Summary of the Law
Blue Cross will help guide you through the changes in the healthcare system. Here, you'll get a summary of the major changes to expect. Also, be sure to view our interactive timeline to see when certain provisions will take effect.
Everyone Must Have Health Insurance
By 2014, all citizens will be required to have health coverage or be subject to penalties. There will be exceptions for those who cannot find affordable insurance and certain religious groups.
- By 2014, the new law will require most individuals to obtain acceptable health insurance coverage or pay a penalty, which will be as low as $95 in 2014 and increase each year up to a cap of $695 or 2.5 percent of income.
- Acceptable health coverage can include participation in Medicare/Medicaid or other public plans, for those who are eligible.
- Subsidies will be available through the state health insurance exchanges to ensure individuals and small business can obtain affordable coverage.
Preexisting Conditions Must Be Covered
Over time, the new law will not allow insurance companies to impose preexisting condition exclusions on coverage.
- On January 1, 2014, all pre-existing condition exclusions will be prohibited.
Employers will be encouraged to offer health insurance or be penalized
More employers will be encouraged to offer health insurance to their employees, and some will be penalized if they do not.
- Qualified small group employers and small nonprofit organizations are eligible immediately for tax credits for contributions to purchase health insurance for employees.
- The state insurance exchanges created in 2014 will help small businesses shop for affordable health plans and apply for tax credits.
- In 2014, employers with 50 or more full-time equivalent employees who do not offer coverage to their employees will be required to pay $2,000 annually for each full-time employee over the first 30, as long as at least one of their employees receives a tax credit on the healthcare exchange.
Out-of-pocket Costs for Medicare Part D Enrollees will Decrease
The law will decrease out-of-pocket costs for those enrolled in a Medicare Part D prescription drug coverage plan.
- Additional drug discounts will be phased in through 2020.
- The Medicare share of costs will increase so that the donut hole will be completely closed in 2020.
Everyone Will Be Able to Get Health Insurance
The new law creates immediate options for those who can't get insurance today. In time, many people who have been denied coverage in the past due to medical conditions will be guaranteed coverage.
By 2014, health insurance exchanges in each state will allow individuals and small employers to comparison shop for standardized health packages and apply for tax subsidies to help purchase them.
- Also by 2014, the new law will limit the ability of insurers to charge higher rates due to health status, gender or other factors. Premiums will only vary due to age, geography, family size and tobacco use.
- Also in 2014, plans inside of the exchange will be "guaranteed issue," that is, anyone applying must be given a policy regardless of preexisting conditions.
Healthcare Reform Will Be Funded by Various Program Cuts, Taxes, and Fees
Healthcare reform will be funded in part by cuts in some programs and by taxes and fees on insurance companies, drug manufacturers, individuals, businesses, certain medical devices and equipment, and certain services.
- An annual fee will be charged to the health insurance sector beginning in 2014. That year, the fee will be $8 billion. By 2017 it is expected to be $14.3 billion. The fee will be divided according to market share.
- A 2.3 percent sales tax on the sale of medical devices by a manufacturer or importer will be established in 2013. Device manufacturers will also have to contribute $2 billion annually toward reform. Products exempted from the tax will include eyeglasses, contact lenses, hearing aids and others as determined by the applicable federal agency.
- Beginning in 2013, any single person making over $200,000 per year, and any family with over $250,000 in income will be subject to higher additional individual income taxes will be imposed on some workers.
Health Insurers Can Only Cancel Coverage in Cases of Fraud or Planned Misrepresentation
Within six months, insurers will only be able to cancel coverage once a plan has been issued in cases of fraud or intentional misrepresentation.
Other Issues
The law includes many changes. Below are a few others that may be important to you and your family.
- Health plans must provide first-dollar coverage for preventive services (non grandfathered and new plans). This means that charges for preventive services do not apply to your deductible.
- In most cases, individual and employer plans that provide dependent coverage for children must continue to make that coverage available for dependent children up to age 26.
- The law prohibits most health plans from placing lifetime limits on coverage and prohibits the use of restrictive annual limits in employer plans and individual plans. All annual limits on coverage for essential benefits will be prohibited in employer plans and individual plans by 2014.
- A website must be established allowing people to identify affordable health insurance coverage options in their state.
- The law will limit the deductibility of executive compensation for some officers, directors, and other employees at certain health insurance companies in 2013.
- An excise tax on high-cost employer-provided health plans will become effective in 2018.
This information has been compiled from a variety of sources. Please note that interpretations may vary, and you should consult your attorney and/or tax advisor for more specific information. New and existing state laws may impact many of these provisions as well as future federal and state regulations. Please also note that the new law allows for "grandfathering" of certain health plans, making those plans not necessarily subject to portions of the new law.
