As promised in my last posting I would begin to dig deeper into the website and programs surrounding the now "part of our lives" Patient Protection and Affordable Care Act (PPACA) or as many lovingly call it "OBAMACARE".
This program/legislation took it's biggest step so far since it's initiation in 2010 when the "Health Care Exchanges" opened for business on October 1.
Do you know what that means to you? If not, you're not alone.
A poll from the Kaiser Family Foundation (The Henry J. Kaiser Family Foundation (KFF) is a U.S.-based non-profit, non-partisan, private operating foundation that focuses on major health care issues facing the nation, as well as the U.S. role in global health policy) found 42 percent of Americans thought the act had been repealed by Congress or struck down by the U.S. Supreme Court even though it's the law of the land.
Hey, this proves that I am ahead of the game............sometimes !!!
I at least knew that the legislation was alive and kicking and is basically still being force-fed to the general public like a not too tasty "Sheriff Joe Arpaio green bologna sandwich".
I guess the issue was that I just didn't care....until now.
As your "commander-in-chief" of the 55+ year old army I promised to help you decipher what this healthcare mess is all about and maybe make some informed decisions on how to move forward.
And "by golly god dammit" that is exactly what I am aiming to do.
At the very least I will try to be useful in helping you by eliminating some of the confusion around health care programs by explaining some of the basics.
Let's start at the start.
First, it's helpful to step back a bit and explain why you need health insurance. Simple enough, Thanks to the PPACA, starting January 1, 2014 it's required by law, or you'll face a penalty.
But there's also a more personal financial side of things. If you fall ill unexpectedly, or develop a condition that requires frequent treatment or prescription drugs, these circumstances will be extremely expensive for the average person.
Everyone knows someone who has or has had health issues requiring extended medication, treatment or hospital stays. The costs involved with these health issues can reach tens of thousands of dollars and at times hundreds of thousands of dollars.
A dear friend of mine fought cancer for several years and unfortunately lost. An estimate of the total costs of care ran over $1 million dollars.
Who can afford to cover all of those costs as a middle class baby boomer?
We need health insurance. Do you agree?
It's also important to understand what health insurance does and does not cover. This will vary, sometimes greatly, from one insurance plan to the next.
Generally, you can expect an individual or family plan to cover basic preventive care and an annual doctor visit for each member of your family (all are included as a requirement of the new law).
After you've met your deductible (which most plans require and many times they are very high possibly $5000 to $10,000 ) quality plans often include hospitalization in the event of an emergency, x-rays and laboratory tests, most immunizations, emergency room services, ambulance services, outpatient surgery, inpatient hospital stays and pregnancy in most states (as long as you become pregnant after policy's effective date).
Once PPACA goes into full effect in January 2014, you can expect your health insurance to cover prescription drugs, hospitalization, pregnancy, newborn care and rehabilitation and mental health services.
Currently, any new health plan cannot deny coverage of preexisting conditions or disabilities in children under age 19.
Starting in 2014, all plans will have to cover those conditions for a person of any age.
PPACA, commonly referred to as the Affordable Care Act, will go into effect officially on January 1, 2014. Here's an overview of what the bill requires:
- Almost all Americans must be insured in some form. Each person who is required to but doesn't purchase coverage will face a penalty, which is either 1 percent of your annual income, or $95 -- whichever amount is greater. (If you're not sure if you're required to purchase coverage, see the details of the exemptions.)
- Americans with an income of up to 400 percent of the poverty level who don't receive health benefits through their place of employment (or through Medicare, Medicaid, CHIP or military coverage) will qualify for government subsidie -- a break on premiums in the form of tax credits available.
- People with a household income below 138 percent of the poverty level (which is $23,550 for a family of four in 2013), will qualify for Medicaid.
- If you want to see how the ACA will affect you and your family's premiums in 2014, use this subsidy calculator from the Kaiser Family Foundation.
- THIS IS IMPORTANT ........Insurance companies will be required to cover all applicants and offer the same rates regardless of pre-existing conditions, age or gender.
Insurance premium rates are set by the government, and if you're buying individual health insurance (not through an employer) your specific rate will be based on your age and zip code.
Individual premium rates are determined by a process called underwriting, during which an underwriter will use information about the applicant, such as their medical history, age, weight, and several other factors, to determine whether that person is an insurable risk or not.
This process is based on probabilities and the law of large numbers.
Insurance premiums for groups (insurance you get through your employer or an association of similar individuals) are determined through underwriting as well, but larger groups are able to get lower rates.
Like I talked about in my last blog, "private health insurance exchanges" are the new marketplaces (Some are federally run and others by your individual states. There is a battle raging behind the scenes on who is running them and I'll talk about that later in the week.) put in place as a requirement of the Affordable Care Act that was signed into law back in March of 2010.
They will allow individuals without employer-sponsored insurance to purchase individual insurance in a shopping-like experience.
This new web site(s) was designed to to provide comprehensive, easy-to-understand information on health insurance options and offer some sort of information and transparency about the health insurance market so that consumers can be sure they're getting the best value.
HealthCare.gov, the new "master website", presents extensive information on how the new health care reform legislation affects consumers, but it's served up in a very “personalized” way.
Licensed individuals called "navigators" will be available to assist individuals using the marketplaces.
Another commonly misunderstood concept is how deductibles will work.
More and more employers are opting to enroll employees in IRS-qualified High-Deductible Health Plans, up to 1 in 3 from only 12 percent in 2007.
A High-Deductible Health Plan is a relatively new type of health plan, with lower premiums and higher deductibles.
In order to be called this, a HDHP must be qualified by the IRS, which can happen if the plan has a minimum annual family deductible of $2,500 or $1,250 for an individual.
There are also restrictions on the maximum out-of-pocket, at $12,500 for a family and $6,250 for an individual.
These plans are compatible with Health Savings Accounts (HSA's) and in fact, are requirements for participation in an HSA.
An HDHP might be for you or your family if you're generally healthy and are usually able to anticipate the amount you spend on health care, outside of your premium payment, per month.
The low premium allows you to make room in your budget to be able to put aside money in your HSA, which you can then spend on things like doctor's visits, prescriptions, and any tests or procedures you have to get done.
You won't be paying co-pays, if that's something you're used to, but instead will pay the negotiated rate for your doctor or hospital bills, which you can do with the pre-tax/tax-deductible HSA funds.
If you have a coinsurance amount on your policy, it will be in the form of a percentage -- the amount of a medical bill you have to pay after you've met your deductible.
For instance, let's say you have a $5,000 deductible, with a $10,000 out-of-pocket maximum and 20 percent coinsurance.
You meet your deductible in October, but in November, you get sick and have to visit your doctor and have a few tests done.
The bill for that comes to $1,000, but the negotiated rate is $300.
Since you've already met your deductible and are now in "coinsurance" mode, but haven't yet met that out-of-pocket maximum, you'll be paying 20 percent of that $300 amount (which would be $60).
You'll continue to pay 20 percent of any bills you get for accepted claims, until you've spent the rest of that remaining $5,000 of your out-of-pocket maximum.
The way you go about getting health care may change depending on the type of network your insurance plan is covered under.
Two major types are HMOs and PPOs.
A Health Maintenance Organization (HMO) is an organization that coordinates care for insured members by contracting network care providers on a prepaid basis.
An HMO requires you to choose a Primary Care Physician (PCP) who coordinates your care by seeing you for preventive care visits and common medical conditions, as well as being responsible for referring you to specialists or for certain procedures outside of the PCP's area of expertise.
A Preferred Provider Organization (PPO) is an organization that selects "preferred" providers, any of whom an insured member can see without referrals or a Primary Care Physician's go-ahead.
When you receive care from one of these preferred providers, you'll often pay a co-pay.
Payment for other services in-network will count toward your deductible, if you have one.
Finally, if you've recently left a job, it's likely you're currently covered under COBRA which stands for the "Consolidated Omnibus Budget Reconciliation Act".
COBRA coverage is more expensive than employer-sponsored insurance because you as the former employee are handling that entire premium amount yourself, instead of the employer contributing to it or paying the entire amount.
It might actually be more cost-effective for you to secure coverage through the public marketplaces, since you may be eligible for tax subsidies that would lower that monthly premium amount.
If you were like me when I was a member of the corporate world, you probably just looked at the health options that your company offered and chose the one that offered the most benefits regardless of your out of pocket costs.
It was one less thing to worry about, right?
Maybe some of you weren't so lucky and had to budget your health care costs closely and chose your plans on higher deductibles and co-payments so your monthly premiums were lower.
Well now you can choose to remain on your company's health insurance plans (even though these plans will change based on how your employers utilize the available programs of the PPACA or tackle the government "private health insurance exchanges (www.healthcare.gov) to see if a better alternative exists.
I for one am a little less jaded in my opinion of the PPACA.
You are probably saying to yourself........WTF Jay, you are softening up?
Before I decided to take a look at the PPACA and began researching it's content I expected a compete boondoggle with huge insurance corporations (go ahead and read into this phrase and replace it with "capitol hill lobbyists" instead) dictating what programs are made available and driving costs even higher than what we were getting independently or through our employers before this legislation was enacted.
So what about the costs?
That's the most important part of the program right?
As an example of what the costing structure might look like, I will tackle the insurance exchanges by using my own personal situation as an example (and possibly a few others) in my next few blogs to see how the costs pan out.
If you don't currently have health insurance through your job or your spouse's job, and you aren't eligible for Medicare or Medicaid, you'll need to enroll in a health plan through a public or private marketplace.
Keep in mind that coverage must begin by January 1, 2014, so it's not absolutely necessary that you start looking October 1, but don't wait too long!
Hopefully by the end of the week I have given you a better idea of what direction to take in deciding what health care coverage to purchase.
Please send me your comments and any questions you might have so far.
This blog is for you and it needs your input.
Thanks for joining me........................................................