Q&A About Insurance Choices and Mandatory Coverage

Various provisions of the Affordable Care Act (ACA) have been rolling out over the last couple years, but the big one-mandatory health insurance-comes in January. For people who don’t get coverage through their employers, Medicare or Medicaid, each state is establishing health insurances exchanges where people can compare plans and shop for coverage. The exchanges are to be established by October.

Because this provision confuses a lot of people, Kaiser Health News (which is not affiliated with Kaiser Permanente) and NPR have established ongoing series of consumer questions and answers. Following are edited excerpts from their recent stories. You can participate by emailing questions to questions@kaiserhealthnews.org and MORNING EDITION@npr.org.

Q: How do people sign up for this coverage?

A: Last month, the federal government re-launched its website, Healthcare.gov, where you can find information about how to get ready to sign up. Most people will sign up online, but there are also paper applications. The government is training thousands of people to help guide people through the process.

Q: I have insurance through my husband’s job, but it’s very expensive, we pay a very high premium and I am not satisfied with the coverage. Are we able to buy health insurance through the health insurance exchanges?

A: Probably not. As President Obama has been saying, if you like the coverage you have you can keep it. But that was really shorthand for saying this law was intended mostly to maintain the existing system in which most people get their insurance through their job, or through a family member’s job. And to make sure that happened, for the first several years at least, individuals who are offered health insurance through an employer, or a family member’s employer, are not allowed to go to the exchange instead, except in very limited cases. Or they can go to the exchange, but they won’t be eligible for any subsidies.

The limited cases include premiums offered by the employer that cost more than 9.5% of their household income, or if the employer’s plan pays less than 60% of the cost of covered benefits.

Q: Insurance companies will no longer be able to turn down people with pre-existing conditions, but can they ask about them? And if so, will such people have higher premiums than those without them?

A: No. As of January 1, that won’t be allowed. You can’t be turned down, you can’t be charged more. So some healthy people will pay higher premiums to offset the cost of the sicker people paying less. But the whole idea of requiring most people to have coverage is to get more healthy people into the insurance pool to spread the risk more broadly.

Q: I’m currently employed part-time, and I pay for my own health insurance. It’s not through my employer. Am I eligible to participate in the exchanges, or to take advantage of the tax credits?

A: One of the biggest misconceptions about the exchanges is that they’re only for people who don’t have insurance. But the exchanges are open to everyone who buys their own insurance. There are about 14 million people in the individual insurance market now. They include people who work part-time and don’t qualify for benefits, people who are self-employed and or people who may have retired early and don’t qualify for Medicare yet.

It has been difficult to get insurance through the individual market, and it’s expensive. It’s considered the most dysfunctional part of the health insurance system, and a big part of building these exchanges has been an effort to fix that.

Q: How much will coverage under the new law cost?

A: We’re just starting to get premium information from some of the states. We won’t have all of it until the autumn. Cost will depend on a lot of things: where you live, whether you want to pay a higher premium and have a lower deductible, or have a lower premium and a higher deductible, and, of course, whether you’re eligible for subsidies. But from what we’ve seen so far, premiums for the standard, so-called “silver” plan-the mid-level plan-seems to be averaging between about $200 and $400 a month; that’s without subsidies.

Q: In 2012, I earned only $25,000, but I have $300,000 in stocks. I have individual health insurance. Will I be ineligible for a subsidy beginning in January because I am presently insured, or because I have large assets?

A: No. If the only coverage that’s available to you is on the individual market, being covered by an existing individual plan wouldn’t make you ineligible. But subsidies are available only for plans bought through the exchanges, not on the private market.

To be eligible for subsidized coverage-where the federal government covers part of your cost through tax credits-your income must be between 100% and 400% of the federal poverty level, or $11,490 to $45,960 for a single person in 2013.

“Income” means modified adjusted gross income-the total of your adjusted gross income from your tax return and any tax-exempt interest income you have as well as certain foreign income. Stock portfolios aren’t included.

You can estimate your subsidy using the Kaiser Family Foundation’s subsidy calculator

Q: Currently my family and I are covered by health insurance through my employer. Soon I will begin law school, where the university’s insurance plan is affordable for me but expensive for my family. We will have a small income from my wife’s part-time work-maybe $15,000 annually. Does the university plan count as “employer-offered” insurance? Or can we all sign up for a plan on the exchange in October?

A: Under the ACA, student health plans are not considered employer coverage, and if that is the only coverage you’re offered, you could buy a policy on a state exchange and you might qualify for subsidized coverage.

But maybe not. Assuming you have two children, the federal poverty threshold for a family of four is $23,550 in 2013. Your wife’s income of $15,000 would mean your family may make too little to qualify for subsidies on the exchanges. In that case, depending on where you live, some or all of your family members may qualify for Medicaid, the federal-state health insurance program for low-income people.

Q: Will people with coverage through the military or through the Department of Veterans Affairs have to go out and buy private coverage now, as well?

A: No. The law lays out several categories for what it considers minimum coverage that satisfies that requirement to have insurance. It’s basically the coverage that about 80% of the population already has-through an employer, including COBRA and retiree coverage, Medicare, Medicaid, or Children Health Insurance Program, VA or Tricare. If you have any of those kinds of health insurance, you don’t have to do anything and you will have satisfied that requirement to have coverage.