large numbers of provisions go into effect in 2014, but with all the political wrangling that is bound to go on, watch for changes to timelines.

May the force be with you.

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Notice of Disclaimer –Cathy Miller is not an attorney or health care provider and cannot provide legal or health care advice. The information provided is for your general background only, and is not intended to constitute legal or health care advice as to your specific circumstances. We recommend you review legislation with legal counsel and visit your physician for health care issues.

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