Healthcare Reform: What Will It Mean to You?

Have you been tracking the Patient Protection and Affordable Care Act (PPACA) closely? If you haven't been, you should be paying attention because you may be affected. If you have been tracking the changes in our healthcare system, you may have noticed that while many changes have gone through as planned, the administration is running into some delays. Some consumers are already seeing basic services included in their current health care such as free immunizations, wellness check-ups, children up to the age of 26 able to remain on their parents insurance plan, free mammograms and cancer screenings, among others. The next big step in the Affordable Care Act (ACA), also called ObamaCare by some, is the requirement that all Americans obtain health insurance coverage.

The U.S. Department of Health and Human Services has given conditional approval to 18 states to run their own Small-Business Health Options Programs (SHOPs) and to another 17 to run their own insurance exchanges for individuals. Unfortunately, while progress has been made, "many activities remain to be completed and some were behind schedule," a report put out by the US Government Accounting Offices says. This next piece of healthcare reform is scheduled to go into effect starting January 2014. Since individuals need to be able to purchase health insurance beginning October 1, 2013, this delay in getting health insurance exchanges up and running could impact those who need to purchase it.

The health insurance requirement includes a Mandate Tax that individuals would have to pay in 2014 if they don't have or purchase health insurance. The law requires that individuals have health insurance through their employer, through Medicare or other government program, or individually. Those who would have to spend more than 8% of their household income or are already covered under Medicare or Medicaid will be exempt from the requirement. These individuals may have an opportunity to purchase insurance at discounted prices. The mandate is expected to affect 2% of the population. The number is lower than many would expect because most individuals already have insurance through their employer or a government program.

One of the biggest concerns of those trying to implement the ACA is that young people just starting out may skimp by not purchasing health insurance, assuming that they won't need it for a long while. Starting in 2014, those who can afford to, but do not purchase health insurance, will pay a tax penalty: For an individual, the tax will start at $95 a year or up to 1 percent of income, whichever is greater, and rises by 2016 to $695 per individual or 2.5 percent of income. For a family, the tax is capped at $285 in 2014 and rises to $2085 or 2.5 percent of income in 2016. The Internal Revenue Service will collect the penalties via tax returns and there are already plans for the new tax form for 2014 to include a space to list your source for health insurance.

In 2014 mandatory basic services that must be included in healthcare plans are:

    Emergency Services
    Hospitalizations
    Laboratory Services
    Mental Health and Substance Abuse Treatment
    Outpatient or Ambulatory Care
    Pediatric Care
    Prescription Medications
    Preventive Care
    Rehabilitative and Habilitative Care
    Vision and dental care for children

So, what are your options? If you already have insurance through your employer you don't need to worry about making a change. For those who are pretty healthy, catastrophic care with higher deductibles may be the right choice. This type of plan would make sense for those who are under 30, those for whom a standard health plan would cost more than 8% of household income, those who only need 3 or fewer primary care visits per year and those who only need the essential health benefits listed above. Catastrophic plans have higher deductibles for anything beyond the basic services, usually $1,500 to $2,000 per year.

Lab testing facilities can easily fill in some of the gaps that catastrophic plans may have. Some cost effective tests and programs to consider include ongoing testing after an initial baseline during a primary care visit, more frequent tracking of cholesterol or diabetes, a Telemedicine program for telephone consults and prescriptions, informational drug testing for teens or before employment tests and additional informational tests that may not be covered under the essential services, like:

    Vitamin deficiencies
    Testosterone levels
    DNA tests

A surprising finding that was documented in Forbes magazine shows that young people may be better off without ObamaCare. The expectation is that many of them will take the easy route and pay the relatively low tax and skip buying healthcare altogether. A study by David Hogberg, PhD., published this month by the National Center for Public Policy Research indicates that, "About 3.7 million of those ages 18-34 will be at least $500 better off if they forgo insurance and pay the penalty and more than 3 million people will be $1,000 better off if they also skip insurance and just pay the mandate tax."

Where does that leave you? It will take some research and soul searching for young people or those working for very small companies (less than 50 employees) or self-employed to determine what the best option is. Many should consider catastrophic care with outside or supplemental lab or testing services to fill in gaps. If you already have insurance through your employer, you're one of the lucky ones. Let's just hope that companies don't have to lay off workers to ensure that they can cover the ones who are left.

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