Affordable Care Act: The who, how and what of upcoming health care law

Danielle Lewis, a communications consultant in the District, plans to shop around for health care coverage options. (WTOP/Paula Wolfson)

WASHINGTON – When Jenna Huntsberger gave up an office job to pursue her love of baking, she also gave up health insurance.

“I have been uninsured for three-and-a-half years,” she says during a break from the workspace at D.C.’s Union Kitchen that serves as the headquarters for her small bakery, Whisked.

She says going without insurance can be scary, but adds with a sigh, “you kind of get used to living with the uncertainty.”

Huntsberger is exactly the kind of person supporters of the new health insurance marketplace are looking for: young, healthy, self-employed and uninsured.

“This is a key demographic that the administration is going after to get enrolled in the Affordable Care Act,” says Mary Agnes Carey, senior correspondent with Kaiser Health News.

The goal is to enroll as many people in their late 20s and 30s as possible to lower the overall risk for the insurance pool to guarantee the Affordable Coverage Act is indeed affordable.

While anyone can check out the offerings on the exchanges, the real focus is on both the uninsured and the 12 to 13 million Americans who are buying coverage on their own — people like Danielle Lewis, a communications consultant in the District.

“What the exchanges offer me is a chance to see if there is anything better out there,” she says, adding that there is definitely an interest among the freelancers in the region who she has been in contact with.

Lewis, who is in her early 30s, says folks in her age group realize that health care is very important. As for those who might skip getting insurance and pay a fine, she warns, “all it takes is one accident and suddenly your lack of health insurance isn’t a penalty, it is a catastrophe.”

She plans to be among the first to check out the exchanges. And there are plenty of things to think about for any consumer before logging onto the official website healthcare.gov.

Who’s eligible?

Health insurance has long been a job “perk” for many. Those in a group policy through their employer don’t have to do anything to keep their coverage on track.

Medicare is not part of the health care exchanges. Federal workers will continue to get their coverage from the Federal Employees Health Benefits Program. Members of Congress and their staffs, however, are required to use the exchanges in the states where they live.

The bulk of the people expected to enroll are individuals who must buy insurance in the open market.

Many states and the federally-run insurance exchanges will also offer small businesses with fewer than 50 employees access to buy policies for their workers.

How does it work?

Each state was given the option of setting up its own health insurance marketplace.

Maryland and the District are among the jurisdictions that took up the challenge. Virginia was among those that did not, and exchanges in those states are being run by the federal government.

For anyone who has ever navigated the menu of federal employee health plans, the offerings will look somewhat familiar.

Instead of standard and high options, there are four categories of coverage offered by each insurer in the exchange: bronze, silver, gold and platinum.

All the options can be accessed by going on healthcare.gov, and then clicking on the appropriate state.

The one big difference between the federal employees’ health insurance program and the new insurance marketplaces is the exchanges will offer subsidies on their enrollment site — based on income — to be used to help purchase coverage.

Who can get a subsidy?

Anyone is eligible whose income is less than 400 percent of the federal poverty level. That would be up to $45,960 for individuals and up to $94,200 for a family of four.

There are calculators on the enrollment website that can figure out who is eligible for a subsidy and for how much. The calculator for D.C. residents won’t be ready for the site launch, but is expected to be up and running in a few weeks. In the meantime, the Kaiser Family Foundation has a subsidy calculator at KFF.org that can provide an estimate of premium costs after subsidies are applied.

Subsidies are also available for individuals who have insurance coverage from their employer that costs more than 9.5 percent of their income, or pays for less than 60 percent of covered medical expenses.

How do I choose?

Ultimately, the health care decisions are personal ones.

“You really need to think about what’s your income, what can you afford in health insurance, what are you looking for?” Mary Agnes Carey with Kaiser Health News says.

She says individuals should take into account not only what they are willing to pay for premiums, but also how much they can afford to shell out for co-pays and deductibles.

Also, Carey offers the reminder that not all doctors and hospitals accept all types of insurance. Anyone who wants to stay the course with their health care providers should check with them before selecting a policy.

What about penalties?

Starting in 2014, an individual who is uninsured will face a fine of $95 or 1 percent of his or her income, whichever is greater.

That is going to increase in 2016. The penalty will become $695 for an individual or 2.5 percent of income.

Critics of the exchanges say the initial penalties are too low, and many candidates for coverage may choose to pay the fine because it is cheaper than the cost of coverage.

What else is changing?

Insurers on the exchanges can take into account the age of the applicant. Older enrollees who are likely to have more health concerns will pay a bit more.

But insurers can’t ask about pre-existing conditions and will no longer be able to use an individual’s medical history to deny or increase the cost of coverage.

There will be a greater emphasis in these policies on preventative care and annual out-of-pocket costs for medical services and medications are capped.

People who aren’t in the country legally aren’t eligible for coverage, but their American-born children can get a “child-only” policy.

“Child-only” coverage will also be an option for parents who get self-only coverage at work, and seniors on medicare who are raising their grandchildren.

Do I have to decide now?

No. The open season runs from Oct. 1, 2013, to March 31, 2014. In subsequent years the enrollment period will only be three months.

Dec. 15 is the deadline for anyone who wants to be enrolled when coverage officially begins on Jan. 1.

Experts suggest collecting information and then waiting a bit for all the glitches that might be expected to accompany the launch of such a huge, computer-driven undertaking.

Carey says to remember the last big health care initiative — the launch of the medicare prescription drug benefit 10 years ago.

She notes there were all kinds of problems in the the beginning, but in time everything settled down. She expects some technical problems with the roll-out of the exchanges but adds, “the government usually knows to fix these things.”

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