The Affordable Care Act

In 2010, the federal government enacted the Patient Protection and Affordable Care Act, which aims to increase the number of Americans with insurance and cut the overall costs of health care. The Affordable Care Act puts in place strong consumer protections, provides new coverage options and gives individuals the tools needed to make informed choices about their health.  One of the primary components of the ACA is the introduction of Health Care Marketplaces.  California’s Health Care Marketplace is known as Covered California.

The first round of open enrollment for Covered California began on October 1st and continues through March 31st, 2014.  The provisions of the Affordable Care Act can be confusing, here are some key points impacting students and educators:

Covered California
California was the first state in the nation to enact legislation under the Affordable Care Act. Covered California™ was created to develop an organized marketplace where legal residents of California can buy health coverage that cannot be denied or canceled if you are sick or have pre-existing health conditions. Learn more at www.coveredca.com.

Open Enrollment and Coverage
The first round of open enrollment for Covered California began on October 1st and continues through March 31st, 2014. Coverage will begin no earlier than January 1st, 2014. It will take approximately 15 days for coverage to begin after completing the enrollment process. Plans must receive the initial payment prior to enacting coverage. If payment is not received by the given deadline, coverage will be cancelled and the enrollee will have to complete the application again (during open enrollment).

Eligibility
In 2013, Medi-Cal was expanded to include children with family incomes up to 250% FPL, Pregnant women with family income up to 185% FPL, and all other adults with incomes up to 133% FPL. Premium assistance for coverage through Covered California is available for family incomes up to 400% of FPL. The online calculator can assist you in calculating your eligibility and out of pocket expense.

Cost
The cost of coverage is determined by a number of factors including region, plan selection. For individuals eligible for premium assistance (most families with income up to 400% FPL), the biggest factor in determining the out of pocket cost to the individual is income. The below chart shows the expected percentage of family income one can expect to pay for coverage.

Federal Poverty LevelUp to 150%200%250%400%
Percent of Income4%6.3%8.059.5%
Maximum Monthly PortionUp to $57Up to $121Up to $193Up to $364

i. Premimum Assistance https://www.coveredca.com/shopandcompare/#premiumAssistance

Premium assistance is available for individuals and families who make less than a certain amount a year and who do not have other options for obtaining affordable health insurance that meets certain coverage requirements, such as health coverage offered through their employer or another government program.

The amount of premium assistance depends on an individual’s income, age and where the person lives. The Patient Protection and Affordable Care Act sets a monthly maximum that people will pay for health care, based on where their income falls in the federal poverty

level scale. In general, the less income someone makes, the less he or she will have to pay for health insurance and the more the federal government will help.

For example, individuals who make up to $45,960 and families of four that make up to $94,200 may qualify for financial assistance.

Here are some key facts about premium assistance:
  • Premium assistance reduces the cost of an individual’s or family’s health insurance plan premium.
  • Premium assistance (a federal subsidy) is applied directly to the premium at the time an individual or family enrolls in health insurance. Enrollees do not need to wait until they file a tax return at the end of the year.
  • Premium assistance is only available through Covered California. Californians must purchase their health insurance plan from Covered California if they want to get premium assistance.
  • Premium assistance is paid by the federal government directly to the health plan an individual or family chooses through Covered California.

ii.Cost Sharing https://www.coveredca.com/shopandcompare/#premiumAssistance

While premium assistance can help reduce premium payments, cost-sharing subsidies protect lower-income people from high out-of-pocket costs at the time of service. Those with incomes that are less than about $28,725 for a single person and less than about $58,875 for a family of four in 2013 may be eligible for those subsidies. Anyone who qualifies for cost-sharing subsidies will pay less for health care expenses, including costs incurred when they receive medical care.

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