The Affordable Care Act (ACA), also known as Obamacare, will be going into full swing over the course of 2014. While many provisions of the plan have already been put into place, such as the ability for adults up to 25 years old stay on their parents’ plans, key features of the health care law will take effect this year. Expanded access to Medicaid , some consumer protections, and small business tax credits are just part of what has or will be rolling out this year.
Access to Medicaid will be greatly expanded. Under the new provisions of the ACA, Americans between the ages of 19 and 65 living at up to 138 percent of the poverty level will now qualify for Medicaid, previously reserved only for the very poor.
Those eligible under the provision must not be eligible for Medicare, must meet certain citizenship requirements, and not be incarcerated — eligibility must be recertified annually. According to the Washington State Healthcare Authority, this provision of the law should result in about 250,000 more people becoming eligible for Medicaid.
The individual mandate, which requires all U.S. citizens to be covered by a health insurance plan or face a fine goes into effect. Originally set to kick in as of January 1, a grace period has been extended to March 31 for Americans to get coverage. This year, the fine for not having health insurance will be $95 or 1 percent of an individual filer’s income, whichever is higher. The amount is to be levied on 2014 income tax bills. In 2015, the fine is set at $325, but shoots up to $695 in 2016.
Parents who don’t insure their children will be subject to a tax of $47.50 per child in 2014. By 2016, this amount will increase by an additional $300 per child under the ACA laws.
Some finalized consumer protections will go into effect. Those with pre-existing conditions will no longer be able to be barred by insurers, although they may be placed into higher-risk pools with larger premiums. Additionally, limits are being placed on how much more an insurer can charge applicants based on gender, occupation, age, location, use of tobacco and other factors.
If a health care claim is denied by the insurer, under the new provisions, the insurer must provide the claimant with a reason for the denial, as well as information on how to lodge an appeal.
Another consumer protection step going into effect is the requirement that certain essential health benefits be covered by all policies. These benefits include newborn and maternity care, along with preventive and wellness care, substance abuse treatment, and some pediatric services.
The End of Non-Compliant Policies
Part of the uproar surrounding the rollout of Obamacare provisions in 2013 stemmed from a flood of cancellation notices to consumers with policies that were not compliant with the ACA. Many saw this as a broken promise by President Barack Obama, who said while promoting the law, “If you have insurance that you like, then you will be able to keep that insurance.”
In response to the complaints from unhappy consumers and politicians, Obama extended the deadline for non-renewal of non-compliant policies to October 2014.
While some argue that the non-compliant policies don’t provide useful or cost-effective coverage, others were upset that they couldn’t keep the policies they had. This controversy is likely to arise again as the deadline looms near, although by then, many consumers will have found other options.
Small Business Tax Credit
Small businesses which employ 25 employees or less, each of whom earn an average salary of $50,000 a year or less, may be eligible to save 25 percent on their employer-sponsored healthcare costs. The coverage must be obtained through the Small Business Health Options Program (SHOP) and at least half of employee insurance must be paid by the employer.
Tax on Health Insurers
A tax on health insurers kicks in this year, which had only been levied on medical device makers and drug companies under an earlier rollout of the law. The tax is expected to generate about $8 billion annually, and is likely to be passed onto consumers to the tune of about $350 to $400 per year on a policy for a family of four.
What’s not happening in 2014?
The controversial employer mandate has been pushed to start in the beginning of 2015. No doubt that as that time draws closer, criticism and controversy from Congress and business representatives will dominate headlines, just as the troubled rollout of the plan did in 2013.