What health reform means if you're already insured

By Susan Ladika Posted : 04/18/2013

health reform and the insuredEven if you already have health insurance through your employer, or you're self-employed and purchase it on your own, health care reform could bring changes for you.

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While much of the focus has been on how the Patient Protection and Affordable Care Act will reduce the number of uninsured Americans, millions of people who already have insurance may be affected by the reform. (See: "Health reform sticks: Now what?")

Those who work for small employers or are self-employed "could see big changes," says Paul Fronstin, director of the health research and education program at the Employee Benefit Research Institute.

Beginning Oct. 1, small businesses and individuals can start enrolling in health plans for 2014 through state health exchanges. The exchanges, or health insurance marketplaces as they are now called, will offer consumers a choice of health insurance plans. States will operate some of the marketplaces, the federal government will operate others.

With a few exceptions, everyone will have to have some form of health insurance next year, or pay a penalty. ( See: "Health insurance marketplaces: How do they operate and who benefits?")

What if I work for a large employer?

If you work for a major corporation and already have health insurance, you'll probably experience the fewest changes because of reform.

The changes you've already seen, such as higher deductibles and an increasing focus on wellness incentives, are likely to continue in the coming years, says Steve Wojcik, vice president for public policy with the National Business Group on Health.

But if you haven't been able to get health insurance from your employer because you work part time, your fortune might change. Under the new law, anyone who works at least 30 hours a week is considered a full-time employee, so you'll be offered health insurance just like everyone else, Wojick says.

And if you move to a new employer, the longest you'll have to wait for health insurance coverage is 90 days, rather than having a possible six-month wait.

What if I work for a small business?

This is where the real changes come in. Small businesses with fewer than 100 employees will be able to shop for insurance on state health exchanges.

That should give small business owners more health plan choices and lower prices, according to the federal government.

But purchasing on a state exchange isn't mandatory. Your employer can still buy health insurance outside of the exchanges.

And if you work for a company with fewer than 50 employees, there's no requirement that your employer offer health insurance. (Larger employers pay a penalty if they don't offer health insurance.) Although it isn't mandatory, "(providing) health insurance is something employers really want to do for their employees," says Erica Dowell, an outreach manager with the Small Business Majority.

Your employer also might decide to give you money and let you buy insurance on your own, so you'll have more choices, Fronstin says.

While some might find that daunting, "some people will welcome it. They're used to shopping on Amazon," he says.

If your employer doesn't offer health insurance now, and won't next year, you'll be able to buy it on the exchange.

What if I'm self-employed?

If you're self-employed and already purchase health insurance, you'll join those eligible to buy your insurance through a state exchange.

But if you love your current policy, and it's still offered by your insurer, you can keep it if you prefer, Fronstin says.

Depending on how much you earn, you could experience major sticker shock, says Brian Haile, senior vice president for health policy at Jackson Hewitt Tax Service. (See: "Health insurance now tied to taxes.")

On the bright side, those who earn up to 400 percent of the poverty level, which is $94,200 for a family of four, can receive a government subsidy to help offset health insurance costs. The size of the subsidy varies, based on your income and household size.

On the other hand, if you earn more than 400 percent of the poverty level, prices "are likely to go up considerably, compared to what individual plans cost now." In Tennessee, where Haile lives, they're predicted to rise by about 50 percent. And that's on top of the usual cost of medical inflation. "There are pretty substantial cost implications."

Haile says a number of things will affect prices for individuals -- the requirement to issue policies regardless of pre-existing conditions, guaranteed renewal and the requirement that plans offer particular benefits, which may be more generous than they are now.

As a result, he expects more people to turn to high-deductible health insurance plans.

If your income fluctuates from year to year, you should be careful when seeking a subsidy, he says. Perhaps last year you made 395 percent of the poverty level, so the subsidy would help you cover your costs. But if your income reaches even 401 percent of the poverty level, and you'd sought a subsidy, you'd have to return it.

In that case, he says, "a $200 bonus will set them back a lot more than it puts them forward."

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