PPACA FAQ from the FMA - Understanding Your Options

The Florida Medical Assocation published an FAQ document about the PPACA, aka Obamacare, which contains very helpful insights. While the information is tailored to Florida residents, specifically physicians caring for those residents, the embedded links are very informative. I have reproduced the majority of the document below for the reader's ease.

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Is it true that starting in 2014, everyone in the U.S. will be required to have health insurance or pay a penalty? Who is exempt?

It is true that most people will be required to have coverage or pay a penalty starting next year. However, there are some noteworthy exceptions to this rule. Those exempt from the mandate to obtain health coverage include: 

• Undocumented immigrants

• Incarcerated Americans

• Indian tribal members 

• Members of certain religious sects

• People who don’t earn enough to be required to file taxes. This amount is subject to change each year, but it is currently around $10,000 for an individual or around $19,000 for a couple.

• People who would have to pay more than 8 percent of their income to obtain qualifying coverage, after taking into account any employer contributions of federal subsidies. 

There is a hardship exemption that will be available on a case-by-case basis. Guidance on the hardship exemption can be found here.

In addition, some individuals may choose to pay the penalty associated with not having health insurance. The CBO predicts that the penalty will impact around six million people, or a little less than 2 percent of U.S. residents.

Click to here to see a see a flowchart that explains how the individual mandate and penalties for not acquiring coverage will work. This document may also come in handy as a quick reference guide for patients who ask questions about the mandate.

How many people will remain uninsured after the mandate goes into effect? 

The Society of Actuaries (SOA) estimates that around 19.6 percent of Floridians (approximately 3.7 million people) are currently uninsured. If Florida lawmakers choose to expand Medicaid eligibility, the SOA estimates that around 8 percent of Floridians (approximately 1.5 million people) will remain uninsured by 2017. If Florida lawmakers do not expand Medicaid eligibility, the SOA estimates that 11.4 percent of Floridians will remain uninsured. There is no deadline for expanding Medicaid eligibility.

Why it’s important: Well over one million Floridians are expected to gain coverage due to the ACA regardless of whether Florida expands Medicaid. Consequently, some physicians may see an influx of new patients. In addition, physicians shouldn’t assume that all patients will have insurance as a result the ACA. Some Floridians will still lack health insurance regardless of whether the Florida Legislature expands Medicaid eligibility.

Will everyone have to go to the exchange to buy insurance?

No. While the exchange will serve an enrollment vehicle for many individuals and families that acquire insurance next year, not everyone will use the exchange to obtain coverage. Instead, most people will continue to gain insurance through their employer, or through programs such as Medicaid or Medicare. 

Will all businesses be required to offer affordable health insurance to their employees or face a penalty next year?

No. The requirement to offer qualifying health insurance to employees who work 30 or more hours per week only applies to companies with 50 or more FTEs. In addition, this requirement has been delayed until 2015. For more information on the employer mandate, click here.

Can people with pre-existing conditions be denied or charged more because of their health status when they purchase insurance on the exchange?

No. 

However, that doesn’t mean that everyone will pay the same amount for their insurance. Since insurers won’t be able to deny coverage to people with pre-existing conditions or charge them more because of their health status, premiums will be based on a modified “community rating.” In practice, this means that the cost of any given insurance plan can only vary from one individual to the next by limited amounts due to age, smoker status, family size and geographical location. To learn more about this subject, click here.

In addition, prices will still vary from one insurance company to the next and from one product offering to the next. PPOs may still cost more than HMOs or plans that include only a narrow network of providers. All plans sold on the exchange will have to cover the same set of essential health benefits, but will differ in terms of cost-sharing requirements. Plans with higher cost sharing requirements will have lower premiums.

In order to make it easier for people to compare their options, plans will be grouped together based on the percentage of health -are expenses that will be paid for by the insurance company. Generally speaking, the lowest level of coverage provided will be “bronze” plans, which will cover 60 percent of health-care expenses for the average enrollee. The remaining 40 percent will be paid for by the enrollee through deductibles, coinsurance and copayments. The highest level of coverage provided will be “platinum” plans that will cover 90 percent of health-care expenses. People under age 30 and certain individuals who are exempt from the mandate can also choose to purchase “catastrophic” plans that will carry very high deductibles. All plans will cap out-of-pocket expenses at a certain limit. To learn more about the different levels of health insurance offered on the exchange, click here.