By Tony Pugh
WASHINGTON: After more than three years of piecemeal implementation, the Affordable Care Act reaches an important new phase in 2014, when most of the law’s major provisions finally kick in.
For consumer advocates who have championed health-care reform, the wait is over.
“Wednesday is not only the start of the New Year, it also ushers in a long-awaited era of affordable health coverage and care for families across America,” said Ron Pollack, executive director of Families USA, a consumer health advocacy organization.
Many of the biggest changes, like the health insurance marketplaces and subsidies to help consumers purchase coverage, debuted in 2013. But marketplace insurance policies don’t take effect until January, and the federal government won’t make subsidy payments to insurers until mid-January.
In addition to those new provisions, here are some of the major changes the health-care law ushers in for 2014.
• Individual mandate:
The signature provision of the Affordable Care Act requires most individuals and their dependents to have health insurance in 2014 or pay a penalty for noncompliance in 2015 when they file their 2014 taxes.
People who enroll for coverage no later than March 31, 2014, will avoid the penalty. The 2014 penalty is 1 percent of annual income, or $95 per person, whichever is greatest. The penalties increase each year and become 2.5 percent of income, or $695 per person, in 2016. Each uninsured child will draw a $47.50 penalty in 2014. It grows to $347.50 per child in 2016.
• Medicaid expansion:
An estimated 9 million Americans are expected to gain health insurance in 2014, when 25 states and the District of Columbia implement the expansion of Medicaid, the state-federal health insurance program for the poor and disabled, according to the Kaiser Family Foundation.
Under the new guidelines, non-elderly adults who earn up to 138 percent of the federal poverty level will qualify for Medicaid coverage. That’s about $15,900 for an individual in 2013, or nearly $32,500 for a family of four.
• Insurance market consumer protections:
The Affordable Care Act’s list of new consumer rights and protections apply mainly to plans in the individual and small group markets.
In 2014, the new rules guarantee access to individual and small-group coverage regardless of current or past health problems. The rules also require each plan to cover at least 60 percent of medical costs, limit the amount that older policyholders can be charged and outlaw annual and lifetime benefit-spending limits.
In addition, they no longer allow insurers to vary rates based on gender, occupation or medical claims history.
If a plan denies a claim, insurers have to tell the claimant why and how to dispute the decision.
In 2014, all individual and small-group plans must cover a list of “essential health benefits,” which includes substance abuse services, pediatric dental and vision care, mental health treatment, preventive and wellness care and maternity and newborn care.
• Small-business tax credit:
Employers with fewer than 25 full-time equivalent workers who earn an average of roughly $50,000 a year or less could qualify for a tax credit worth up to 50 percent of their employer contribution toward workers’ premium costs. Only employers who pay at least half of their full-time employees’ premium costs are eligible for the credit, which is only available if obtained through the SHOP (Small Business Health Options Program) Marketplace.