What Health Care Reform Means for You

Parts of the Affordable Care Act, health reform’s official name, have already taken effect. Young adults now can stay on their parents’ health policies up to age 26, for example, and at a more mundane level, sessions at tanning salons may cost more because of a 10 percent tax on tanning services imposed last July 1. What has happened so far that will matter to individual Americans, and what is coming in 2011 and beyond? Here’s a quick rundown health insurance.

1. What’s happened so far. Health insurers can no longer impose lifetime caps on coverage, a boon for those with expensive chronic health problems like cancer or heart failure who find themselves bankrupt after their insurance runs out. Parents who have group policies through their employers are allowed to continue coverage for their unmarried children, as noted above—a pressing need especially now, with unemployment sky-high among recent college graduates. Health insurers must cover certain preventive services like osteoporosis screening for women over 65, smoking cessation counseling and interventions, colonoscopies, high blood pressure screening, and screenings for diabetes and sexually transmitted diseases. Seniors were previously required to pay part of the cost of Medicare services, including cancer screenings and annual physicals, but the law makes such preventive services free for most beneficiaries. People with serious health conditions that have prevented them from obtaining coverage will be eligible to purchase a policy from a high-risk pool health insurance in a government-subsidized exchange, at a cost similar to what healthy folks pay for their premiums. (Private insurers can still deny applicants based on pre-existing conditions up until 2014, when the exchanges open.)

2. You will have to purchase health insurance if you don’t have any, or face a penalty. As of 2014, anyone who is currently uninsured must purchase a policy or pay a penalty. Individuals who don’t qualify for government subsidies should expect to pay about $5,000 a year for a policy on the exchange, while families should expect to pay about $15,000, according to John Goodman, president of the National Center for Policy Analysis, a nonprofit public policy research organization based in Dallas. (Subsidies to reduce these premiums will be available for individuals making between about $15,000 and $43,000 and for families making up to nearly $90,000 on a sliding scale based on income. Subsidized plans for a family of four, for example, range from $1,300 per year up to $8,400 per year.) The penalty starts at $95 or up to 1 percent of income for individuals, whichever is greater, and in 2016 rises to $695 or 2.5 percent of income, whichever is greater. Families pay heftier fines—$2,085 or 2.5 percent of income by 2016. “Many are arguing that these fines aren’t high enough,” Goodman says, “and that middle-class families may simply choose to go without health insurance and pay the fine.”

3. You won’t lose coverage if you suddenly get sick, or be denied a new policy because of a pre-existing condition. Starting in 2014, insurers won’t be able to deny applicants based on, say, an earlier diagnosis of breast cancer. And they’re already no longer able to drop existing policyholders unless they can spot a clear case of fraud—like someone who failed to disclose that earlier case of cancer. In the past, insurance companies often rescrubbed policies after individuals were diagnosed with expensive health conditions.

4. You can expect longer waits to see a new doctor. That’s the downside of providing millions of Americans with more access to care without concurrently increasing the number of healthcare workers. In Massachusetts, where health insurance is universal, Boston residents have to wait about twice as long to see a doctor as people in any other U.S. city, says Goodman. Over time, though, increased demand and employment opportunities could bring more doctors and nurses flooding into the workforce, helping to alleviate this problem.

5. You could face coverage changes at work. Companies offering expensive plans with gold-plated benefits—with premiums higher than $8,000 for individuals or $21,000 for families—might be forced to scale coverage back or face fines from the government in 2019. That means you might see your vision or dental coverage or perks like seeing a specialist without preapproval from your primary-care physician disappear.

6. Women will finally get maternity coverage and nursing support. Insurers will be required to cover maternity care as they do other medical procedures, says Debra Ness, president of the National Partnership for Women and Families, a nonprofit reproductive-rights organization based in Washington, D.C. This benefit, though, won’t kick in until 2014. Another upcoming plus for postpartum moms: Employers will be required to allow an unpaid “reasonable break time for nursing mothers” in the first year after giving birth. (The bill doesn’t define whether it’s 15 minutes or 45 minutes, but this could be addressed in a future rule issued by the Department of Labor.) Employers would need to provide women a private place, other than a bathroom, to use a breast pump. The provision does, however, exempt companies with fewer than 50 workers if the requirement would impose an “undue hardship.”

7. You won’t be stuck without insurance if you leave your job. If you lose or quit your job, you could be facing outrageously high COBRA payments to keep your insurance or be left with no insurance. The exchanges, once in operation in 2014, will offer a third option—cheaper insurance, though not identical to your employer plan. If you’re living on just unemployment, you might also qualify for free healthcare coverage through Medicaid (if you don’t have a spouse who’s earning wages), a government program that’s being expanded under health reform to include all low-income adults. “If you lose your job, you’ll be able to go into the exchange and get coverage if you have a pre-exisiting condition,” says Pollitz. “That’s a huge improvement.”

8. You may be hit with higher taxes. Starting in 2013, you’ll pay a higher Medicare payroll tax of 2.35 percent on earnings of more than $200,000 a year if you’re filing as an individual or on earnings of more than $250,000 if you’re filing as a couple—an increase from the current 1.45 percent. (That comes out to an extra $500 per year for couples earning $300,000.) High-income earners will face an additional 3.8 percent tax on investment income from dividends and interest.