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Affordable Care Act

Understanding the Affordable Care Act in Westchester NY

PATIENT PROTECTION AND AFFORDABLE CARE ACT:Healthcare That's Good For You!

PATIENT PROTECTION AND AFFORDABLE CARE ACT:Healthcare That's Good For You!


The Affordable Care Act (ACA), commonly known as Obamacare was a landmark piece of legislation that began in 2010. It overhauled the United States healthcare system, with the primary goals of reduce the number of uninsured Americans, improving and broadening healthcare coverage, and putting the brakes on rising costs within the system.

Under the law Medicaid was expanded, by creatiing state-based health insurance exchanges. It also mandated individuals to have health insurance or pay a fine/penalty called an individual mandate. The penalty was more or less eliminated later, in 2019.

The biggest benefit that Obamacare brought about was adding many benefits designed to enhance access to healthcare for all Americans. Plans would have to cover a laundry list of things called 'Essential Health Benefits' such as preventive services, prescription drugs, mental health care, and emergency services. Moreover, the law prohibitted insurance companies from denying coverage or charging premiums based on existing medical conditions. It allowed young adults to continue being covered under their parents' insurance plans until they turn 26, and in some cases up to age 29.

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The other huge change was the introduction of subsidies to help make insurance more affordable. It impacted individuals and families with incomes between 100% and 400% of the federal poverty level, through tax credits, provided you obtained coverage through the health insurance exchanges.

A marketplaces called Health Care Exchanges, were set up to facilitate people buying insurance. This was well received by 'Blue states' and not soe much by 'Red states'. California, New York, Washington and other 'Blue states' set up state-based exchanges. They designed policies and greater control over the enrollment process. Conversely, the 'Red states', such as Texas and Florida, chose to operate under a federally run exchange, which provides a more standardized platform for purposes of comparing and purchasing health plans. 

When comparing insurance policies, there's a few things you'll want to consider. Cost is important but you need to look at your own health care requirements. for example, if you take medications or have a chronic condition, it could make sense to pay more for a plan that has lower up front costs, or lower out of pocket limits. Provider networks of doctors and hospitals, and covered services, should also be compared. You'll want to ensure the plan meets your own healthcare needs.

Additionally, it's wise to use the services of an independent broker (if they are compensated). You'll also want to be sure to ask about the plans ratings. Many companies have gone out of business and not all plans are the same. By carefully comparing all aspects of the plans you're considering, you'll be well positioned to can make an informed decision that best meets you financial and healthcare needs.

Navigate Obamacare

Below is a timeline of events you may find of interest: 

2010 

Enhanced Access to Insurance: New and renewing plans may no longer have Pre-Existing Conditions limitations for children under 19.

Small Business Tax Credit: A tax credit up to 35 percent is allowed on an employer’s contribution providing health insurance for employees. A credit of up to 25 percent is available for small non-profit organizations.

Prohibiting Rescissions: Prohibits abusive practices whereby health plans rescind existing health insurance policies when a person gets sick as a way of avoiding covering the costs of enrollees’ health care needs.

Elimination of Lifetime Limits and Restricting Use of Annual Limits: Health plans will no longer have annual or lifetime limits on coverage for all employer plans and for new plans in the individual market.

First Dollar Coverage for Preventive Health Services: All health plans will be required to provide first dollar coverage for Preventative Care Services, such as immunizations, Screenings and routine care for adults and children.

Dependent Coverage Extended to Age 26: Requires that all plans in the individual market and employer plans include dependent coverage, for young adults to age 26

Improving Consumer Information through the Web: Requires the Secretary of Health and Human Services (HHS) to establish a website for people to search for health insurance coverage options, in their home state.

Rebates for the Part D “Donut Hole”: A $250 rebate is available for Medicare Part D enrollees, eliminating the coverage gap that occurs between $2,700 and $6,154 in total drug costs.

Expanded Adoption Credit and Adoption Assistance Program: Provides adoption assistance exclusion by $1,000.

Low Interest Loans Encourage Students to Pursue Health Care Careers: Expands programs, scholarships and loan repayment options for health students and professionals.

Tanning Tax: A 10 percent tax is levied on indoor tanning services.

2011

Insurers Must Spend Majority of Premiums Received on Benefit Payments: Health insurers, including grandfathered plans, will have restrictions on profits and amounts that may be spent on administration. Consumer rebates will be required if less than 80 to 85 percent of premiums are not used to pay for medical benefits.

Free Preventive Health Coverage: There will be no charges for annual wellness visits, personalized prevention plan services and tobacco cessation services for pregnant women.

Discounts in the Medicare Part D “Donut Hole”: Offers a 50 percent discount on all brand-name drugs in the so-called prescription drug “donut hole” and phases in further discounts on all drugs to completely close the “donut hole” by 2020 for all Part D enrollees.

Reporting Health Coverage Costs on FormW-2: Employers must disclose the value of the benefit provided by the employer for each employee’s health insurance coverage on the employee’s annual Form W-2.

Standardizing the Definition of Qualified Medical Expenses: Sets the definition of qualified medical expenses for Health Savings Accounts (HSA), Flexible Savings Accounts (FSA) and Health Reimbursement Accounts (HRA) to the definition used for itemized deductions. Over-the-counter medicine will no longer qualify as eligible expenses.

Increased Additional Tax for Withdrawals from Health Savings Accounts and Archer Medical Savings Account Funds for Non-Qualified Medical Expenses: Penalty tax on Health Savings Account withdrawals prior to age 65 for funds not used for qualified medical expenses rises from 10 to 20 percent. The tax for Medical Savings Account withdrawals not used for qualified medical expenses increases from 15 to 20 percent.

Cafeteria Plan Changes: A Simple Cafeteria Plan will allow small businesses to set up tax-free benefits for their employees, which will reduce the administrative burden of sponsoring a cafeteria plan. The provision also exempts employers who make contributions for employees under a simple cafeteria plan from non- discrimination requirements applicable to highly compensated and key employees.

2013 

Health Flexible Savings Account Contributions Will be Reduced to $2,500 Per Year: CPI will index contributions for subsequent years.

Eliminating Deduction for Employer Part D Subsidy: Employer subsidy for prescription drug plans for employees eligible for Medicare Part D eligible retirees will end.

Increased Threshold for Claiming Itemized Deductions on Medical Expenses: The income threshold is raised from 7.5 to 10 percent. Individuals over 65 can claim the itemized deduction for medical expenses at 7.5 percent of adjusted gross income through 2016.

2014 

Guarantee Issue Coverage: Insurance companies may not refuse to sell or renew policies due to an individual’s pre-existing health conditions, or to charge a higher rate due to heath status, gender or other factors.

Annual Limits on Payments Eliminated: Coverage for Individuals Participating in Clinical Trials Guaranteed: Health plans can’t deny coverage for individuals participating in clinical trials, including routine care.

Health Insurance Exchanges: Health Insurance Exchanges are to be established in each state. Tax credits will be offered for people meeting income tests

Multi-State Option: Coverage may be available through nationwide health plans offered under the supervision of the Office of Personnel Management. At present, insurance is only offered by individual states.

Free Choice Vouchers: Workers who qualify for an affordability exemption, but not tax credits, can use employer contributions to join a Health Insurance Exchange plan.

Individual Responsibility: Most individuals will be required to purchase health insurance or pay a penalty of $95 for 2014, $325 for 2015, $695 for 2016 (or, up to 2.5 percent of income in 2016), up to a cap of the national average cost of a bronze plan premium. Families pay half the amount for children, up to $2,250 per family. After2016, dollar amounts are indexed.

Employer Responsibility: All employers with 50 or more employees must offer to pay $2,000 annually for coverage over the first 30 as long as one of their employees receives a tax credit. Waiting period to join a plan is limited to 90 days. Employers offering coverage, where employees receive tax credits must pay $3,000 for each worker receiving a tax credit up to an aggregate cap of $2,000 per full-time employee.

Increased Access to Medicaid: Medicaid eligibility will increase to 133 percent of the poverty level for all non-elderly individuals.

2015 

Independent Payment Advisory Board: A newly created Advisory Board must submit proposals to Congress to extend the solvency of Medicare, lower health care costs, improve quality and efficiency and expand access to evidence-based care.

Value-Based Compensation for Physicians: A value-based bonus program is created to promote increased quality of care for Medicare beneficiaries.

2018 

Excise Tax on Employer-Provided Health Plans: Employer coverage will face an excise tax if any plan that costs in excess of $27,500 (family coverage) and $10,200 (single coverage), increased to $30,950 (family) and $11,850 (single) for retirees and employees in high risk professions, indexed for inflation. This may be adjusted using the age and gender demographics of a national risk pool.

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