'Obamacare': a primer on new health-care marketplaces

The centerpiece health-insurance marketplaces mandated by the 2010 Patient Protection and Affordable Care Act are set to debut this week.

Come Tuesday, millions of uninsured Americans will be able to go online to review options and find out whether they qualify for government-subsidized coverage through President Barack Obama's signature law, also known as "Obamacare."

Understanding the Affordable Health Care Act: http://bit.ly/15Zg21g

These marketplaces, also called "exchanges," are run by the federal government or by states. The largest health-coverage expansion since Medicare was set up in 1965, Obamacare is expected to reduce the number of uninsured Americans -- estimated at 48 million -- and to change the options for some 20 million people who buy private insurance on their own.

Under the new law, insurers may not discriminate based on gender, income or health status or, gradually, because of pre-existing conditions. They must provide a uniform summary of coverage for each plan, and they can cancel a policy only because of fraud. Annual limits on care have been phased out and lifetime dollar limits on benefits have been stopped.

Even if you have coverage through work or another government program, you should check out changes mandated under Obamacare. Most Americans will be required to have some type of coverage by March 31 or risk a fine. Consumers can go without insurance for up to three months in any given year without drawing a penalty.

Open enrollment for many health-insurance plans, including Obamacare, occurs in the fall. For those seeking coverage through Obamacare marketplaces, consumers who enroll by mid-December will begin coverage in January. Those who buy insurance between Dec. 15 and March 31 will get coverage as of April 1.

Here are a few basics to consider as Obamacare ramps up.

Q: What do people without employer-provided coverage need to do?

A: Learn what's available through the new exchanges. The federal interactive website (www.healthcare.gov) or call center (800-318-2596) will direct you to a site specific to your state, where you can compare plans' benefits and costs based on your household, income and coverage needs. Counselors can walk you through the process online or on the phone. All assistance is provided free; beware of anyone who tries to charge you or use high-pressure sales tactics. If you suspect fraud, call the 800 number.

Although enrollment is supposed to start Oct. 1, some exchanges could have delays. Remember, you have several months to choose a plan and sign up.

Q: What about people who buy their own coverage now?

A: Many insurers are dropping plans or changing them to conform with Obamacare's new benefit requirements. Plans may have required changes because they had high deductibles or lacked coverage for mental-health services, for instance. According to early reports, some individuals and families are facing higher premiums, more restrictions on health providers and/or greater cost-sharing for services.

Some insurers have decided not to offer some or all of their individual plans through the marketplaces; people with private coverage may need to explore their options with the exchanges and with brokers. Some may be eligible for subsidies and savings on the marketplace, but many who had skimpier coverage or better ratings because of their age and health may wind up paying more.

Q: What range of health coverage will the exchanges offer?

A: All plans must offer at least minimum coverage for medical and hospital services, mental health and substance abuse, prescription drugs, rehabilitation care and laboratory testing. Certain prevention and wellness services will be available at no charge.

Four levels of insurance -- bronze, silver, gold and platinum -- differ in costs and how they're shared. The bronze level has the lowest premium, but the consumer bears the highest share -- 40 percent -- of covered treatment costs; platinum has the highest premium but the patient pays the lowest share -- 10 percent.

Premiums vary by state and locality. A White House report released last week found that, among 48 states, the monthly premium for a bronze plan averaged $249 and a silver plan averaged $328 -- before any subsidies.

All exchanges' health plans limit out-of-pocket costs for medical care, excluding premiums. In 2014, it will be $6,350 for individuals and $12,700 for a family. The amounts are expected to rise each year.

Q: Who's eligible for subsidies to help pay for insurance?

A: Generally, it's anyone making between 138 percent and 400 percent of the federal poverty level. That's $15,860 to $45,960 for individuals or $32,500 to $94,200 for a family of four. Those making the least will pay no more than 2 percent of their income for health coverage, and subsidies will cover the rest. Those at the top end will have to pay 9.5 percent of premiums.

An interactive tool from the nonprofit Kaiser Family Foundation can help consumers estimate potential government subsidies: http://kff.org/interactive/subsidy-calculator.

Subsidies, calculated during the online signup, will typically come in the form of tax credits. These can be applied toward insurance premiums or taken when filing a tax return.

You'll be able to make changes during the year if your earnings change substantially. If you underreport income, you'll face a penalty.

Q: What should people with employer-provided insurance do?

A: Many employers are changing the amounts they ask workers to pay in premiums, deductibles and co-pays. Some are reducing worker eligibility or dropping coverage of spouses. Others will give workers a fixed amount of money to shop for insurance in exchanges. If your situation changes, you might consider Obamacare.

You may be eligible for subsidies and coverage through a health marketplace if your work-based insurance costs more than 9.5 percent of your income.

Q: Is everyone required to obtain health insurance?

A: Just about everyone faces that requirement. Obamacare exempts American Indians; undocumented immigrants; people who are jailed; have religious objections; have suffered a recent financial hardship; have incomes below the threshold for filing a federal income-tax return; or for whom the lowest-priced health plan available exceeds 8 percent of their income.

Q: What happens if you don't obtain health insurance?

A: You'll pay a penalty to the Internal Revenue Service. It will start at $95 a year for individuals or $285 per family, or up to 1 percent of income, whichever is higher. For each uninsured child, you'll pay half the adult rate. By 2016, the penalty would rise to $695 per adult for individuals, or 2.5 percent of income, whichever is higher.

You'll have to provide the IRS with proof of coverage when filing your 2014 tax returns by April 2015. The IRS still is working on its rules concerning proof.

Q: What about people receiving Medicare coverage?

A: They don't have to bother with the exchanges. They're covered; benefits won't change unless they alter supplemental coverage.

Q: What about people who are on Medicaid or another public insurance program?

A: They'll generally keep their coverage, although many states are adjusting coverage to save money. States that agree to expand coverage will get extra federal dollars to help pay for it. Obamacare has provisions to expand Medicaid to cover adults making up to 138 percent of poverty income. The District of Columbia and at least 25 states have agreed to this expansion; several states are on the fence.

Q: What happens to poor people in states that have declined to expand Medicaid?

A: Adults who are not disabled, elderly or pregnant will remain ineligible for Medicaid coverage. Children are eligible for coverage, but their parents often are not.

However, in states that don't expand Medicaid, subsidies for coverage will be extended to adults making 100 to 138 percent of the poverty level ($11,500 to $15,860 for individuals). That still will leave some impoverished adults without government help to buy insurance.

(Contact reporter Lee Bowman at bowmanl@shns.com. Distributed by Scripps Howard News Service, www.shns.com.)

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