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Healthcare Reform Basics and How They Affect You

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Healthcare Reform Basics and How They Affect You
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Updated: 03/05/2012

Healthcare Reform Basics and How They Affect You   Print News          Healthcare Reform Basics and How They Affect You   Email News

The health care reform bill is easily going to be one of the biggest talking points of the upcoming election season, but if you haven’t followed this one very closely, you may be a bit confused about whether it will even have any impact on your life. It may help if you understand the major provisions of the bill first:

  • Insurance companies will be under heavier regulation. The government will tell them what they have to cover, and they will have to pay out a percentage of the amount they receive in premiums. Eventually, they will be unable to deny people based on pre-existing conditions.
  • Everyone will be required to have health insurance, but there will be a cap on premiums based on what people make. The lower the total family income, the lower the cap.
  • Employers don’t have to buy insurance, but they will be encouraged to do so.
  • Medicare will begin to have internal cost controls placed on health care providers.
  • Medicaid will pay for a larger pool of people.

Naturally, there are other provisions to the bill, but these cover the main portion. Wondering how they really affect you? Here’s a quick rundown.

  • If you have kids under the age of 26, the provisions have already started to affect you. Up until that age, kids can be covered under your plan. What’s more, though, is that those with pre-existing medical conditions can already begin to participate in a federally funded high-risk program. Health insurance companies can’t drop you now if you become sick, and health plans can’t exclude a child if they have a pre-existing condition.
  • In 2014, the bigger part of the provisions kick in. Health insurance marketplaces will be set up in every state, and they’ll offer better prices on insurance for individuals and small businesses that don’t currently have coverage. If you have a pre-existing condition, you can’t be denied coverage after that point, and there won’t be any lifetime or annual limits on your coverage either. The Medicaid expansion will kick in at that point too, but so will the requirement to buy health insurance. If you don’t have coverage by then, you’ll pay a penalty of up to 1% of your income. That increases to 2.5% of your income by 2016. If, however, you’re among the lowest income bracket, you’ll be exempt. Premium subsidies will be available for those with incomes of more than 133% but less than 400% of the Federal poverty level.
  • If you have a plan through a large employer, the chances are good that you won’t see any changes at all. Additionally, you probably won’t even see a significant decline in your premium. The savings will probably be as little as 3% if you fall into that category. If you buy your own insurance, but you don’t qualify for subsidies, the chances are good that your health insurance costs may even increase because you’ll be required to have a larger policy. Those with lower incomes are going to see the biggest benefits.

Because most of the provisions of the law don’t kick in for a few years, it’s possible they may not happen at all. The health care reform act is under litigation from all sides, and a court decision against the plan could certainly delay the enactment of any or all provisions.