Health insurance in America will change forever in 2014, when the full, seismic impact of the Patient Protection and Affordable Care Act rolls out across the country.
Beginning January 1, 2014, the vast majority of Americans will be required to purchase health insurance as part of health care reform legislation, commonly known as Obamacare.
Next year's changes will benefit millions of Americans who have struggled to obtain health insurance in the past, says Sara Collins, vice president of the Commonwealth Fund, a private foundation focused on health care issues.
"This is a game changer for people who lose their jobs, who lose health benefits when an employer decides not to cover them anymore, or who decide to retire early," she says.
How do I get Obamacare?
How can you get your piece of Obamacare? Follow these four steps.
1. Visit your health insurance exchange.
Depending on where you live, health insurance will be available in the following ways:
• Through a health insurance exchange, or marketplace, run by your state.
• Through a health insurance exchange run by a partnership between your state and the federal government.
• Through a health insurance exchange run by the federal government.
Healthcare.gov includes a list of states and how their exchanges will be run.
"Consumers in all 50 states will have access to a new insurance marketplace," says Richard Olague, a spokesman for the Centers for Medicare & Medicaid Services (CMS), which is in charge of implementing many of the features of health reform.
Americans can start purchasing insurance through the appropriate health insurance exchange in their state on October 1. The insurance itself will take effect on January 1, 2014.
There will be standardized forms that consumers must complete to apply for plans on the exchanges and tax credits that may make coverage more affordable.
2. Shop for a plan.
In the past, health insurance plans differed greatly in terms of the benefits they offered. But that will change with the plans offered through the health insurance exchanges.
"All plans must provide essential health benefits," Olague says.
These benefits include:
• Ambulatory patient services.
• Emergency services.
• Maternity and newborn care.
• Mental health and substance use disorder services, including behavioral health treatment.
• Prescription drugs.
• Rehabilitative and habilitative services and devices. (Depending on the state you live in, such devices could include things such as prosthetics and mobility equipment.)
• Laboratory services.
• Preventive and wellness services and chronic disease management.
• Pediatric services, including oral and vision care.
"People can go to a health insurance marketplace or exchange and sign up for good coverage, comprehensive coverage that covers the services that they need, just like an employer-based health plan," Collins says.
The health insurance exchanges will offer four tiers of coverage, and various plans will be available within each one. Tiers are differentiated based on the average amount a plan will pay, as follows:
• Bronze: the insurer pays 60 percent of costs.
• Silver: the insurer pays 70 percent of costs.
• Gold: the insurer pays 80 percent of costs.
• Platinum: the insurer pays 90 percent of costs.
The portion policyholder’s must pay include deductibles and co-pays.
No matter which health plan you choose on a health insurance exchange, it will limit your annual out-of-pocket costs.
There likely will be a tradeoff for choosing a plan where your insurer takes on more of the cost of your care, says Cheryl Fish-Parcham, deputy director of health policy for Families USA, an advocacy group that promotes health care for all Americans.
"If you buy the most generous plan, you'll probably have higher premiums," she says.
3. Find out if you qualify for tax credits.
Beginning in 2014, the vast majority of Americans must purchase health insurance, as mandated by health care reform. If you don’t, you may be subject to a penalty, Fish-Parcham says.
In 2014, the penalties for going without coverage are $95 for an adult, $47.50 per child, and up to $285 for a family, or 1 percent of income, whichever is greater, she says.
"Some people are exempt from the penalties, including those who face certain financial hardships," Fish-Parcham says.
Many Americans will receive financial assistance to help pay for health coverage. If your income is up to 400 percent of the poverty level, you may qualify for tax credits to help reduce the cost of your health insurance. In 2013, people who’d be eligible for such credits include individuals making roughly $46,000, and families of four making roughly $94,000.
These tax credits will be available right away in the form of advance payments that reduce monthly health plan premiums.
Each state also has the option of expanding Medicaid coverage to people with incomes up to 133 percent of the federal poverty level. Originally, health reform legislation required all states to expand Medicaid coverage. However, the Supreme Court ruled last year that such a mandate was unconstitutional.
Last year, the Congressional Budget Office projected that the court's ruling would result in 6 million fewer Americans qualifying for Medicaid. However, the CBO estimated that 3 million of those people would find coverage through health insurance exchanges, leaving another 3 million without coverage.
4. Ask for help.
The federal government is taking steps to guide consumers through the process of applying for Obamacare.
The U.S. Department of Health and Human Services "is working on consumer assistance that will go live this summer," Olague says.
That guidance will come from experts – such as navigators, in-person assistance personnel, certified application counselors, and agents and brokers. They can help you determine if you’re eligible for aid, and guide you in selecting a health insurance plan and applying for coverage.