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More posts by Trevor Bowers, RHU, REBC
The Supreme Court’s decision to uphold all but one provision in the Affordable Care Act means that for now, at least, one of the most far-reaching overhauls of the nation’s health-care system will be the law of the land. New rules for insurers that have taken effect will remain in place, while new opportunities to gain health-care coverage will begin in 2014. So what does that mean to you and your clients?
Beginning in 2014, virtually all Americans will have to obtain coverage or pay a tax penalty. For a single person the penalty will start at $95 per year or up to 1 percent of income, whichever is greater. The penalty becomes progressively larger from 2014 through 2016, when it will reach full strength. You are exempt from the penalty for certain reasons of financial hardship, such as if the least-expensive plan option in your area exceeds 8 percent of your income. You will be able to buy private plans through statebased marketplaces known as exchanges. The exchanges are a way for individuals to comparison shop and buy private plans that meet benchmarks for quality. Insurers will no longer be able to deny you coverage or charge you higher rates for having a pre-existing condition.
If your income is low enough, you could qualify for federal subsidies to offset the cost of such a plan. You also may qualify for Medicaid, because the law will expand the program to cover all individuals and families with incomes at or below 133 percent of the federal poverty level. However, the court said the federal government cannot force states to comply with the more generous eligibility rules by threatening to take away the federal money they receive for existing Medicaid programs. So it is unclear whether all states will choose to go along with the Medicaid expansion.
As for COBRA, the exchanges will effectively replace the Consolidated Omnibus Budget Reconciliation Act. So if you leave or lose your job in 2014 or later, you will no longer have the option of staying on your former employer’s plan for up to 18 months. Instead, you will be able to buy coverage through your state’s exchange, possibly with federal aid.
The new Medicare benefits under the law remain in effect, including coverage of preventive care without co-pays or other out- of-pocket charges. The Medicare prescription-drug coverage gap, known as the “doughnut hole,” will continue to be gradually narrowed each year until it is eliminated by 2020. This year, if your drug expenses put you in that gap, drug makers must give you a 50 percent discount on all
brand-name drugs. The government also has begun to provide some relief on generics, covering 14 percent of their cost for those in gap.
If you have questions about the new legislation, please give your Cason Group Sales Rep a call at (800) 951-3033.
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