New Year's Day ushers in some of the most significant changes in health care imposed by the Affordable Care Act (ACA), which President Obama signed into law on March 23, 2010. In each year since then, portions of the law have taken effect. The changes for 2014 include a host of new consumer protections, as well as the requirement that nearly every American have health insurance or face a tax penalty.
Some of the biggest changes taking effect starting Jan. 1, 2014:
- Pre-Existing Condition Protections: It's now illegal for insurance companies to deny anyone coverage for a preexisting medical condition or to charge them more for it.
- Gender Protection: Health insurance companies can no longer charge women more for their policies than they charge men.
- 10 Essential Health Benefits: All insurance plans must provide this standard package of coverage that includes hospitalization, emergency services, prescription drugs, mental health and substance abuse services, rehabilitative services and maternity care.
- Annual Limits: The law now prohibits annual limits on how much insurers will pay for "essential" benefits in insurance plans, including job-based policies. The ban does not apply to so-called "grandfathered" policies, which are plans that were in place before the ACA became law. Lifetime limits on most benefits have already been banned for policies issued since the law took effect.
- Premium Assistance: This help comes in the form of a tax subsidy. The subsidy can be taken either upfront as a premium discount, or at tax time. You choose. Premium assistance is available to Americans who make up to four times the poverty level - or about $46,000 for an individual and about $94,000 for a family of four. To get this help in California, you must buy an insurance plan through Covered California.
- Cost-Sharing Subsidies: This is additional financial relief that reduces co-payments and deductibles for eligible Americans who make up to two-and-a-half times the federal poverty level. That's about $29,000 for an individual and about $59,000 for a family of four. Like premium assistance, the cost-sharing subsidies are only available to Californians who purchase a plan through Covered California. What's more, it's only offered with the "silver" category of policies.
- Expanded Medi-Cal: California is among the 26 states and D.C. that opted to expand Medicaid, which in California is called Medi-Cal. About 1 million Californians will be newly eligible. These are individuals who earn up to $15,850; the limit for a family of four is $32,500. The expansion will also include childless adults, who until now were ineligible for Medi-Cal. Those who are eligible for Medi-Cal are not eligible for tax credits through Covered California.
- Individual Mandate: Most Americans (excluding those eligible for an exemption) must have health insurance or pay a tax penalty. (The Obama administration added another exemption in December 2013 when it ruled that people who had their individual policies cancelled and were having trouble affording an ACA-compliant policy can qualify for a "temporary" exemption.) Those who go without insurance are subject to a graduated tax penalty: for 2014, it's $95 per adult and $47.50 per child (up to $285 for a family) or 1 percent of family income, whichever is greater; for 2015, it's $325 per adult and $126.50 per child (up to $975 for a family) or 2 percent of family income, whichever is greater; for 2016 and beyond, it's $695 per adult and up to $347.50 per child (up to $2,085 for a family) or 2.5 percent of family income, whichever is greater.