Affordable Care Act/ Health Insurance
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Affordable Care Act (ACA)
By Young Invincibles And Clasp
Under the Affordable Care Act (ACA) - commonly known as “Obamacare”, individuals will have new insurance options starting January 1, 2014. The law will also make having health coverage a legal requirement. Currently, young adults ages 18 to 34 are twice as likely to be uninsured as older adults. When covered by new no and low-cost health insurance options, students will be less likely to grapple with large, unexpected medical costs, increasing their chances of academic success and college completion. As part of the Benefits Access for College Completion initiative, CLASP and Young Invincibles. Young Invincibles’ Healthy Young America (http://younginvincibles.org/issues/health-care/) and Enroll America’s Get Covered America (http://www.getcoveredamerica.org) websites also have useful information.
Websites with more information:
What resources are available to students whose parents do not have health care insurance?
Even if a student is not able to get coverage as a dependent on her parent’s health plan – because her parents are uninsured or her parent’s plan does not cover dependents – there are other options for coverage that may be available to the student – and her parents, if they are also uninsured.
- Individuals and families that do not have access to employer coverage will be able to buy coverage on the new Health Insurance Marketplace, regardless of age. If a person’s income is less than about $46,000 for individuals or $94,000 for a family of four, he may be eligible for a monthly Premium Tax Credit to lower the cost of insurance purchased through the Marketplace: Saving money on health insurance.
- Individuals and families that have annual incomes below about $15,000 for an individual and $31,000 for a family of four may be able to get coverage through Medicaid, depending on the Medicaid eligibility rules in their state: Medicaid & CHIP coverage.
- Individuals who are either under age 30 or who cannot find “affordable coverage” may be able to buy a catastrophic plan: Catastrophic health plans.
Is the annual salary limit based on net or gross income?
Eligibility for premium tax credits, cost-sharing subsidies, and Medicaid in all states will be based on by Modified Adjusted Gross Income (MAGI). MAGI is Adjusted Gross Income (AGI), plus certain items like tax exempt interest.
What is included in the different types of plans?
Under the Affordable Care Act (ACA), insurers will offer plans on the Marketplace that fit one of four levels of coverage: Bronze, Silver, Gold, and Platinum. Each plan level must cover the same “essential health benefits”: https://www.healthcare.gov/.
- What-does-marketplace-health-insurance-cover. Lower-tier Bronze and Silver plans will have lower monthly premiums, but higher levels of “cost sharing” – the amount one pays out-of-pocket in the form of deductibles, coinsurance and co-payment higher-tier Gold and Platinum plans will have higher monthly premiums, but and co-payment; higher-tier Gold and Platinum plans will have higher monthly premiums, but lower levels of cost sharing: How to pick a health insurance plan.
- The different plan levels are pegged to “actuarial values.” All Bronze plans must have a 60% actuarial value (AV), Silver plans must have a 70% AV, Gold plans must have an 80% AV, and Platinum plans must have a 90% AV. What this means is that Bronze plans cover 60% of all health care costs for an average person, Silver plans would cover 70% of those costs, and so on. This does not mean that a Bronze plan would cover 60% of all costs for any individual consumer, it is only an average.
Where can we find the tax credit availability? Is there a chart to advise people?
Students can use this tool from the Kaiser Family Foundation: Health Insurance Marketplace Calculator. After they input their information, they can find if they may be eligible for Medicaid or a premium tax credit, and the amount of credit they could be eligible for. Starting October 1, 2013, students will be able to fill out an application on www.healthcare.gov and see what plans they’re eligible for.
How does the system expect people to be able to afford these premiums until the tax credits come in a year later?
The premium tax credits that are available are actually a new kind of tax credit that can be applied immediately to lower the cost of your monthly premiums... you don’t have to wait until tax time to get them! Advance payments of the credit can be applied to lower premiums each month, up to a maximum amount.
- For example, say a 28-year-old community college student who works part-time and makes $16,000 a year wants to buy a plan on the new health insurance marketplace. Before tax credits, a mid-level plan might cost her $273 per month. However, based on her income, she could qualify for a premium tax credit of $229 per month. If she takes this tax credit in advance/upfront, she would only have to pay $44 per month for a midlevel plan on the marketplace. Her credit would then then be sent automatically to her insurer and she would only have to pay the reduced rate for her insurance.
- If the amount of advance credit payments you use is less than the total you’re due at the end of the year, you can have the difference refunded on your taxes. If your advance payments at the end of the year are actually more than your credit (perhaps because you underestimated what your income for the year would be), then you would owe money on your taxes.
What will be the monthly cost be for the catastrophic plans?
The monthly cost of catastrophic plans – available to consumers who are either under 30 or who can’t find other affordable coverage – will vary. In general, these plans will have a lower monthly premium than even a Bronze plan. However, the out-of-pocket costs – in the form of deductibles, coinsurance, or co-payments – for these plans will be much higher. Aside from three primary care visits and certain preventive services, the coverage under these plans will not kick in until an individual spends around $6,000 on health care. Thus an individual is only better off purchasing one of these plans if they use very little health care (which is, of course, difficult to determine in advance).
In addition, the new premium tax credits – used to lower a consumer’s monthly premium – cannot be used to buy catastrophic plans. This means that in some cases, it will cost a consumer less each month after tax credits to buy a Bronze or Silver plan on the Marketplace than a catastrophic plan.
How do students join?
There is no cost to apply. The federal government has set up an online portal at http://www.healthcare.gov to provide information to consumers about their new health insurance options. The website has an online chat function, available 24/7: https://www.healthcare.gov/chat. Consumers can find state-specific information through the federal website. In addition, a national 800 number is available for consumers to speak to customer service representatives, also available 24/7: 1-800-318-2596 (TTY: 1-855-889-4325). Assistance in languages other than English and Spanish is available through the call center.
Learn more about Young Invincibles’ Healthy Young America and enroll in Get Covered America.