The next step for health reform is that the rubber will really hit the road. Between now and January 1, the core of the law will take effect.
However, for most people, not much will change. That’s because most Americans receive health insurance through an employer, and most of those plans will remain in place. Some plan features may change, like co-payments and deductibles, but that would have happened without health reform.
On the other hand, those who buy policies on their own, or who can’t find coverage at all will see big changes. Starting October 1, they will be able to shop for a policy on an insurance exchange. Those are online marketplaces that will match applicants with menus of insurance options. Their most important feature will be that no one can be denied coverage because of a preexisting medical condition. Applicants with incomes less than four times the federal poverty level (currently $45,960 for an individual and $94,200 for a family of four) will receive subsidies to help with the cost. Policies sold on the exchanges will become effective on January 1, 2014.
The other big change is that Medicaid will cover many more people starting January 1 in about half the states. Everyone with an income below 138% of the federal poverty level will be eligible (currently $15,856 for an individual and $32,499 for a family of four). However, those who live in Pennsylvania will be out of luck. Unless the Corbett administration switches course, the Commonwealth’s Medicaid program will remain unchanged.
Also, starting in 2014, you will have to have health insurance or pay a penalty when you file the following year’s tax return. (A gap in coverage of up to three months is permitted.) You can meet the requirement with insurance from any source as long as it complies with minimum standards. That includes employer plans, Medicare, Medicaid, and individual policies bought on an exchange. The penalty will be small at first – the greater of $95 or 1% of taxable income for 2014. However, it will rise in stages to the greater of $695 or 2.5% of taxable income in 2016. Exceptions are available for those who face financial hardship or have religious objections.
There will also be changes for some employers next year. Those with 50 or more full-time workers will have to provide health benefits or pay a penalty. Full-time means at least 30 hours a week. Most larger companies already offer coverage and will continue to do so. However, companies that are close to the 50-worker cut-off may face some tough decisions.
These are the biggest changes. Numerous smaller ones will affect more technical aspects of health coverage.
Robert I. Field, Ph.D., J.D., M.P.H. is a professor of law at the Earle Mack School of Law and professor of health management and policy at the School of Public Health at Drexel University. He also writes for The Field Clinic blog.