Back in 2010, Congress passed, and President Obama signed into law, the Patient Protection and Affordability Care Act (PPACA). In spite of the fact that the legislation ended up being passed without a key feature that President Obama wanted — a public option that would have allowed Americans access to the same plan Congresspeople have — the measure is popularly known as Obamacare.
After clearing the Supreme Court last year , mostly intact, Obamacare is getting ready to roll out in full force in 2014. Some of the provisions have been phasing in gradually , but 2014 marks the year that the provision to buy coverage or face a fine goes into effect.
Are you ready for Obamacare? Here are a few things that you need to know before January 1, 2014:
Where Will You Get Health Insurance?
For most people, Obamacare doesn’t change much about where they will get insurance. Insurance will still be connected to work for most people, and you will be able to get insurance on an individual basis and with the help of public programs. It really doesn’t change the way we get insurance at the most basic level; the main difference is that you will be required to have it, and large employers will be required to provide it, or face a fine.
State exchanges are supposed to be up and running in 2014, providing you with a place to look for insurance if your employer doesn’t offer coverage. Plans are required to meet certain standards, and be “reasonably” priced — comparable to what you would get through an employer in most cases.
This isn’t government-run health insurance, although states are in charge of the exchanges (and can decide to run multi-state exchanges, or outsource running the exchanges) and some federal money is used as a start up. States cannot set premiums.
How Much Will You Pay for Health Insurance?
As is the case right now, health insurance costs depend on where you live, and the coverage you receive. Factors that are supposed to influence your health insurance premium under Obamacare include:
- Age (the older you are, the more you pay)
- Rating areas (your locale is rated according to health risk, and higher risk areas pay more)
- Number of people covered (as with a family plan)
- Tobacco use (higher premium for tobacco users, but this is optional)
Since you will be required to buy health insurance coverage or pay a fine, it’s important to understand how this will work. It is possible to apply for exemption from buying health insurance for a few very specific reasons, but most people will have to weigh the cost of insurance vs. the cost of the fine. For the first couple of years, it might actually be more cost-efficient in some cases to pay the fine. As Obamacare further phases in through 2017, though, the fine goes up.
You can also get help paying for your health insurance premiums. For those who are eligible for Medicaid, nothing changes. You’re still eligible for Medicaid. For those who don’t qualify for Medicaid, and make up to 400% more than poverty level, there are tax credits designed to help offset the cost. The Kaiser Family Foundation  estimates that 67% of the population will be eligible for Medicaid or subsidy.
The tax credit can be applied for when you sign up for insurance. The government will determine how much should go toward your premium and pay the insurance company directly. You then just pay the remainder on a monthly premium basis. If you decide not to go this route, and pay your entire premium up front, you can apply for the tax credit at tax time and receive a refundable tax credit.
As 2014 approaches, get ready for the requirements. Read up on the law, and determine whether or not anything will change for you.
Photo: Bart Everson