FAQ: The Affordable Care Act

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The Affordable Care Act—better known as Obamacare—makes profound changes to the business of health care in America and so, not surprisingly, people have a lot of questions about how it works and what their options and requirements are under the law. Here are answers to frequently asked questions about the health care law and types of available plans. You can also learn more about the Affordable Care Act and its various provisions in this interactive timeline.

When does the law take effect?

When the Affordable Care Act was signed in 2010, health insurance reforms began rolling out in a five-year phase. While some new protections have already been implemented—including children being able to remain on a parent’s policy up to age 26—many provisions will not take effect until January 1, 2014.

What if someone doesn’t buy insurance?

If someone who can afford health insurance does not get coverage in 2014, he or she may have to pay a fee. The fee in 2014 is one percent of yearly income or $95 per person for the year, whichever is higher, and the fee increases every year. Exceptions include people who are covered by veterans health care programs, and those on Medicare or Medicaid.

What if I have job-based insurance?

If you have health insurance through your job, you most likely can keep it. Your employer can tell you whether the insurance plan it offers meets the minimum value required under the law.  If you’re self-employed with no employees, you’re not considered an employer. In that case, you can use the individual marketplace to find coverage that fits your needs.

Why am I required to purchase health insurance coverage?

The key goal of the health care reform law is to ensure that nobody can be denied coverage or be priced out of coverage due to a health problem. Proponents of the law say that the market will not work if healthy people don't have health insurance because that would result in much higher premiums for those who do need it.

What does "marketplace insurance" cover?

All insurance in the marketplace exchanges offer the same set of essential health benefits and do not reflect the quality or amount of care the plans provide. These benefits include, but are not limited to the following: emergency services; maternity and newborn care; mental health services; prescription drugs; pediatric services; preventive services; rehabilitative services and devices.

What are "exchanges”? How do I enroll?

Federal and state-run exchanges are the central mechanisms created by the ACA to help consumers purchase health insurance coverage.. Consumers can purchase coverage on the exchange’s website or through approved insurance agents. The law does not require anyone to purchase insurance through an exchange, though governmenet subsidies will only be available for plans sold through an exchange.

How do I choose a plan?

There are four categories of marketplace insurance plans: Bronze, Silver, Gold and Platinum. All plans must design their cost-sharing (deductibles, co-pays, co-insurance) to fit into specific levels of coverage. The differences among categories affect monthly premium costs, the portion of bills paid for hospital visits and prescription medications, and total out-of-pocket costs.

What if you have a pre-existing condition?

Beginning January 1, 2014, insurers will be prohibited from discriminating against individuals with pre-existing conditions in offering or pricing health insurance policies.   In addition, for those with qualifying incomes, subsidies will be available to reduce premiums and cost-sharing for plans purchased through a marketplce exchange.

How will my out-of-pocket costs be affected?

All plans sold or renewed in 2014, must limit the out-of-pocket exposure of consumers to approximately $6,000 for individual and $12,000 for families. These limits will be indexed to average premium growth in future years. The deductible for plans in the small group market will be limited to $2,000 for individuals and $4,000 for families in 2014--also indexed to average premium growth in future years.

What should I do if my insurance company rescinds my coverage?

Your insurance company may only “rescind" your health insurance coverage if you committed fraud or made an intentional misrepresentation of an important fact. (This is not to be confused with the cancellation notices that were sent out this fall to people with policies that didn't meet the ACA's requirements.) You should contact your state Department of Insurance to file a complaint.