Since it was signed into law in March 2010, the Patient Protection And Affordable Care Act, better known under the name of Obamacare, has caused quite a stir in US political circles. Entered into force on 1 January 2014, this health care reform requires all people who pay taxes in the United States to have a health insurance plan meeting specific standards. Today, 12 million people have signed up for private insurance under Obamacare. Here are 10 health care reform questions answered.
1. 2014, all Americans must indeed have health insurance.
Any uninsured citizen or resident may face financial penalties.
2. What is the purpose of this health care reform?
The Obamacare health reform aims to reduce inequality by making access to health care universal. Nearly 50 million Americans who were lacking health coverage are now eligible for health insurance.
3. Who is affected by the Obamacare reform?
Americans or permanent residents whose employer does not provide health insurance or who do not benefit from any US government health insurance plan (Medicaid and Medicare) are the first to be affected by the Obamacare reform. They had until March 31, 2014 to apply for health insurance. People who already had individual health coverage but whose policy did not meet the Obamacare requirements were asked to switch insurers. Low-income Americans could receive financial aid. However, other segments of the American population also are affected by the reform:
- people with low income (income not exceeding 138% of the poverty line) will be eligible for Medicaid if the state they live in has decided to proceed with the extension of the program,
- in 2016, heads of companies employing over 50 employees must provide insurance for their staff.
4. Who qualifies for an Obamacare exemption?
Prisoners, Native Americans, illegal immigrants, members of a recognized religious sect which rejects any form of insurance or members of a health care sharing ministry are not affected by Obamacare. For example, an uninsured member of Medi-Share, of the Samaritan Ministries or of the Amish community will not have to pay a penalty.
5. What penalty must US citizens or residents who have not purchased an ACA-compliant plan face?
Americans or US residents with income that exceeds the tax filing threshold and who have not purchased ACA-compliant health insurance in 2015 will now need to pay a penalty of either USD 325 per adult and USD 162.50 per child, or 2% of yearly income above the tax filing threshold. Uninsured individuals must pay the highest of these two amounts. Do note that the payment amount is always capped at the cost of the national average premium for a Bronze health care plan (minimum benefits), that is, USD 2,570 in 2015. The penalty then increases each year: in 2016, an uninsured adult will pay USD 695 or 2.5% of yearly income. You may get an estimation of your tax penalty here: https://taxpolicycenter.org/taxfacts/acacalculator.cfm.
6. What benefits must be included in Affordable Care Act compliant policies?
All health insurance plans must include 10 essential benefits :
- ambulatory patient services,
- emergency services,
- 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.
No yearly dollar limits on essential health benefits are allowed.
7. What rules must insurers follow?
To meet Obamacare requirements, insurance companies must:
- provide the insured with an understandable overview of his benefits,
- meet the Medical Loss Ratio standards, which means 80% of premium dollars must be used to pay medical claims and improve the quality of care and the remaining 20% should be used to pay marketing and administrative costs.
- provide clients with a rebate if the Medical Loss Ratio standards have not been met,
- justify any rate increase of 10% or more,
- allow the insured to appeal a decision regarding the payment of a claim,
- cover young adults under 26 years old under their parents’ plan,
- cover anyone wishing to apply for a plan, whatever their health condition is and without requesting any additional premium,
- provide free preventive care.
Insurance companies may not:
- cancel a policy because the insured has been using his health insurance too much,
- require a co-pay for out-of-network emergency care,
- set yearly dollar limits or dollar limits on a plan’s 10 essential benefits.
8. What are the different coverage levels?
Each insurance solution offers 4 different levels of coverage: Bronze, Silver, Gold and Platinum. These levels determine, in average, what percentage of health care costs will be paid by the insurance company. Thus, with a Bronze plan, 60% of the insured’s health costs are covered, whereas a Platinum plan will cover 90% of his expenses.
9. How are the insurance premiums calculated?
Premiums vary depending on the level of coverage selected. A Bronze plan will obviously be less expensive than a Platinum solution. Though health plan categories are the same throughout the country, premiums may vary from one state or even one city to another. Other factors, such as age or smoking status can also affect the cost of health insurance.
10. What are the benefits of choosing an APRIL International solution when settling in the US?
Purchasing a plan which is not ACA-compliant when settling in the US is not illegal, but if you are liable for tax in the United States, you will certainly need to pay an additional tax penalty.
By choosing APRIL International, you have access to coverage specially designed to meet your specific needs as an expat. First, you select the benefits you need: medical expenses, repatriation assistance, personal liability, death benefit and income protection. Secondly, you are covered (no deductible) as long as you want in the United States as well as in the rest of the world. Also, you can freely choose your health care professional and care facility. Thanks to our direct payment of hospital fees service, you have nothing to pay if you are admitted to hospital. Likewise, by using our healthcare networks in the United States, no cash advance will be required with 490,000 doctors and in 57,000 pharmacies. Our solutions also cover your optical and dental care, if needed. As for your premiums, they do not vary depending on your personal expenses.
To find out more about the Obamacare healthcare reform:
To get an estimation of your tax penalty, visit taxpolicycenter.org.