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Key consumer questions about the health reforms

Thursday - 9/12/2013, 1:40am  ET

The Associated Press

How do I know whether "Obamacare" applies to me?

Polls show many Americans remain mystified by the Patient Protection and Affordable Care Act, or "Obamacare" as it is commonly known. But there's an obvious starting point: Do you have health care coverage?

If your employer provides health insurance for you, it's likely you don't have to do anything on Oct. 1, when enrollment begins. The president has said you will be able to keep your doctor and your plan.

For others -- those without insurance -- it's more complicated. The law requires virtually all U.S. citizens and legal residents to have coverage or pay a penalty. That will happen either through an expanded government Medicaid program, which would cover costs for lower-income people, or by requiring people without coverage to buy it. Financial help will be available for those who qualify, based on income.

To enroll through Medicaid, an individual would have to have an income that tops out $15,400, or about $31,000 for a family of four.

There are just a few exceptions to the requirement for coverage, including for prison inmates, people who entered the country illegally, those facing financial hardship and religious objectors.

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When do I have to decide whether to buy health insurance and what happens if I don't?

Beginning in 2014, virtually all Americans will be required to have health insurance or pay an annual penalty to the government. For an individual, the fine begins at a minimum of $95 in 2014, stepping up annually to a minimum of $695 by 2016. The fine for uninsured children in 2014 is $47.50 for each child, although the maximum a family would have to pay in penalties next year is $285. Those fees climb each year.

Federal researchers predict that about 6 million people could be hit with fines by 2016.

Those who owe penalties would see their tax refunds docked. Not everyone who fails to buy insurance will be forced to pay up -- those exempted from the requirement to have insurance, such as prison inmates, would not be penalized, for example. That also would be the case with people who earn so little that they are not required to file a tax return.

People owing the government a fine under the law could try to massage their tax returns to avoid receiving a refund, and thus the government would have nothing to claim. It's also possible people could try to exploit the religious exemption, for example, to avoid buying insurance and getting hit with a penalty.

According to the government, the IRS plans to hold back the amount of the penalty fee from future tax refunds, but there are no liens or criminal penalties for failing to pay.

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What are health insurance exchanges and how do they work?

Exchanges are the online markets on which individuals and small businesses will buy private health insurance. Think of them as one-stop-shopping destinations similar to Amazon.com that are supposed to give consumers a quick way to compare insurance policies. But they might not be available to some consumers until later. That could leave many who lack job-based coverage to enroll by mail or through call centers. Still, consumers are expected to be able to see all their options in the exchanges and choose their health plans based on price, benefits and other features. Many participants will qualify for federal subsidies in the form of tax credits to help ease the cost. The amount is based on income and is available to individuals making up to $45,960, or $94,200 for a family of four. Shoppers will have different buying experiences depending on who is running their exchanges -- the state, federal government or a combination of the two. Enrollment begins Oct. 1, with health care coverage starting Jan. 1.

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How will actual health care coverage and services be different under Obamacare?

Coverage in the exchanges will be more comprehensive than what is typically available to individuals in the current health insurance market, which is dominated by bare-bones plans. It will resemble what a successful small business offers its employees. All plans in the exchange, and most outside it, will have to cover a standard set of benefits, including hospitalization, doctor visits, prescriptions, emergency room treatment, and maternal and newborn care. Under the law, insurers can't turn away people or charge them more because of health problems or chronic illnesses. Insurers also are banned from setting different rates based on gender. Middle-aged and older adults can't be charged more than three times what young people pay, but insurers can impose penalties on smokers. Most health insurance plans have to cover certain preventive services. Those include routine vaccinations, vision and hearing tests for children, and screenings for diabetes, high cholesterol, colon cancer and high blood pressure.

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