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Untangling Health Care Reform: Part 2
The new Health Insurance Marketplace is open for business. It’s
designed to offer you affordable choices and to allow you to make side-by-side
comparisons of plan costs and benefits. The employer mandate has been delayed,
but the rubber is hitting the road for the individual mandate to buy health
The Affordable Care Act requires insurers to offer
comprehensive health benefits, including doctor visits, preventive care,
hospitalizations, prescriptions, and more. No one can be turned away or charged
more because of an illness, pregnancy, or medical condition.
“People have lots of questions about how this will work,”
says Barb Wollan, Iowa State University Extension and Outreach family finance
specialist. She’s conducted several workshops on making smart insurance
choices. Here are a few questions she’s heard and her answers.
Q. How will tax credits help people with lower incomes?
A. Based on your expected income for 2014, you’ll get an estimate
of the tax credit you’ll be eligible for. You’ll have the option to get the
credit in advance. Example: If your tax credit is expected to be $3,000, then
you can have your health insurance premium reduced by $250 per month. Later,
when you file your 2014 return, your final credit will be calculated and
compared to the credit you received throughout the year via reduced premiums.
If you received too little or too much, it will change your final refund or tax
Q. What if my income changes after I apply for the premium
A. If your expected income for 2014 increases (due to a new
job, marriage, or any other reason), you should go in the Marketplace and
adjust your application. This will prevent you from having to repay any extra
tax credit you received. If your expected income goes down, registering that
change in the Marketplace may increase your tax credit and reduce your monthly
health insurance premiums.
Q. Will I be eligible for lower deductibles and co-pays? How
will it work?
A. If you meet income guidelines (up to $28,725 for
individuals or $48,875 for a family of four) and you buy health insurance
through the Marketplace, you’ll be eligible for a plan with lower out-of-pocket
costs, including lower deductibles and coinsurance. Your insurance card will
provide that information to clinics and medical providers.
Q. What are the options for making sure that my college-age
son or daughter has health insurance?
A. Young adults have more health insurance options than
ever. They may be covered on their own through an employer plan, a Marketplace
plan (where they may be eligible for subsidies), or a public program such as
Medicaid. If they’re 26 years or younger, they also may stay on (or return to)
their parents’ health plan. Most colleges offer health insurance plans that
students can opt to purchase; these plans also may meet your student’s needs.
Q. Does it matter if my state has its own health insurance
Marketplace, if it’s a federal Marketplace, or if it’s a partnership between
A. No. Find out which type of Marketplace serves your state
at healthcare.gov/what-is-the-health-insurance-marketplace/ or call
800/318-2596. The type of Marketplace has no impact on your rights and
responsibilities under the new law.
Q. Can I still buy a catastrophic plan in the Marketplace?
A. Maybe. If you’re under age 30, a catastrophic plan will
meet your insurance requirement. It has lower premiums because it protects you
only from major medical costs. Marketplace policies also are required to cover
three primary care visits per year at no cost and free preventive benefits. You
will not get lower monthly premiums or out-of-pocket costs. When you fill out a
Marketplace application, catastrophic plans will be listed if you qualify.
Q. What if my insurance company doesn’t participate in the
A. You still may purchase insurance elsewhere to meet your
insurance requirement. Premium tax credits and reduced out-of-pocket costs are
only available through Marketplace plans. Each year, insurance companies decide
whether to participate, so you may be able to influence their decisions.