Personal Finance

September 28, 2013

Affordable Care Act basics

Here’s what you need to know about the provisions, subsidies, fines and exemptions in the new health care law.
• The Affordable Care Act will require that individuals and families purchase insurance in 2014, unless they qualify for an exemption. For most people, however, there will be no change, because they already have insurance through their employer, Medicare or Medicaid. Those immediately affected by the new law will be the uninsured as well as people who buy individual insurance policies.
• Individual health plans available under the Affordable Care Act will be classed as Bronze, Silver, Gold and Platinum. The levels differ in the way the plans distribute medical costs. The plan with the least expensive premiums, Bronze, will cover about 60 percent of medical costs, leaving 40 percent to the individual. The plan with the highest premiums, Platinum, will cover about 90 percent of medical costs, leaving 10 percent to the individual.
• The Affordable Care Act prohibits insurers from charging women higher rates than men, from charging older people more than three times what younger people pay, and from rejecting customers with pre-existing conditions. However, insurers will be able to charge people who use tobacco as much as 50 percent more than those who don’t smoke.
• The law also creates an option for “catastrophic” plans for people under 30 years of age. These plans will have lower premiums than Bronze plans, but they will cover just three doctor visits a year and have other limits.
• All the plans – from Bronze to Platinum – are required to offer essential health benefits, including ambulatory and emergency services, hospitalization, maternity and newborn care, mental health and substance abuse services, prescription drugs and rehab, laboratory services, preventive and wellness care and pediatric care.

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