Affordable Care Act FAQS
What are the new online Marketplaces, and who are they designed for?
A: The new Marketplaces are designed for Americans who buy their own coverage or currently have no coverage at all. Here in California, our marketplace is called Covered California. Americans who have coverage through their employer or through such public programs as Medicare will not purchase insurance through Covered California. It is also a one stop shop that can determine MediCal eligibility and enroll eligible applicants into the MediCal system. Some key facts about Covered California:
- It provides individuals and families a choice among numerous private insurance plans or, if found eligible, MediCal.
- Every health insurance plan available in Covered California will offer ten essential benefits; a comprehensive package that ranges from preventive health visits, to medications, to hospitalizations.
- Some people shopping through Covered California will pay the same or less than they do for their coverage right now. Nationally, it is estimated that more than 80 percent of those buying coverage through the new health marketplace will qualify for premium tax credits, which can dramatically reduce what an individual actually pays in premiums. Nationally, the non-partisan Congressional Budget Office projects that the average tax credit will be more than $5,000 a year in 2014, or more than $400 a month.
- Some people, however, may pay more for health care insurance than they previously paid. It is important to note that if the lowest-priced plan in the marketplace is unaffordable (meaning, your annual premium costs are more than 8% of your modified adjusted gross income), you may qualify for a hardship exemption, and will not receive a penalty at the end of the year for not having health insurance. If this is your situation, you may qualify for a catastrophic insurance plan (a low cost insurance plan that only covers emergencies and three doctor visits a year). The process of verifying hardship exemption is still being approved by the Health and Human Services Agency, and should be completed within the month of December 2013. It is recognized that a catastrophic plan is by no means completely adequate health insurance, but if the lowest plans through Covered California are truly unaffordable, this option may be available to you.
I just received a letter that my current, individual health plan is being cancelled. Why is this happening, and what are my options?
A: Your insurance company’s plan is not compliant with the new law. California requires non-compliant health insurance companies to cancel all plans that weren’t “grandfathered,” meaning they did not originate prior to the Spring of 2010 or they have changed since that time.
- Under state law, health insurance plans must meet new standards under the Affordable Care Act.
- These changes include the requirement to cover 10 essential health benefits in all plans, guarantee coverage to anyone even if they have a pre-existing condition, and to limit the practice of charging consumers more because they are sick. “Grandfathered” plans are exempt from these requirements.
- As of December 20th 2013, the Health and Human Services Agency has confirmed that if someone’s plan was cancelled, and they now face difficulties paying for a bronze, silver, or gold plan, they are temporarily eligible to buy a catastrophic plan through a hardship exemption to smooth their transition to coverage through the Marketplace. For the limited number of consumers whose plans have been cancelled, this is one more option as they seek coverage.
If you already have employer-provided coverage or purchase it individually, how does the health care law affect you?
A: If you have employer-provided coverage, you have already received numerous new protections and benefits under the health care law, including:
- Your insurer can no longer impose a lifetime limit on your coverage.
- Your insurer must give you the option of having your young adult children stay on or join your employer-provided plan until they turn 26.
- If you have a child with a pre-existing condition, your insurer cannot discriminate against that child.
- Your insurer must spend at least 80% of your premium on health care – not on profits or overhead. And if they don’t, they have to reimburse you – either with a rebate or with lower premiums.
- Your insurer has to justify publicly any double-digit premium increases they are seeking.
- You have free coverage of at least one preventive service per year, such as mammograms and colonoscopies, for most people in private plans.
In addition to the benefits mentioned above, individuals who are individually insured will, as of January 2014, have additional protections:
- Your insurer cannot discriminate against you by charging you more than a healthy person if you have or develop a pre-existing condition.
- If you are a woman, insurers cannot charge you more than men for the same coverage.
I’m shopping for a new healthcare plan, and it looks like my new premiums are way too high. Why is this?
A: Old plans may have been cheaper in part because they did not meet basic requirements. Another key change is that, starting in 2014, health insurance companies must consider all consumers equally, and will not be allowed to separate out the “healthier” individuals. On the whole, this is an important change to ensure a health care system where we are all in it together, and risk is broadly shared by all. However, consumers who had been in a health insurance plan that was made up of unusually healthy or younger people are likely facing increases as a result of this change.
On the other hand, consumers who were in a health insurance plan made up of consumers who use more services than the average consumer may now be seeing prices lower than they would have seen without this change. Remember also, when weighing the cost of the plan, the “sticker price” of the premium is important, but the out of pocket costs, deductibles, and co-insurance are important too.
- Another reason why coverage may be priced higher through Covered California is that there are benefits received through the insurance that were not available through prior insurance coverage or that were not being paid for or received. For example, (aside from the 10 essential benefits already explained in #3, above) many prior policies reserved the right to refuse renewal of insurance at the end of a year, based upon the health status of the individual. This policy provision was used to eliminate persons with illnesses, resulting in people losing coverage just when they needed it the most.
Now, policies offered through Covered California will be renewed each year, irrespective of the health status of an individual, although an insurer may decide not to renew coverage in a given year to all policyholders in a county.
Generally speaking, this is the way in which Medicare recipients are offered Medicare Advantage plans. Under the existing Medicare system, insurers sometimes withdraw from a county at the end of a year, and sometimes re-enter counties over time. The point is that you will have a legal right to purchase health insurance during your years before Medicare eligibility—a legal right that has never before existed in California. You will not be discriminated against or denied health insurance just because you became ill. Once eligible for Medicare, your legal right to obtain health insurance would be offered through that program.
A few additional reasons prices may be higher:
- Plans can no longer impose life-time benefit caps, a feature of Covered California plans that is important for people who have expensive illnesses such as cancer or chronic heart disease. Plans will charge premiums based on age and region, not how sick you are.
- Prices may be higher because your prior plan had priced policies very high for those with illness, and therefore created an insurance pool of unusually healthy people. From the perspective of a consumer, this “works” until the time when illness, age, or disease happens. Then, under the old system, health insurance became unaffordable or more often unavailable. Under the new law, insurance is always available.
- Plans offered until this time sometimes had very high deductibles (i.e. $10,000 per year). Now, plans offered through Covered California have lower deductibles (i.e. $5,000 per year) but higher monthly premiums. This choice of how to design the plans was made to allow people who become ill to make a good choice about seeking medical care, rather than denying themselves important care due to a high deductible.
Is health insurance available without going through Covered California?
Yes. Other insurance companies continue to offer legally-compliant health insurance. These are often companies that have long offered coverage. These companies are not able to offer premium subsidies because they are offering coverage outside of Covered California, but if an individual isn’t eligible for a premium subsidy, then the option of going to another insurer may be the best choice.
A California-licensed health insurance agent or broker can offer advice and enrollment assistance for many of these companies. Companies often accept applications online through their own websites. Although insurance should not cost more when buying it through a licensed agent or broker, the insurance companies offer agents and brokers different commissions. This may affect whether an agent or broker offers many companies or a limited number of companies.
Please carefully review all of the options presented to you, and perhaps consult an agent or broker that represents multiple companies in order to secure health insurance that is the best fit for your needs and your budget. Be sure to check that any website or individual from whom you buy health insurance is licensed in California. Licensing information may be obtained through the California Department of Insurance website.
Never buy any insurance—health, life, auto or homeowners—without confirming that the California Department of Insurance has issued a license. Using an agent or broker not licensed in California may lead to a total loss of any premium that you pay and offer you few remedies to recover your money. Remember, if the price you are going to be charged sounds too good to be true, it may be. If you have any questions about a license and cannot find your answers on the website, you may call the Department of Insurance directly at 1-800-927-HELP.
Am I eligible for premium assistance?
Eligibility for premium assistance depends upon your household income and size. You may use the “Shop and Compare” tool at the Covered California website to get an estimate of assistance that may be available to you: https://www.coveredca.com/shopandcompare. (Note: The website does not work well with Internet Explorer. It is best to use Chrome or Mozilla Firefox to access the Shop and Compare tool) https://www.coveredca.com/shopandcompare/
Important Deadlines to know:
Covered California is extending the deadline to enroll in coverage and to make the first payment for health care coverage for the holidays. The new deadlines for signing up are:
- December 23, 2013: Deadline to enroll in coverage (including selecting a health insurance plan) for your health insurance to take effect on January 1, 2014.
- January 10, 2014: Deadline to make first premium payment for insurance that takes effect on January 1, 2014.
- March 31, 2014: The last day of open enrollment for Covered California in 2014. If you do not enroll by March 31, you will not be able to enroll for the 2014 plan year unless you experience a “qualifying event,” such as a loss of insurance through your job or a life event like the birth of a child. Find out more information about the enrollment process at CoveredCA.com.
For Covered CA assistance:
- You can contact Covered California at 800-300-1506 or at their Options Call Center at 855-857-0445. They operate from Monday-Friday from 8am-8pm, and on Saturdays from 8am-6pm.
- Find out your healthcare options at Covered California’s Shop and Compare tool online at:https://www.coveredca.com/shopandcompare/
- Contact your local Covered California Educators from community-based organizations. A list of certified educators can be found at: https://www.coveredca.com/enrollment-assistance/
- You can also contact a private insurance agent or broker that is licensed by Covered California.