Obamacare plans go into effect: What's next?

By Posted : 01/10/2014

health care reform exit road signDespite a rocky start, enrollment in health plans is picking up in the new health insurance exchanges as the most significant provisions of the Affordable Care Act take effect.

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Open enrollment for 2014 continues through March 31, the deadline to sign up for a health plan and avoid a tax penalty this year.

Starting with 2014 health plans:

  • Insurers can't deny you coverage or charge higher premiums just because you're sick or have a health condition.
  • Policies must offer a standard set of 10 essential benefits, including preventive care, emergency treatment and maternity care.
  • Health plans can't put a dollar cap on the amount of benefits you receive annually or over your lifetime.
  • The amount you pay out of pocket for health care before the policy picks up the tab is capped.
  • And you can receive government subsidies to make coverage more affordable if your income falls below 400 percent of the federal poverty line -- $94,200 a year for a family of four or $46,000 for an individual.

"As more and more people learn about the new benefits and protections they will receive through the Affordable Care Act, this new law will no doubt be increasingly appreciated and become a permanent feature of America's health care system," Ron Pollack, executive director of Families USA, a consumer advocacy group, said in a written statement.

A bumpy beginning for health insurance exchanges

About 2.1 million people have signed up for private insurance coverage through the federally run HealthCare.gov marketplace and the state-run marketplaces, also known as exchanges, Health and Human Services Secretary Kathleen Sebelius said in a Dec. 31 conference call with reporters.

That's still below what the administration had projected, but the enrollment pace has improved after a terrible debut. In October when HealthCare.gov opened for business, consumers had trouble submitting applications or even logging on to the site because of technical problems. The website serves as a portal to apply for health insurance through federally run marketplaces in 36 states. Some of the state-run exchanges fared better. Together, the 14 state marketplaces accounted for 75 percent of the health plan sign-ups in the first month.

Federal health officials brought in extra help, and software engineers worked around the clock to work out the bugs. The Obama administration has said HealthCare.gov's problems are largely fixed.

Of the more than 1.1 million people who enrolled in a health plan through HealthCare.gov from Oct. 1 through Dec. 24, more than 975,000 enrolled in December alone, according to the Center for Medicare & Medicaid Services.

"We are in the middle of a sustained, six-month open enrollment period that we expect to see enrollment ramp up over time," CMS Administrator Marilyn Tavenner said in Dec. 29 written statement.

Because of the bottleneck of applications and lingering glitches, deadlines have fluctuated. The Dec. 15, 2013, enrollment deadline to have coverage effective Jan. 1 was moved to Dec. 23. And in some cases people were allowed to finish applications as late as Dec. 27, 2013.

That gave consumers little time to receive bills and make the first premium payment by Jan. 1, 2014, so insurers nationwide extended the first premium deadline to Jan. 10. The Covered California state-based exchange extended the deadline to Jan. 15. For those who meet the new payment deadline, coverage will be retroactive to Jan. 1.

"Our community is taking an important step to give consumers greater peace of mind about their health care coverage," America's Health Insurance Plans President and CEO Karen Ignagni said in a press statement.

Looking forward

So far the March 31, 2014, deadline to enroll in coverage for this year remains firm. If you miss the deadline, you'll have to wait until the 2015 open enrollment period to buy private health insurance, unless you have a special circumstance, known as a "qualifying life event." The next open enrollment period will run from Nov. 15, 2014, through Jan. 15, 2015.You can buy outside the open enrollment period if you:

  • Get married
  • Have or adopt a child or become a guardian
  • Move to a new place that offers different health plan options
  • Lose other health coverage from a job loss, divorce, loss of eligibility for Medicaid or the Children's Health Insurance Program (CHIP), expiration of COBRA coverage, or decertification of a health plan. A plan is decertified if marketplace officials determine it no longer meets federal and state standards for health plans. Voluntarily quitting a health plan or losing coverage because you forgot to pay the premium doesn't count.
  • You're already in a marketplace plan and your income or household status changes, affecting your eligibility for tax credits or cost-sharing reductions.

However, you can enroll in Medicaid or the Children's Health Insurance Program (CHIP), government programs for low-income families, anytime during the year if you qualify.

If you don't enroll in a health plan by March 31 of this year, you'll pay a tax penalty for 2014. The penalty for not having insurance is $95 or 1 percent of your annual income, whichever is greater.

As long as you sign up for coverage by March 31, you won't be penalized, even if you didn't have health insurance during the first few months of the year. Keep in mind, though, that the coverage is not retroactive. Generally your health plan will go into effect on the first day of the following month if you sign up by the 15th of the current month. So if you sign up for a health plan on Feb. 15, the coverage will begin March 1. If you sign up on Feb. 16, the coverage will go into effect April 1.

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