Know your way around the health-care overhaul

Still a little hazy about the health care overhaul? You have plenty of company.

About half the people surveyed earlier this spring by the nonpartisan Kaiser Family Foundation felt they didn’t have enough information to understand how the law will affect their family. Among those with an annual household income of less than $30,000, some 30 percent thought the law had been repealed by Congress or the Supreme Court.

That’s the low-income demographic the law is designed to help the most as it extends insurance coverage to millions of uninsured people.

With those results in mind, here are five key points everyone should know about the overhaul, heading into this fall and 2014, when major changes start to unfold.

1. THE LAW IS IN EFFECT: Congress passed President Barack Obama’s health care law in March 2010, and the overhaul has since survived 37 attempts by Republicans in the House of Representatives to eliminate, defund or partly scale it back.

The law, known as the Affordable Care Act or ACA, also survived a more substantial test last year when the Supreme Court upheld its constitutionality. However, the court’s ruling gave states the right to decide whether to expand Medicaid, the state- and federally funded program that covers the needy and disabled people. Medicaid plays a key role in the ACA’s plan to provide insurance coverage to more Americans.

2. YOU WILL BE REQUIRED TO HAVE COVERAGE: The overhaul mandates that, starting next year, most U.S. citizens and legal residents obtain coverage or pay a penalty. Some exemptions have been carved out for groups that include Indian tribe members, prisoners and individuals who belong to health care sharing ministries.

The annual penalty starts at $95 per adult, or 1 percent of family income — whichever is greater — and then rises over the next few years.

3. MAJOR MILESTONES ARE LOOMING: Next year, the ACA will take two major steps toward its goal of providing more individuals with insurance coverage.

Medicaid will be expanded in states that allow it, and many people will be able to buy coverage using income-based tax credits.

These tax credits, or subsidies, are reserved for people who can’t get health insurance through an employer and who don’t qualify for Medicaid, Medicare or military-based coverage.

State-based benefits exchanges will debut in October and they will enable consumers to go online to compare 2014 coverage terms and prices and then use tax credits, if they qualify, to buy a policy.

4. FINANCIAL HELP EXTENDS TO THE MIDDLE CLASS: The tax credits or subsidies will be available to help individuals and families making up to four times the federal poverty level. For 2013, that equates to an income of $94,200 for a family of four in all states except Alaska and Hawaii.

The tax credits will be doled out on a sliding scale. That means individuals with incomes closer to the poverty guideline will receive bigger credits.

These credits won’t lower premiums, but they can ease the insurance bill depending on a person’s income. For instance, a 30-year-old with an income of $30,000, who doesn’t smoke or have kids, could receive a tax credit worth more than $900. That person might then have to pay $1,925 for insurance that would provide the minimum level of coverage required under the overhaul. That’s according to a subsidy calculator designed by Kaiser and posted on the foundation’s website at http://kff.org/interactive/subsidy-calculator/ .

Starting next year, the ACA also will help individuals get coverage regardless of their health. Currently, if you already have a medical condition, insurers can either reject your application or charge a much higher price. Many people with heart trouble or diabetes are unable to find an insurer willing to cover them because of the risk they represent for future claims.

5. INSURANCE PRICES MAY CHANGE: Health insurers are warning that premiums, or the cost of coverage, could soar for some people due to a number of factors. Those include taxes and fees, as well as coverage requirements the law imposes.

The extent of any price hikes will depend on many variables, such as where people live, their current coverage and health and their age.

Young, healthy people who currently have low-cost coverage may see some of the biggest hikes in part because the law limits the price differences an insurer can charge a person based on age.

Insurers generally charge seniors more because they tend to generate more expensive claims.

The subsidies that individuals start receiving next year will help offset these price hikes. Most who gain coverage in the individual insurance market will have income levels low enough to qualify for some subsidy help, said Jennifer Tolbert, a health reform expert with Kaiser.

She said that will be especially true for the younger customers who may face the biggest price hikes.

About 149 million individuals have employer-sponsored health coverage in the United States, making it the largest source of coverage. Those who work for big companies may not see a lot of change, at least initially.

The law will add costs like premium taxes to the average worker’s insurance bill. But the employer generally pays most of that bill, which means some employees may not notice the additional cost.