For Individuals

Health reform will bring a number of improvements and additional benefits for consumers - but at a cost. These changes look different for every consumer. Rates will be higher, but some customers will pay less than they do now. Some will pay more. Find out more about health care reform and how you can get the most benefit from the law.

What does health care reform mean for individuals?

Insurance Reforms

The Affordable Care Act makes large, sweeping changes to the way health insurance is packaged, priced, and delivered.

Insurers may no longer rate people based on their health status and must meet certain pricing restrictions.

Exchanges will alter the way people without employer-sponsored coverage shop and compare health insurance plans.

Some of the changes will benefit some individuals and families, while others may experience an increase in insurance premiums.

In the Spotlight

ACA Insurance Reforms

Individual Mandate

The individual mandate is a widely recognized provision of the Affordable Care Act. Most individuals are required to purchase insurance or pay a penalty.

In 2014, the penalty is of the greater of $95 or 1% of income and becomes greater every year following, maxing out in 2016 at the greater of $695 or 2.5% of income.

In the Spotlight

Health Care Reform and the Individual Mandate

Affordable Care Act

The Affordable Care Act (ACA) was signed into law in March 2010 and contains many provisions that have staggered implementation dates from 2010 through 2018. The flagship achievements of health care reform are a dramatic expansion of health insurance coverage and the inclusion of many new and richer benefits in most health insurance plans.

In the Spotlight

The Implementation of Health Care Reform on September 23

The Implementation of Health Care Reform in 2011

Halfway to Health Care Reform

The ACA and the Supreme Court - After the Decision

Full Steam Ahead - ACA in 2013

Subsidies

The Affordable Care Act got its name from the provisions intended to make health insurance coverage more affordable to the majority of the uninsured individuals in the country. The law accomplishes this primarily through two kinds of subsidies: one covers a portion of the premium and one reduces eligible consumers’ out of pocket expenses.

These subsidies, offered exclusively through the Exchange, are only available to qualifying individuals and families who are at 400% of the federal poverty level In 2012, that results in those with an income of less than $45,960 for individuals and less than $94,200 for families of four.

In the Spotlight

Health Care Reform and Health Insurance Subsidies

Exchanges

Exchanges (also known as Health Insurance Marketplaces) are online marketplaces where individuals, families and small businesses can shop for coverage.

Exchanges also serve many functions for implementing the Affordable Care Act, including allowing individuals and small businesses to shop and compare coverage, providing standardized information about the coverage and pricing and, perhaps most importantly, determining eligibility for and connecting individuals with federal subsidies to purchase insurance.

While Exchanges will be implemented in all 50 states, some states have chosen to implement their own, state-based Exchanges, while the federal government will implement Exchanges in others, and still other states will have a hybrid version, called a Partnership Exchange. North Carolina plans to operate under a Federally Facilitated Exchange (FFE) in 2014.

In the Spotlight

Health Care Reform and American Health Benefit Exchanges

Actuarial Value

Actuarial value is a way of determining the average amount of a consumer’s health care expenses that will be paid by their health plan compared to how much the consumer pays out of pocket. In the Affordable Care Act, this term is frequently used to describe the requirements and restrictions of qualifying plans.

For example, plans offered through the Exchanges will be categorized into metallic levels (bronze, silver, gold, platinum) based on their actuarial value.

In the Spotlight

ACA and Actuarial Value

Agents and Brokers

Health insurance brokers will no doubt be affected by the Affordable Care Act – their services will be especially needed to explain the complicated changes and opportunities for businesses and individuals.

The Affordable Care Act makes many sweeping changes to how health insurance is sold, including new requirements on rating, medical spending and Exchanges (please see Exchanges section or Spotlight).

Brokers will be at the forefront of these changes, as the primary actors between health insurers and consumers.

In the Spotlight

Health Care Reform and Insurance Brokers

Grandfathering

"If you like your plan, you can keep it" seemed to be the Affordable Care Act motto when it was signed into law in 2010. To "keep the plan you like," you must remain on what is referred to as a "grandfathered plan" or a plan that existed before March 23, 2010 (when the law was passed) and has not undergone particular changes.

Grandfathered plans are exempt from some provisions of the Affordable Care Act, like providing certain preventive services at no cost-share, but must implement others, like no waiting periods longer than 90 days.

Additionally, changes made to grandfathered plans including changing deductibles, copayments and coinsurance could result in the loss of grandfathered status.

In the Spotlight

Health Care Reform and Grandfathering

2013 Renewals

Student Health Plans

In North Carolina, there are around 570,000 students pursuing higher education at any given time. Of those, about 65,000 are enrolled in a BCBSNC student health insurance plan.

These programs have usually been unique in that they provide limited benefits and most services are performed at the student health center. This has allowed these plans to carry a very low premium.

The Affordable Care Act requires that these plans comply with certain provisions, like the medical loss ratio (see: Spotlight on Medical Loss Ratio) and the removal of annual limits.

In the Spotlight

The Affordable Care Act and Student Health Plans

Medicaid Expansion

When the Affordable Care Act passed, one of the major ways it expanded health insurance coverage was through the expansion of Medicaid. The Supreme Court decision in 2012 made the expansion of Medicaid optional for states.

Some states may choose to expand in 2014 or later. For those states that do not expand Medicaid, many additional thousands of residents may remain uninsured.

In the Spotlight

Health Care Reform and Medicaid

Considerations for young adults

It's a mantra that's been repeated time and time again across the state of North Carolina: reform impacts everyone differently. That's especially true for individuals and families who purchase their own insurance - there are subsidies, grandfathered plans, and transitional plans, oh my! In particular, young adults have many considerations when choosing how to carry insurance for the year 2014. A lot of the choices depend on an individual's circumstances and age. This paper will explain the different options for folks in this age group.

In the Spotlight

Health Care Reform and Young Adults

Essential Health Benefits

The Affordable Care Act includes a requirement that all non-grandfathered individual and small business insurance plans must cover a certain set of services within 10 categories established by the Institute of Medicine.

Though the 10 categories are dictated federally, the specific services that must be provided are determined at the state level by the selection of a benchmark plan. They include:

  • Ambulatory patient services
  • Emergency services
  • Hospitalization
  • Maternity and newborn care
  • Mental health and substance use disorder services, including behavioral health treatment
  • Prescription drugs
  • Rehabilitative and habilitative services and devices
  • Laboratory services
  • Preventive and wellness services and chronic disease management
  • Pediatric services, including oral and vision care

In North Carolina, the benchmark plan is a BCBSNC plan and covers a comprehensive set of services that all North Carolina health plans must now offer in the individual and small group markets.

In the Spotlight

Health Care Reform and Essential Health Benefits

Prevention

The Affordable Care Act does a lot to boost access to preventive services and encourage consumers to use them. Health care reform also requires that many preventive services be provided at no cost to the consumer, such as colonoscopies and contraceptive services.

In the Spotlight

Health Care Reform and Prevention

Wellness

Employers have long been the primary source of health insurance coverage in this country. As the nation’s health continues to deteriorate, employers’ costs have risen exponentially. A few >unhealthy employees can account for 25-30% of an employer’s overall health care costs.

The Affordable Care Act has several provisions intended to enable employers to help their employees maintain or improve their health. The allowable incentive for employees participating >in a company-sponsored wellness program increases from 20% to 30% and there are grants available for certain small businesses to implement a new program.

In the Spotlight

The Affordable Care Act and Wellness Programs

Summaries of Benefits and Coverage

Summaries of Benefits and Coverage and Uniform Glossary documents are a requirement of the Affordable Care Act that went into effect in September of 2012.

The documents are intended to help consumers as they compare and shop for health insurance companies by explaining benefits in a consistent manner.

The federal government compares these documents to the nutrition labels found on prepared food packaging, but evaluating a health insurance plan’s benefits can be a bit more complex than evaluating the nutritional value in a can of peas.

In the Spotlight

Health Care Reform and Uniform Coverage Documents

Premium Impacts

Premiums will increase for three reasons:

  • Adverse selection. The Affordable Care Act (ACA) limits how much premiums can vary based on a person's age or health condition, which means younger and/or healthier people will subsidize coverage for older individuals. This increases the likelihood that younger, healthier people may choose to pay the relatively low penalty and wait to purchase health insurance until after they get sick or injured, thus driving up costs for everyone else.
  • New taxes imposed by the ACA. The variety of new taxes ($8 billion in 2014, increasing to $14.3 billion in 2018) will be passed to the consumer through premium increases.
  • Additional benefits required by the ACA. Starting in 2014, all health insurance policies will be required to include new mandated benefits. This means millions of people will be required to purchase health insurance plans that are more comprehensive, and more expensive, than they currently have.
Taxes and Fees

The Affordable Care Act (ACA) expands coverage dramatically with a combination of the individual mandate, federal subsidies to make insurance more affordable for low- and middle-income people, and the potential expansion of state Medicaid programs.

Most people agree that expanding health insurance coverage to millions more people in the United States is a good thing, but who picks up the tab?

There are many new taxes and fees included in the law designed to finance the coverage expansion and other new or reformed programs. These taxes include several on the insurance industry, medical device community, pharmaceuticals, some employers, and a specific fee for using the Exchange.

While paying for reform is important, new fees could result in more expensive premiums.

In the Spotlight

ACA Taxes and Fees

The Cost of Change (Video, 5:54)

The Affordable Care Act (ACA) will be in full swing by January 2014, but many people still have questions about the ACA. This video explores the ACA's effect on health insurance costs and coverage, plus your options for finding the right health insurance plan.

Download "The Cost of Change" Article (pdf)