Affect on Individuals

Information taken from www.kff.org/healthreform

Individual Mandate

• All Americans will be required to have medical insurance (with some exceptions).
• Those who do not have coverage will be required to pay a yearly financial penalty of the greater of $695 per person (up to a maximum of $2,085 per family), or 2.5% of household income, which will be phased-in from 2014-2016.                    

Expansion of Public Programs

• Medicaid
  • Will be offered to all individuals under age 65 who are within 133% of the FPL.
  • 100% of new Medicaid enrollees for 2014 will be funded through federal dollars.
  • Medicaid reimbursement will be increased to 100% of the Medicare reimbursement rates.
  • Eligibility for Medicaid and the Children’s Health Insurance Program (CHIP) for children will continue at their current eligibility levels until 2019. People with incomes above 133% of the poverty level who do not have access to employer sponsored insurance will obtain coverage through the newly created state health insurance Exchanges.

American Health Benefit Exchanges

• Medical coverage/insurance exchanges will provide marketplaces for individuals, families, and small businesses to purchase health insurance plans. These new marketplaces will provide the consumers with information regarding existing plan coverage and cost. Premium and cost-sharing subsidies will make plans more affordable.

Changes to Private Insurance

• New insurance market regulations will prevent health insurers from denying coverage to people for any reason, including their health status, and from charging people more based on their health status and gender. These new rules will also require that all new health plans provide comprehensive coverage that includes at least a minimum set of services, caps annual out-of-pocket spending, does not impose cost-sharing for preventive services, and does not impose annual or lifetime limits on coverage. 
• Young Adults will be able to remain on parents’ insurance until age 26.
• Health insurers will be prohibited from imposing lifetime limits on coverage and will be prohibited from rescinding coverage, except in cases of fraud.

Employer Requirements

• There is no employer mandate but employers with 50 or more employees will be assessed a fee of $2,000 per full-time employee (in excess of 30 employees) if they do not offer coverage and if they have at least one employee who receives a premium credit through an Exchange. Employers with 50 or more employees that offer coverage but have at least one employee who receives a premium credit through an Exchange are required to pay the lesser of $3,000 for each employee who receives a premium credit or $2,000 for each full-time employee (in excess of 30 employees).
• Large employers that offer coverage will be required to automatically enroll employees into the employer’s lowest cost premium plan if the employee does not sign up for employer coverage or does not opt out of coverage.

Coverage and Cost Estimates

• The Congressional Budget Office (CBO) estimates that the legislation will reduce the number of uninsured by 32 million in 2019 at a net cost of $938 billion over ten years. According to CBO, by 2019, the legislation will result in 24 million people obtaining coverage in the newly created state health insurance Exchanges, including some who previously purchased coverage on their own in the individual market. In addition, 16 million more people would enroll in Medicaid and the Children’s Health Insurance Program. The cost of the legislation will be financed through a combination of savings from Medicaid and Medicare and new taxes and fees, including an excise tax on high-cost insurance. The Congressional Budget Office estimates the health care components of the legislation will reduce the deficit by $124 billion over ten years (the total reduction in the deficit including the health care and education components is estimated to be $143 billion over ten years).