Healthcare Reform School, Lesson 19 - Top 3 Questions About the Law

Welcome back to class.  Finals are right around the corner, because the Healthcare Exchanges open on October 1, less than two weeks from now.  This blog will give some basics about the exchanges.  Many people are wondering how they will work and what the insurance will look like on the exchanges.  I will answer the most common questions I have heard.  If you have any questions please send them to me by responding to this blog or sending them directly to me.

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These are the most common questions with the most succinct answers:

1. So people who don't work get free insurance?
2. How will it affect my small business?
3. How much will the insurance cost?

Following are my answers:

1. So people who don't work get free insurance?  The follow up question for this is "why should I work at all?"  My answer is typically silence...........   The real question seems to be "How much do I have to pay in taxes" to support this law.  The short answer is approximately $67 per year per individual plus a 5.5% to 7.5% tax on our health insurance premiums.  There are six new taxes imposed to help pay for this law. Some of these new fees and taxes will be paid directly by health insurance issuers,while others will be paid directly by the sponsors of self-funded health plans. Some fees and taxes begin in 2013 and 2014,while others are imposed in later years. Some are temporary, and others are permanent. The bottom line is that, in total, these new fees and taxes will impact premiums for all individuals covered under fully insured or self-funded plans and policies.
• Patient-Centered Outcomes Research Institute (Comparative Effectiveness) Fee. 
• Cost is $1 to $2 per year
• This will be phased out after 2019.
• Annual Health Insurance Industry Fee
• 2%-4% tax on insurance plans
• Expected to be between $8 Billion to $14 Billion per year
• Transitional Reinsurance Program Assessment Fee
• $63 per individual
• Paid by health insurers
• Collected for 2 years only, 2015 and 2016
• Risk Adjustment Program and Fee
• Paid by insures in the individual marketplace in each state that have a lower risk pool of clients.
• extimated to be between $1 - $2 per individeaul per year
• Marketplace (i.e., Exchange) User Fees
• A tax of 3.5% of monthly premiums on issuers of plans and others that may profit from the market place
• This will be a permanent tax
• Cadillac Excise Tax (tax for high-cost plans)
• This tax starts in 2018
• It is a 40% tax on the portion of a health insurance premium that exceeds a very high limit....which is $10,750 annual premium for an individual.
2. How will it affect my small business
• It will not affect your business expenses.
• Small businesses are not required to provide health insurance to employees
3. How much will the insurance cost?
• Individual plans will typically be much more expensive.  By factors of 2 or 3 times in many cases.
• Many individuals currently keep their costs down by keeping their deductibles higher and eliminating benefits that they do not want
• These options will not be available next year, so premiums will be much higher.
• Individual insurance will be comparable in cost to group plans that are really rich in benefits.

To learn more about specific topics, review the list of my previous blogs below.

Lesson #1 - Introduction
Lesson #2 - Basic Reason for creating the Patient Protection and Affordable Care Act
Lesson #3 - Public exchanges for Purchasing Insurance
Lesson #4 - Essential Health Benefits that will be added to all Health Insurance policies in 2014
Lesson #5 - Tax Credits to Help Pay for Health Insurance
Lesson #6 - Enforcement and Penalties in the Affordable Care Act
Lesson #7 - Preparing for the Affordable Care Act
Lesson #8 -  Options for Small Businesses
Lesson # 9 - Will my Insurance Premiums change in 2014?
Lesson #10 - What Will Happen to Small Groups in 2014?
Lesson # 11 - Why Should I Buy Insurance Before the Deadline?
Lesson #12 - What does the Delay in the Employer Mandate Really Mean? 
Lesson #13 - Can I keep my Current Health Insurance Plan?
Lesson # 14 - Who is Providing Insurance During Open Enrollment?
Lesson #15 - Out of Pocket Spending Limits - Law Change
Lesson 16 - SHOP - Marketplaces for Small Businesses 

Lesson #17 - Options for Individuals and Small Businesses

Lesson 18 - Advice from an expert