A while back we shared a cool video from the Kaiser Family Foundation that cleared up a lot of the confusion around health reform. Now we’d like to share a few of the most frequently asked questions about the new legislation and how it will effect people like us in the upcoming years.
1. When will the health reform law take effect?
The Patient Protection and Affordable Care Act (PPACA) was created with a five year timeline. Some provisions have already been implemented – preventative care is fully covered by insurance plans, those with preexisting conditions have access to coverage and retirees are getting relief with their Medicare drug coverage - but the majority of new protections will not take effect until Jan. 1, 2014. Check out HealthCare.gov’s complete timeline for more information.
2. What changes will we see in 2014?
In 2014, most Americans will be required to have health insurance. In the government’s eyes, this is a way to get heathy people to buy insurance so that they can help fund those who require greater healthcare.
Apart from a small percentage of Americans (who face financial hardships, have been uninsured for less than three months, have religious objections or are American Indians or undocumented immigrants) those who do not have coverage will face a penalty. Additional provisions we’ll see in 2014 are the following:
- Establishing Affordable Insurance Exchanges
- Promoting Individual Responsibility
- Ensuring Free Choice
- Easier Access to Medicaid
- More Affordable Care
- Coverage for Individuals Participating in Clinical Trails
- Eliminating Annual Limits on Insurance Coverage
- No Discrimination Due to Pre-Existing Conditions or Gender
- Increasing Small Business Health Insurance Tax Credit
3. What are these new insurance “Exchanges?”
Exchanges were 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 meet benchmarks for quality and affordability.
In addition, the exchanges will administer the new health insurance subsidies and aid in enrollment in private health insurance, Children’s Health Insurance Program (CHIP) and Medicaid. While purchasing insurance through the Exchange will not be required, it will be a good substitute to using an agent or broker.
4. How will health reform affect me if I already have health insurance?
Those will health insurance won’t be significantly affected by the new legislation as it is intended to maintain the existing employer-based insurance system. As The Washington Post explains:
At first, only small businesses and people who aren’t covered through their jobs will be allowed to buy plans on the new exchange. Over time, access to the exchange may be broadened, though this raises the possibility that if people buy insurance on the exchange instead of on the job, employer plans may be left with a smaller pool of employees who have greater health-care costs, a situation that could make those plans hard to sustain.
People now covered by individual plans will be able to get better-regulated plans on the new exchange, possibly with government subsidies. People now covered in the workplace won’t have to worry as much about losing coverage if they lose their job or want to start their own business — they would turn to the exchange for new coverage.
5. How can the US afford this?
Put simply, the US government will pay for health reform by reallocating money. Existing government health programs will undergo significant cuts in spending, like ending large subsidies to insurance carriers. A good explanation of this comes from WhiteHouse.gov,
The cuts we are talking about involve spending that currently does not improve care for Americans. For example, we would save $177 billion in unwarranted subsidies to the insurance industry in the next ten years and put that money into actual care for people. These and other reforms will strengthen and stabilize Medicare.
Right now we spend more than $2 trillion dollars a year on health care, but health insurance reform would be fully paid for over 10 years without adding to the US deficit – a small price to pay for a better system. It’s also important to note that without reform, one third of the US’s economic output would go towards healthcare in just 30 years. While there is a lot of debate around the new legislation, most would agree that the government must get a handle on the rising costs.
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