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Home : Consumers : Health care reform : Consumers
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Consumers
The Insurance Department is analyzing information to provide North Dakota's consumers with unbiased resources concerning the new health reform law. Many details are not yet available, so as the Department learns more, this website section will change.
Please come back to read more about how the new law will affect you. If you have a question that is not answered here, feel free to contact us at 1-800-247-0560 or insurance@nd.gov.
Health insurance
Medicare and Medicaid
Young adults
Cost
Health insurance
I don't have health insurance. Will I have to get it, and what happens if I don't?
U.S. citizens and legal residents are required to have qualifying health coverage beginning in 2014. Those without coverage pay a tax penalty of the greater of $695 per year up to a maximum of three times that amount ($2,085) per family or 2.5% of household income. The penalty will be phased-in according to the following schedule: $95 in 2014, $325 in 2015, and $695 in 2016 for the flat fee or 1.0% of taxable income in 2014, 2.0% of taxable income in 2015, and 2.5% of taxable income in 2016.
Beginning after 2016, the penalty will be increased annually by the cost-of-living adjustment. Exemptions will be granted for financial hardship, religious objections, American Indians, those without coverage for less than three months, undocumented immigrants, incarcerated individuals, those for whom the lowest cost plan option exceeds 8% of an individual's income, and those with incomes below the tax filing threshold (in 2010 the threshold for taxpayers under age 65 was $9,350 for singles and $18,700 for couples).1
I don't have health insurance. Do I need to do anything right now?
No. The mandate requiring individuals to acquire health insurance coverage or pay a penalty does not go into effect until 2014.4
I want health insurance, but I can't afford it. What do I do?
Depending on your income, you might be eligible for Medicaid, the state-federal program for the poor and disabled, which will be expanded beginning in 2014. Low-income adults, including those without children, will be eligible, as long as their incomes didn't exceed 133% of the federal poverty level, or $14,404 for individuals and $29,326 for a family of four, according to current poverty guidelines.1
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Will I be required to give up my current coverage?
No. Health plans in effect as of March 23, 2010, are grandfathered under the law and will be considered "qualified coverage" that meets the mandate to have health insurance that begins January 2014.4
How will the legislation affect the kind of insurance I can buy? Will it make it easier for me to get coverage, even if I have health problems?
If you have a medical condition, the law will make it easier for you to get coverage; insurers will be barred from rejecting applicants based on health status once the exchanges are operating in 2014. In the meantime, the law will create a temporary high-risk insurance pool for people with medical problems who have been rejected by insurers and have been uninsured at least six months. Click here for information about the high-risk pool. And as of Sept. 23, 2010, insurers can no longer exclude coverage for specific medical problems for children with preexisting conditions, nor can they any longer set lifetime coverage limits for adults and kids. In 2014, annual limits on coverage will be banned. New policies sold on the exchanges will be required to cover a range of benefits, including hospitalizations, doctor visits, prescription drugs, maternity care and certain preventive tests.1
Can I still have a Health Savings Account (HSA)?
Yes. Nothing in the legislation would infringe upon the ability of an individual to contribute to a Health Savings Account (HSA), or discourage an individual from doing so. The minimum level of coverage required to meet the individual mandate was specifically designed to allow for the purchase of a qualified high deductible plan that would complement the HSA.4
I am self-employed. Will the new law impact my health insurance choices?
Yes. Beginning Jan. 1, 2014, self-employed individuals and their families must be included in the small group market in all states and will have the option of purchasing coverage through the Exchange. 4
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What is an exchange?
One of the requirements of the new law is a mandate that states create health insurance exchanges by 2014 to help individuals and small businesses purchase coverage. Some have compared exchanges to the website travelocity.com where consumers can access and compare multiple prices and other features of hotels and airline tickets in a centralized location-thereby maximizing their purchasing power.
Federal lawmakers hope the exchanges will modernize individual and small-group health insurance markets by creating competition for consumers while streamlining and simplifying administration and enrollment.
The law mandates that insurers participating in an exchange offer four types of plans meeting certain minimum actuarial standards-platinum, gold, silver and bronze-as well as a catastrophic plan for young adults. The exchange should be designed to help low and middle-income families and individuals access government subsidies. Insurers could also sell outside of exchanges.2
I have been denied coverage because I have a pre-existing condition. What will this law do for me?
As of June 14, 2010, coverage is available to individuals with pre-existing conditions who have been uninsured for at least six months through high risk pool programs in every state. These programs will provide coverage that immediately covers pre-existing conditions at premiums that are capped at the average cost of private coverage in your state's individual market.
In 2014, when the Exchanges open for business, insurers will be prohibited from discriminating against individuals with pre-existing conditions in offering or pricing health insurance policies. In addition, for those with qualifying incomes, subsidies will be available to reduce premiums and cost-sharing for plans purchased through the Exchange.4
I work for a small business. Will they offer health insurance now?
It depends on the size of the firm. Companies with fewer than 50 workers won't face any penalties if they don't offer insurance starting in 2014. Companies can get tax credits to help buy insurance if they have 25 or fewer employees and a workforce with an average wage of up to $50,000. Firms with more than 50 employees that do not offer coverage will have to pay a fee of up to $2,000 per full-time employee if any of their workers get government-subsidized insurance coverage in the exchanges. The first 30 workers will be excluded from the assessment.1
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Medicare and Medicaid
I'm over 65. How will the legislation affect seniors?
The Medicare prescription-drug benefit will be improved. In 2010, seniors who entered the Part D coverage gap, known as the "donut hole," received $250 to help pay for their medications. Beyond that, drug company discounts on brand-name drugs and federal subsidies and discounts for all drugs will gradually reduce the gap, eliminating it by 2020.
That means that seniors, who now pay 100 percent of their drug costs once they hit the doughnut hole, will pay 25 percent. And, as under current law, once seniors spend a certain amount on medications, they will get "catastrophic" coverage and pay only 5 percent of the cost of their medications. Meanwhile, government payments to Medicare Advantage, the private-plan part of Medicare, were frozen as of 2011, and cut in the following years. If you're one of the 10 million enrollees, you could lose extra benefits that many of the plans offer, such as free eyeglasses, hearing aids and gym memberships. Beginning in 2010, the law will make all Medicare preventive services, such as screenings for colon, prostate and breast cancer, free to beneficiaries.1
Do I have to do anything to receive Medicare Part D donut hole savings?
No. Medicare beneficiaries who qualified for donut hole reimbursement in 2010 automatically received a one-time payment of $250. In 2011, if you reached the coverage gap in your Medicare Part D coverage, you automatically received a 50% discount on covered brand-name drugs.
In 2012, you'll pay 50% for brand-name drugs and 86% for generic drugs. See the schedule below for information on what you'll pay for drugs while you are in the coverage gap:
2013: 47.5% for brand-names and 79% for generics
2014: 47.5% for brand-names and 72% for generics
2015: 45% for brand-names and 65% for generics
2016: 45% for brand-names and 58% for generics
2017: 40% for brand-names and 51% for generics
2018: 35% for brand-names and 44% for generics
2019: 30% for brand-names and 37% for generics
2020: 25% for brand-names and 25% for generics6
How does the new law affect Medicaid?
The new health law includes an increase in Medicaid payment rates, bringing them up to the same level as those from Medicare. A large chunk of the increase in insurance coverage under the law comes from expanding Medicaid, the federal-state program for low-income Americans, to cover 16 million more people, including people with incomes up to 133 percent of the federal poverty line, or about $14,404 for an individual and $29,326.50 for a family of four. The expansion will include childless adults, most of whom were not previously eligible.1 For more information, contact the North Dakota Department of Health.
What changes are being made to Medicare enrollment periods?
The Medicare Part D annual enrollment period changed to Oct. 15-Dec. 7 in 2011. During this time, beneficiaries can enroll or switch Medicare Advantage plans; they can also change drug plans.
The Medicare Advantage open enrollment period moved to Jan. 1-Feb. 14. Beneficiaries can disenroll from a Medicare Advantage plan and go back to original Medicare during this time, with the option of adding a prescription drug plan. Beneficiaries cannot buy a Medicare Advantage plan or switch to another Medicare Advantage plan during this time. For those beneficiaries who choose to go back to Original Medicare, the change will take effect the first day of the following month.
The general enrollment period for Medicare Part B is not changing.5
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What if I make too much for Medicaid but still can't afford coverage?
You might be eligible for government subsidies to help you pay for private insurance that would be sold in the new state-based insurance marketplaces, called exchanges, slated to begin operation in 2014. Premium subsidies will be available for individuals and families with incomes between 133 and 400 percent of the poverty level, or $14,404 to $43,320 for individuals and $29,326 to $88,200 for a family of four. The subsidies will be on a sliding scale. For example, a family of four earning 150 percent of the poverty level, or $33,075 a year, will have to pay 4 percent of its income, or $1,323, on premiums. A family with income of 400 percent of the poverty level will have to pay 9.5 percent, or $8,379. In addition, if your income is below 400 percent of the poverty level, your out-of-pocket health expenses will be limited.1
When will the new preventive care improvements begin?
Under the PPACA, all Medicare beneficiaries receive preventive services without cost-sharing as of Jan. 1, 2011. In addition, an annual wellness visit to create a personalized prevention plan will now be provided under Medicare.4
I have a Medicare Supplement (Medigap) plan. Must I make any changes to my plan under the new law?
No, the PPACA does not require seniors to change their Medigap coverage. However, the law will be adding cost-sharing requirements to plans C and F that are sold after Jan. 1, 2015.4
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Young adults
How will the legislation affect young adults?
If you're an adult younger than 26, you can stay on your parent's insurance coverage as long as you are not offered health coverage at work. This provision is available to unmarried and married individuals.4
This benefit began in 2010, but will require regulations clearly spelling out eligibility criteria. In addition, people in their 20s will be given the option of buying a "catastrophic" plan that will have lower premiums. The coverage will largely only kick in after the individual has $6,000 in out-of-pocket expenses.1
If I no longer have to pay a separate premium for my CHAND coverage, will my overall health care costs be less if I move to my parent's insurance plan?
Not necessarily. You should compare the CHAND benefit plan design to the benefit design of your parent's plan to determine if the differences in out-of-pocket expenses are significant. In addition, you will want to determine if your parents will be required to contribute any additional premium to add you to their plan.
What happens if I have already moved from CHAND to my parent's plan?
Generally, you must be without CHAND coverage for 12 months before being eligible for coverage again. However, if you have maintained qualified previous health insurance coverage, you may be able to reenroll with CHAND at an earlier date under the provisions of the Health Insurance Portability and Accountability Act (HIPAA). Please contact a CHAND Service Center representative for more information.
If I have already left my parent's insurance plan, can I move back to their coverage?
You may be eligible to reenroll in your parent's plan. Contact your parent's insurance carrier to determine if you meet eligibility requirements for the plan.
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Cost
How much is all this going to cost? Will it increase my taxes?
If you have a high income, you face higher taxes. Starting in 2013, individuals will pay a higher Medicare payroll tax of 2.35 percent on earnings of more than $200,000 a year and couples earning more than $250,000, up from the current 1.45 percent. In addition, you will face an additional 3.8 percent tax on unearned income such as dividends and interest over the threshold.
Starting in 2018, the law will also impose a 40 percent excise tax on the portion of most employer-sponsored health coverage (excluding dental and vision) that exceeds $10,200 a year for individuals and $27,500 for families. The tax is often referred to as a "Cadillac" tax. The law also will raise the threshold for deducting unreimbursed medical expenses from 7.5 percent of adjusted gross income to 10 percent. The law also will limit the amount of money you can put in a flexible spending account to pay medical expenses to $2,500 starting in 2013. Those using an indoor tanning salon will pay a 10 percent tax starting this year.1
What will happen to my premiums?
The grim fact is that health care spending is likely to continue rising faster than general inflation well into the future, resulting in higher premiums. While some individuals and families with health problems may see their premiums decrease significantly under the new rating rules, for most Americans premiums will continue to increase from year to year.4
Further, when the insurance market reforms like guaranteed issue, no annual or lifetime limits, and expansion of dependent coverage are fully implemented, premiums may rise dramatically.
Sources:
1 Kaiser Health News
2 National Conference of Insurance Legislators
3 WhiteHouse.gov
4 National Association of Insurance Commissioners
5 Centers for Medicare and Medicaid Services
6 Healthcare.gov
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