Obamacare for the Previously Insured

THE IMPLEMENTATION OF Obamacare (aka the Affordable Care Act) hasn’t exactly been seamless. And while some people are still fuming over malfunctioning websites and canceled policies, others are just wondering, “If my policy wasn’t canceled and I’m not using the insurance exchange, does any of this matter to me?”

In a word, yes. The largest overhaul of our nation’s health care system impacts everyone. It’s still too soon, however, to evaluate many of the specifics. Some experts argue the new laws will greatly improve the overall quality of health care. Others wholeheartedly believe the quality will decline. Whether health care costs will skyrocket is also a big unknown. “I think it’s going to be a few years before we can really gauge effectiveness of the Affordable Care Act,” says Nicole Kasabian Evans, vice president of communications for the California Association of Health Plans. “We need to give people time to embrace all the changes.”

Most Likely to Benefit

Most Likely to Benefit Of the previously insured population, the subset most likely to notice immediate change is the 15 percent of Californians who are self-insured or receive their health care benefits through a workplace with fewer than 50 employees. This group will likely enjoy more robust coverage. The reason: all individual and small business insurance plans must now include the same essential benefits provided by health care plans purchased through the government exchange.

Insurance companies, for example, can no longer impose a lifetime limit on what they spend on essential health care benefits like hospitalization, rehabilitative services and emergency services. Additionally, these insurance plans must cover things like prescription drug and mental health services. Benefits may include co-pays or require you to meet a specific deduction minimum, but coverage cannot be excluded for the policy.

Of course, these givens can include many caveats. If you have a very basic policy, for example, your insurance company must pay for your prescription drugs, but that doesn’t mean they’ll cover any and all prescriptions. You may be limited to a generic version of a drug, and if there are multiple drugs to treat a specific illness you may only have access to the least expensive option.

Keep in mind, however, that a small percentage of Californians with individual and small business policies are exempt from adhering to new coverage minimums because they were purchased before the Affordable Care Act was signed into law back in 2010. However, once a plan undergoes any significant changes in pricing or benefits, it becomes ineligible for grandfather status. So the number of remaining noncompliant plans is expected to dwindle as time goes by.

How do you know if your plan has to comply with new health care laws? The easiest way to find out is to ask your company’s benefits administrator. If you are a small business owner or do not have group coverage, you’ll need to read the fine print. Insurance companies must disclose grandfathered plans in all materials describing plan benefits.

And for Everyone Else

If you’re one of the three out of four Californians insured through a large group policy, you may still benefit from changes to the health care law. One perk that’s universal to all health care plans: Dependents under age 26 can now stay on their parents’ policy, even when they have access to their own employer-sponsored health plan. This provision actually became law when the Affordable Care Act was first passed in 2010. What’s new, however, is that as of 2014, all plans, even those with grandfather status, must extend those benefits to adult children, even when that child has the option of being covered by an employer.

The new health care law also eliminates the problem of “job lock,” a situation where an employee or one of his dependents develops a health condition that prevents him or her from leaving a job for fear that medical insurance will then be too expensive or not available at all. As of 2014, there’s no such thing as being uninsurable. An applicant cannot be turned down regardless of any preexisting health conditions, nor will a chronic health condition affect the amount you pay for premiums. “Your insurance premiums will be based only on your age and where you live,” says Kasabian Evans. “If you buy through the exchange, your income will be a factor, because depending on what you earn, you may be eligible for subsidies.”

Kasabian Evans also points out that although the Affordable Care Act is a federal law, nuances on how certain rules are enforced can vary from state to state. So if you still have questions, visit the California Association of Health Plans website at calhealthplans.org. It’s got lots of good information. And it doesn’t freeze up or get glitchy when you poke around for answers.

Dawn Denberg

Dawn Margolis Denberg has worked as a professional journalist for 20 years. Her work has appeared in top publications, including Wired, Shape and Parenting. She has also written several books for children including, The Men in Black Agent’s Manual The Official Godzilla Movie Fact Book. And, most recently, an episodic audio series for Tales Untold.