Health Reform - Frequently Asked Questions
I have health insurance and I am happy with my coverage, what's in it for me?
If you have health insurance and you like it, you can stay on the plan you currently have. However, this new law will prevent insurance companies from dropping you if you become sick or get hurt and need to use your insurance. It will eliminate discrimination based on preexisting conditions (children with preexisting conditions will be covered beginning this year, and everyone with a preexisting condition in 2014). Insurance companies will also not be able to charge higher premiums for people because of a previous illness or based on gender, beginning in 2014. Within 6 months, companies will no longer be able to place limits on lifetime benefits and, in 2014, they will no longer be able to place annual limits on benefits.
I am currently uninsured. How will the new law help me afford insurance?
The new law will provide access to affordable health insurance for the 63,217 uninsured Wisconsinites who are unable to get health coverage due to a preexisting condition. This will begin within 90 days July 1, 2010. For more information on how this provision will work, click here. Medicaid will be expanded to 291,769 more Wisconsinites; this includes non-elderly parents, childless adults, children and pregnant women. And 358,000 Wisconsinites will receive tax credits to make insurance more affordable.
How will the health insurance exchanges work and who is eligible?
By 2014 most Americans will be required to have health insurance coverage. These web-based exchanges will facilitate the flow of information and make purchasing a private insurance plan easier. The exchanges will be available to individuals, small businesses and people who do not have insurance through their employer. Insurance companies must meet certain minimum cost and coverage requirements to be able to offer plans through the exchanges. In order to make insurance more affordable, individuals and families with incomes up to 400 percent of the poverty line will be eligible for federal subsidies. For more information on how the Exchanges will work, visit http://www.kff.org/healthreform/7908.cfm.
Premium contributions are limited to the following percentages of income:
Up to 133% of poverty: 2% of income
What will happen if I don't have health insurance by 2014?
Individuals who do not have health insurance, with the exception of those who cannot afford it and choose not to have it due to certain religious beliefs, will face a penalty of the greater of $95 or one percent of income in 2014, $325 or two percent of income in 2015 and $695 or 2.5 percent of income in 2016, up to a cap of the national average bronze plan premium. Families will pay half the amount for children up to a cap of $2,250 for the entire family. After 2016, dollar amounts will increase by the annual cost of living adjustment.
How are members of Congress and their staff affected by the new law?
In 2014, when state-based health insurance exchanges are up and running, members of Congress and their staff will be required to get their health coverage through these exchanges as well.
Is the government going to tell me what health insurance I must have?
No. The new law actually will make private insurance more transparent, accountable, and easier to navigate. There is no government-run health insurance option or, public option, in this new law. State-based exchanges will allow individuals and small groups to choose from an array of private health insurance options, and pick a plan that is right for them and their family. Insurance companies will bid to sell policies in these exchanges, and they will be required to meet certain cost and coverage requirements. These exchanges will be up and running in 2014.
How is this going to be paid for?
There are a number of revenue provisions in the new law. These provisions range from a tax on indoor tanning salons, annual fees on the insurance, pharmaceutical, and medical device industries, and a tax on certain employer-sponsored health plans. Below are revenue provisions in the new law:
A 10 percent tax will be imposed on tanning salons, starting July 1, 2010.
Reduction in overpayments to Medicare Advantage plans.
The insurance, pharmaceutical, and medical device industries will provide annual fees to help fund reform.
Medicare payroll taxes will rise for couples making more than $250k a year and individuals making more than $200k a year.
A tax on employer-sponsored health plans will be imposed on plans worth more than $10,200 for indiviual coverage and $27,500 for family coverage. The tax will be 40 percent of the value of the pla above the thresholds, indexed for inflation.
How is the new law going to bring down the cost of health care?
The new law will save money and begin to reign in health care costs by requiring insurance companies to reduce administrative costs, prohibit them from spending unlimited amounts of premiums on marketing and profits, will require them to spend more of your premium money on medical services and improving the health care delivery system. The state-based insurance exchanges will increase transparency and will be more consumer-friendly. Insurance forms will be standardized and choosing coverage will be easier, because consumers will know what they are getting.
The new health law ensures that insurance companies become more efficient by limiting the amount of premium revenues spent on administrative costs to provide more funding for medical services and innovations.
Insurers will also no longer be able to arbitrarily increase premiums and must publicly disclose any premium increases.
Provisions are also in place that simplify and standardize insurance paperwork, which currently takes physicians 140 hours and $60,000 a year to complete.
Insurers will face an excise tax for high-cost employer-sponsored health care plans in order to stress the importance of moving away from these types of plans.
The Health Insurance Exchange creates health care savings by precluding insurers from denying coverage to those who have been sick in the past, standardizing plan information, using a single enrollment form for every plan, and driving down premiums by introducing competition and choices.
To further improve care and lower costs, health reform creates a Medicare program that encourages value-based purchasing (VBP), meaning a share of hospital payments will be based on performance and quality measures for certain conditions in contrast to the fee-for-service system that often rewards overtreatment and inefficient practices.
The new law will reduce unnecessary hospital readmissions by decreasing payments to hospitals with high rates of preventable readmission for select conditions.
Patient-centered medical homes, which have been shown to improve coordination of care and reduce costs, will receive additional payments.
An Independent Payment Advisory Board will also be established in 2014. It will present Congress with proposals to strengthen the Medicare program.
What are essential benefits? What will be covered in the plans offered through the exchanges?
When the exchanges are up and running in 2014, insurance companies that want to offer coverage in the exchanges will have to offer certain essential benefits. Benefits will include: ambulatory patient services, emergency services, hospitalization, maternity and newborn care, mental health, substance abuse, and behavioral health treatment, prescription drugs, rehabilitative and habilitative services and devices, laboratory services, preventative/wellness services and chronic disease management, pediatric services; including oral and vision.
What is the implementation timeline?
For an updated implementation timeline, click here.