Common misunderstandings about federal health reform
There are many misconceptions about federal health reform, from who is affected to how much it costs. Below are some common misunderstandings that are explained.
The federal government is taking over health insurance
Much of the country's health insurance system remains employer based, and employers will continue to buy health insurance through private insurance companies. Also, federal financial help is available to make private insurance affordable to people who are on their own to buy an individual (non-group) plan. Federal reforms establish new rules and protections, however, so that plans contain minimum benefits and no one can be denied coverage based on health.
Everyone will see major changes
If you are covered through a large employer (currently 51 or more employees), you are unlikely to see major changes. However, you will see new protections such as limits on your out-of-pocket costs and a ban on dollar limits for essential health benefits.
If you are insured through a small employer (50 or fewer employees), or you are on your own to buy a plan in the individual (non-group) market, your plan will likely cover more. For example, all plans will include prescription drug coverage and basic vision care for children. The amount you have to pay out-of-pocket in deductibles and other cost-sharing may also change.
Premium increases will make coverage unaffordable
Premiums are the monthly amount you pay to have insurance. These costs may go up for some people, but down for others. Some key factors that determine whether rates might affect you:
- Pemiums may vary based only on a person's age, the area of the state in which the policy is sold, tobacco use, and the number of family members on a plan. Insurance companies must insure people with medical problems and cannot charge them higher premiums.
- The law reduces the difference in premiums charged for younger and older people.
- Health plans in the individual and small group markets must cover services that some of them did not cover before, and many plans will have lower out-of-pocket costs than they did before.
- There are new fees and other requirements placed on insurers by the Affordable Care Act. It is likely these requirements will increase premiums.
Because of these factors, insurance is likely to cost more for some consumers (younger and healthier people) and less for others (older and those with medical problems).
To help make coverage affordable, many people who buy an individual health insurance plan will be eligible for premium tax credits. Consumers under age 30 or who cannot afford coverage may be eligible to purchase catastrophic plans, which generally cost less. These plans will be available only in Cover Oregon, the state's new insurance marketplace.
Employers will drop coverage
Most employers, particularly large employers, are unlikely to drop coverage. This is because existing reasons to offer coverage - tax advantages, employee demand, a healthy workforce - remain in place.
Some employers in businesses that pay low wages, however, may conclude that their employees can obtain insurance at a lower cost through Cover Oregon with the premium tax credits and reduced cost sharing. These employers could choose to stop offering coverage.
Health care will be rationed
Nothing in the law requires or encourages health plans or providers to ration care. In fact, federal reforms prohibit insurance companies from discriminating on the basis of age, disability, or expected length of life. The Affordable Care Act states that insurance companies cannot "make coverage decisions, determine reimbursement rates, establish incentive programs, or design benefits in ways that discriminate." However, insurance companies will not pay for services not covered by a plan, such as care that is not medically necessary. Consumers can appeal claim denials.
Everyone's taxes will go up to pay for the Affordable Care Act
Taxes will increase for individuals who annually earn more than $200,000 or couples that earn more than $250,000 because the law imposes an additional tax of 0.9 percent on earned income above those amounts. Net investment income (the sale of stock, for example) of people earning more than these amounts is also subject to the Medicare tax that is normally imposed on earned income. For those who earn less than these amounts, there will be no additional taxes to pay for the law.