The health-care law: Answers to frequently asked questions
The health-care bill is more than 2,000 pages long -- with hundreds more to come from regulators filling in the details. It will take years before all the details are set and people can see how the plan will affect their situation. But here are some commonly asked questions that can be answered now:
-- I own a business with 35 employees. I don't provide health-care insurance, but I'm hoping to soon. How will this bill affect me? Because you have more than 25 workers, you won't get the employer tax credits that start right away. Instead, you'll have to wait until 2014, which is when states begin operating the Small Business Health Options Program, or SHOP Exchanges, where small businesses will be able to pool together to buy insurance. The Congressional Budget Office forecasts that the exchanges will bring down premiums as much as 4 percent while adding people to the rolls of insured.
-- I'm self-employed and buy insurance on my own. Last year, it went up $200 a month, and I'm worried it will go up more in the future because of this bill. Will it? That is hard to predict. The legislation does immediately create a process for reviewing increases in health plan premiums and requires plans to justify any increases. And once the state-based American Health Benefit Exchanges are up and running in 2014, you will be able to shop for health insurance among competing carriers.
-- My employer has a good health plan. Will I have to pay more? Not as a result of the legislation. Your costs might go up in the next few years, but rising medical costs are mostly to blame for what's driving up premiums now. The health-care law does contain cost-control provisions, but they won't have much of an effect for at least five years.
-- I'm a Medicare beneficiary. Should I expect to pay more? That's certainly possible later on, but in the short term, you'll pay less for preventive services and prescription drugs. Starting in 2011, those in Medicare will receive free preventive-care services, such as screenings for colon, prostate and breast cancer. The threshold for income-related Medicare Part B premiums for 2011 through 2019 will be frozen.
Also, those beneficiaries who have high drug costs and fall into the "doughnut hole" coverage gap will get a $250 rebate this year. In 2011, beneficiaries in the gap will be able to get a 50 percent discount on brand-name drugs. By 2020, the gap will be eliminated. That means that seniors who now pay 100 percent of their drug costs in the doughnut hole will pay 25 percent.
-- My Medicare is supplemented by my former employer. Is that in danger? If your former employer offers prescription drug coverage to Medicare-eligible retirees, that benefit might be in danger. Starting in 2013, the tax break employers get for providing that benefit to retirees will be cut, increasing the likelihood employers will drop it.
You might have to pay more if your supplemental coverage is through Medicare Advantage, because government payments to those plans will decrease. You could lose extra benefits such as free eyeglasses and hearing aids.
-- I make $300,000 a year and have a very generous employer-paid health plan. How much more will I have to pay? You do face higher taxes. A higher Medicare payroll tax of 2.35 percent will begin in 2013 on earnings of more than $200,000 a year for individuals and more than $250,000 for couples, up from 1.45 percent. You'll also face an additional 3.8 percent tax on unearned income such as dividends and interest over the threshold.
-- I just graduated from college. I don't have a job and can't afford insurance. Will I be affected? You will be eligible for coverage under your parents' health-care plan as long as you are single, younger than 26 and are not eligible for other employer-provided health coverage.
-- My family has income of about $60,000, but we haven't been able to afford health insurance. Can we get it now? You might be eligible for government subsidies to help you pay for private insurance that will be sold in the health exchanges that will begin operation in 2014. Premium subsidies will be available for families with incomes from $29,327 to $88,000. But there's no help until then.
-- My insurance coverage was canceled last year when I exceeded the lifetime cap. Can I get back on it now? You probably would qualify for the new high-risk pools, which will be effective within 90 days of the bill's enactment. A participant will pay the full cost, but the premiums will be set as if the person did not have a preexisting condition.
-- Kiplinger's Personal Finance