Understanding the terminology and concepts of the Affordable Care Act can be difficult. Here are some basic definitions to help you decode the world of healthcare reform:
• Individual mandate: U.S. citizens and legal residents will be required to purchase qualifying health insurance plans, or face a penalty. Some people will be exempt, including members of a recognized Indian tribe; undocumented immigrants; persons whose annual income is below the threshold for filing a tax return ($10,000 for an individual, and $20,000 for a family in 2013); and those who pay more than 8 percent of their income for health insurance, after accounting for employer contributions and tax credits.
Also exempt from the individual mandate are people who are insured for the whole year through a combination of any of the following sources: Medicare, Medicaid or CHIP (Children’s Health Insurance Program); TRICARE (for service members, and their families); the veteran’s health program; a plan offered by an employer; any insurance plan that meets at least the bronze level of coverage; a grandfathered health plan in existence before March 2010.
Enrollment on the healthcare.gov website began Oct. 1 and runs through March 31.
• Health insurance exchanges: The health law creates online American Health Benefit exchanges for individuals and Small Business Health Options Program exchanges for businesses with 50 or fewer full-time employees. The small business exchange has been delayed until Nov. 1. Florida’s exchange is a federally facilitated exchange, which means it is run by the federal government. The federal exchanges were set up by the U.S. Department of Health and Human Services in states that chose not to run their own programs.
The Affordable Care Act requires every exchange to operate a “navigator” program, with organizations trained to help consumers enroll for health insurance. For a list of local resources for help, call 800-318-2596, or go to: https://localhelp.healthcare.gov/.
• Health insurance premium tax credits and cost-sharing subsidies: The health law provides for tax credits and cost-sharing subsidies for those who meet income eligibility standards.
Tax credits to reduce the cost of insurance bought through the exchanges are available to individuals and families with incomes between 100 and 400 percent of the federal poverty level in states that did not expand Medicaid, including Florida.
Subsidies for cost-sharing also are available to individuals and families with incomes up to 250 percent of the poverty level.
The federal poverty level for 2013 is $11,490 for an individual and $23,550 for a family of four (for each additional person, add $4,020).
• Guaranteed availability of insurance: Health plans can no longer exclude coverage based on preexisting conditions and can’t charge higher rates due to health status or gender. Premiums can vary based on age, geography, family size and tobacco use.
• Essential health benefits: The law creates a package of 10 benefits that must be offered in the individual and small group markets, both inside and outside the exchanges, including ambulatory patient services; emergency services; hospitalization; maternity and newborn care; mental health and substance abuse disorder services, including behavioral health treatment; prescription drugs; rehabilitative and habilitative services and devices; laboratory services; preventive and wellness services and chronic disease management; and pediatric services, including dental and vision care.
• Medical Loss Ratio: Also known as the 80/20 rule, the ratio requires insurance companies to spend at least 80 percent of premiums on healthcare and quality improvement activities — or issue a rebate to customers.
• Grandfathered plans: Plans that were in existence on March 23, 2010, and have stayed basically the same may be exempted from many changes required under the health law.
Sources: Kaiser Family Foundation; U.S. House committees on Ways and Means, Energy and Commerce, Education and the Workforce; Healthcare.gov.