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The new health insurance marketplace

Each October 1, when the federal fiscal year begins, new laws and regulations take effect. This year, the individual mandate of the Affordable Care Act (ACA, sometimes called Obamacare) comes into force. It requires most Americans to have health insurance coverage. As nurses, we need to understand the implications of this law, not just for ourselves but to help our patients. A recent health tracking poll by the Kaiser Family Foundation found people turn first to physicians and nurses as their most trusted sources of information; they also rely on federal and state agencies and pharmacists (http://kff.org/health-reform/poll-finding/kaiser-health-tracking-poll-august-2013/.) Yet they say the news media, family, and friends are the most common places where they’ve actually heard about the law. Unfortunately, those sources might be misinformed about Obamacare.

Under the ACA, insurance coverage can be self-purchased, provided by employers, or provided by the government through Medicare, Medicaid, or CHIP (Children’s Health Insurance Plan). Those who don’t comply with the individual mandate will be subject to tax penalties. However, the following exceptions to tax penalties apply:

  • when the cost of insurance exceeds 8% of adjusted household income
  • when household income is less than the amount required to pay taxes ($9,750 for a single person or $26,000 for a family of four)
  • persons who live in states that have opted out of the Medicaid expansion (described later in this article).

Also, personal exemptions to tax penalties apply to certain religious groups, Indian tribal members, undocumented immigrants, and incarcerated persons.

Eligible U.S. citizens and legal immigrants can get help to defray the cost of insurance, in the form of premium tax credits and cost-sharing subsidies. Eligibility will be determined by household income. The Kaiser Family Foundation offers a calculator to help people determine if they qualify for assistance (http://kff.org/interactive/subsidy-calculator/).

In 2014, those who can afford to buy healthcare insurance but don’t will start paying a penalty of $95 per adult and $47.50 per child, or 1% of family income (whichever is higher). In 2015, the penalty increases to $325 per adult and $162.50 per child, or 2% of family income. In 2016 and beyond, the penalty rises to $695 per adult and $347.50 per child, or 2.5% of family income.

Health insurance marketplaces

Health insurance marketplaces, formerly called exchanges, will offer competitive, affordable private health insurance options in the 50 states and the District of Columbia. Those who already have insurance can use the marketplaces to compare plans and rates for premiums and out-of-pocket costs. Open enrollment began October 1, 2013 and runs to March 31, 2014, with plans taking effect January 1, 2014. As of early September, 17 states indicated they would establish their own marketplace; seven states will do so in partnership with the federal government. In 27 states, the federal government will facilitate the marketplace.

In conjunction with coverage changes, states were given the option to expand their Medicaid programs, with the federal government paying 100% of the costs for the first 3 years and gradually reducing the amount to 90% by 2020. So far, 25 states have expanded Medicaid, 22 states have said they won’t move forward with expansion, and four others are still deliberating.

Certified health plans

For healthcare plans to be certified for the federal health insurance marketplace, they must offer essential health benefits as defined by the government in 10 areas:

  • ambulatory patient services
  • emergency services
  • hospitalization
  • maternity and newborn care
  • mental health and substance use disorder services, including behavioral health treatment
  • prescription drugs
  • rehabilitative and habilitative services and devices
  • laboratory services
  • preventive and wellness services and chronic disease management
  • pediatric services, including oral and vision care. (See https://www.healthcare.gov/glossary/essential-health-benefits/.)

Although ACA describes these areas, it doesn’t describe the specific covered services. That has left loopholes that don’t prohibit large employers from shaving down their plans to eliminate coverage for costly services, such as hospitalization. In the coming years, limited-benefit plans will be scrutinized and may see additional regulations.

Certified health plans are assigned to categories of bronze, silver, gold, and platinum, based on premium price and out-of-pocket payments; they’re not ranked by quality. A typical platinum plan has a high premium cost and lower out-of-pocket costs. In descending order, gold, silver, and bronze plans have lower premiums but higher out-of-pocket requirements, reaching what is known as a high-deductible plan.

To decide which plan is best, individuals and families must consider the likelihood that they’ll need healthcare services and medications, as well as affordability of the premiums. In 2014, the law eliminates restrictions on preexisting conditions and on caps for annual and lifetime benefits; it also limits employers’ eligibility waiting periods to 90 days.

How healthcare providers and organizations will benefit from ACA

While some individuals and employers may feel a new tax pinch from certain ACA provisions, healthcare providers and organizations ultimately will benefit by receiving insurance payments from persons previously not covered who otherwise wouldn’t be able to pay their bills. While far from perfect, this change is a step intended to instill personal responsibility for ensuring payment for healthcare services. It also broadens health-insurance risk pools. In 2015, employers with 50 or more employees will be required to offer insurance.

We can help our friends, family, and patients navigate the health insurance marketplace. They trust us to have good information. To make sure you provide accurate information, take advantage of government sites, such as www.healthcare.gov, as well as state marketplaces and other reliable sources, such as the Kaiser Family Foundation and the American Association of Retired Persons. There’s a lot to learn.

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