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AARP Webinar Q-and-A: What You Need to Know About the New Health Care Law

The following questions are among those asked during AARP’s webinar series about the new health care law.

Participants were especially curious about the new law and coverage for young adults, insurance for people with pre-existing conditions, help for the uninsured and those paying high premiums for COBRA, and about a new, long-term care insurance program called CLASS.

For Medicare-related questions asked during the webinars, see AARP Webinar Q-and-A: What the New Health Care Law Means for People With Medicare. For more information about the new, "high-risk pools" for people with pre-existing conditions, see AARP Webinar Q-and-A: Temporary Insurance for People With Pre-existing Conditions.

The Law and Pre-existing Conditions

Q: When will insurance plans be required to cover people with pre-existing conditions?

A: As of Sept. 23, 2010, insurance companies can’t refuse to sell insurance to children with pre-existing condition. In 2014, all insurance plans will be required to provide coverage to adults with pre-existing conditions.  

Q: What is the Pre-Existing Condition Insurance Plan?

A: The Pre-Existing Condition Insurance Plan (PCIP) was created as part of the nation's new health insurance law, the Affordable Care Act. The PCIP program was designed to make health insurance available to you if you’ve been denied coverage by private insurance companies because of a pre-existing condition. PCIP provides a new health coverage option if you are a U.S. citizen (or are otherwise residing here legally) and have been uninsured for at least six months, have a pre-existing condition or have been denied health coverage because of your health condition. PCIP is a transitional program until 2014.

Q: Who is eligible for coverage through PCIP?


A: Eligible individuals must:

  • Be a U.S. citizen or a legal resident
  • Have a pre-existing medical condition
  • Have not have been covered under creditable health coverage — as defined by Section 201(c)(1) of the Public Health Service Act — for the previous six months before applying for coverage. Persons currently covered by a health plan, including employer plans, COBRA, Tricare, Medicare, Medicaid and existing high-risk pool programs, are not eligible for PCIP.

 

Q: Is PCIP available now or in 2014?

A: PCIP is available in most states now.

Q: How do I find out about pre-existing conditions and what they are?

A: A wide variety of health conditions have been used by insurance companies as reasons to deny coverage. Different states may use different methods of determining whether you have a pre-existing condition and whether you have been denied insurance coverage. If you live in a state that guarantees insurance coverage, the state may consider you to have been denied coverage if you were offered coverage at an unreasonable price. Go to HealthCare.gov to learn more about the eligibility requirements in your state.  
 
Q: The temporary PCIP will be awarded on a "first come, first served" basis. What does that mean?

A: Congress appropriated $5 billion to fund the temporary PCIP through December 2013. About 5 million to 7 million Americans are estimated to lack health insurance and have a pre-existing condition. While only a fraction of those who need coverage are expected to enroll in the program, there’s a range of estimates about how large that fraction will be. Therefore, the federal funding allotted for the new program may not be enough to help all individuals who are eligible to receive temporary insurance coverage. But those individuals who do get temporary coverage through PCIP in their state will be able to keep their coverage (as long as they pay their premiums) until 2014, which is when everyone with a pre-existing condition will be able to access coverage through state-based insurance exchanges.

Q: Please clarify what's meant by the term "exchanges."

A: An insurance exchange will be a way for people to buy coverage from private insurance companies at more affordable group rates. All health insurance plans in the exchanges must offer a standard set of comprehensive benefits, including medical, mental health, prescription drug and rehabilitative services. When these plans become available through the exchanges in 2014, you will be able to pick among several levels of coverage to best fit your needs. The standard benefit levels will make it easy to compare benefits and costs. Depending on your income, you will get subsidies or tax credits to help you pay your premiums for the insurance you purchase through an exchange.  

Q: Does a catastrophic health insurance policy count when you are applying for insurance with a pre-existing condition, or do you have to give that policy up for six months to apply for PCIP plans?

A: Generally, you are not eligible for a PCIP if you have health coverage because you must be uninsured for at least six months. A variety of health conditions, however, have been used by insurance companies as reasons to deny coverage. Different states may use different methods of determining whether you have a pre-existing condition and whether you have been denied insurance coverage. If you live in a state that guarantees insurance coverage, the state may consider you to have been denied coverage if you were offered coverage at an unreasonable price. Go to HealthCare.gov to learn more about the eligibility requirements in your state.  
 
Q:  Where can people go to learn more about PCIP in their state?

A: Go to HealthCare.gov to find details about this new coverage.

The Law and Consumer-Friendlier Rules

 
Q: Do the new lifetime and annual limits portions of the law apply to existing insurance plans or only new plans?

A: Starting in 2010, insurance companies can’t place lifetime limits on your health coverage. They are also restricted from using arbitrary annual limits. Check with your insurance company on the date these provisions go into effect for your policy. By 2014, insurers will not be able to put any annual limits on their coverage.  

The Law and Preventive Care


Q: If you have insurance and don’t plan to join a new plan, do the new coverage benefits for preventive care apply?

A: With most insurance plans, you have the option to renew your coverage or change your benefits each fall during open enrollment. Even if you have not changed insurance plans, you have a "new" insurance policy for the following year. In those new policies insurance companies will not be able to charge you out-of-pocket costs for preventive care such as mammograms, immunizations and screenings for cancer or diabetes.  

The Law and Coverage for Young Adults


Q: I have not been able to cover my child through my employer-based insurance policy since he turned 23. Will my insurance company notify me that he is now eligible to be included in my insurance?


A: Your insurer and employer may or may not inform you of this new benefit. It’s best to contact them directly about adding your adult child to your policy.
 
Q: Can adult children under age 26 be covered if they no longer live with you?  

A: Yes. Your adult child does not need to live with you, or even be your tax dependent, to be covered by your health plan.

Q: Can I add my grandchildren to my non-Medicare health insurance coverage?

A: If you are their legal guardian, you might be able to add them to your family policy. Otherwise, you likely cannot add them to your health insurance policy. Check with your employer or your insurance company about adding your grandchildren to your policy. 

Q: I get my health coverage through a retiree health plan. Can children up to age 26 be added to these types of plans?   

A: The provision for retiree health plans extending coverage for children until age 26 falls under a different law called ERISA (Employee Retirement Income Security Act). The amendments resulting from the new health care law do not override this ERISA provision. As a result, retiree-only plans are not required to make changes that apply to other employer group health plans, including allowing coverage of children up to age 26. But if retirees are included in a plan with active employees that offers family coverage, then the provision to extend coverage to children up to age 26 does apply. Check with your employer or your insurance company to see if this exception might apply with your plan.

Q: If my adult child is in college and is offered student health coverage at school, can I still add him or her to my family coverage through my job?

A: Between Sept. 23, 2010, and Jan. 1, 2014, qualified group plans that offer family coverage have to extend coverage to adult children under age 26, unless the adult child is eligible to enroll in "eligible employer-sponsored coverage." So, no, a student health plan would not prevent you from adding your adult child to your employee policy.   

Q: If children under 27 refuse to buy health insurance, does the parent then become obligated to add them to their policy under the new health care law? Who would receive the fine if neither wants to pay for coverage? I don't feel that a married child should be my responsibility. I think the new law is too generous in requiring children to be covered to such an age!

A: The new law does not require parents to add their young adult children to their family health care coverage. The new health care law makes that an option if a family wishes to add their adult child, up to age 26, to their family plan. If in 2014 your adult child does not have health coverage and is eligible to purchase insurance through an exchange and does not do so, then he or she will have to pay a penalty, not you.

The Law, the Uninsured and COBRA

Q: I currently have coverage through my former employer under COBRA. My COBRA benefits will run out in a few months. I realize that the health insurance exchanges do not start until 2014.  Where can I go to find out more about other options for coverage?

A: Your State Health Insurance Assistance Program (or SHIP) can direct you to other options for coverage in your state. Visit SHIPtalk.org to find the SHIP in your state.
 
Q: My COBRA coverage expired in October 2010 and I am unemployed with pre-existing health issues. Do I have to be uninsured for six months to qualify for the federal plan? My only other option is South Carolina’s state high-risk pool, which is too expensive.

A: Yes, to qualify for PCIP, you need to be without health insurance for at least six months. Check with your State Health Insurance Assistance Program (SHIP) to see if you have any other coverage options.
 
Q: I have recently become unemployed and am considering COBRA insurance. I’ve heard that government subsidies for this will no longer exist. I’m sure I would be considered a high-risk individual due to my health status. Is the new PCIP something I would be eligible for?

A: Generally, you are not eligible for PCIP if you have health coverage because you must be uninsured for at least six months. Go to HealthCare.gov to find details on this new coverage and how it relates to situations in which people who have not been uninsured for at least six months have a pre-existing condition. Go to HealthCare.gov for information about COBRA coverage.

Q: I understand that state insurance exchanges will offer coverage for the uninsured in 2014. But what about those of us who need insurance now?

A: To learn about your current options for insurance, contact your State Health Insurance Assistance Program. SHIP counselors can answer your question about obtaining insurance in your state. You can find your area SHIP office at SHIPtalk.org.
 
Q: I heard that low-income people will get some help with their insurance premiums. Is that true? I can no longer afford my premiums, which just increased $80 per month after my income dropped drastically.

A: Such help will begin in 2014, when the insurance exchanges begin offering coverage. At that time, if you earn less than about $43,000 a year you will get tax credits or subsidies to help you pay your premiums for insurance you purchase through an exchange.

Q: What are the choices for my present situation? I’m 55 years old and have partial, casual employment. I have no insurance, or pre-existing conditions. How can I get insurance at a reasonable rate now, or in the near future, under the new health care law?

A: To learn about your current options for insurance, contact your State Health Insurance Assistance Program. SHIP counselors can answer your question about obtaining insurance in your state. You can find your area SHIP office at SHIPtalk.org.
 
Q: I am unemployed and had COBRA, which just ran out. I applied for private insurance but was denied due to pre-existing conditions. My 19-year-old son was also denied coverage. Both of us are currently uninsured. What are our options for obtaining insurance coverage?  

A: If you have a pre-existing condition and have been uninsured for at least six months, you may be eligible for the PCIP in your state. To learn about your current options for insurance, contact your State Health Insurance Assistance Program. You can find your area SHIP office at SHIPtalk.org.
 
Q: I’ve recently retired due to medical conditions. I signed up for COBRA coverage beginning in September but have been told this coverage will only last for 12 months. What options will I have after this?

A: Your State Health Insurance Assistance Program (or SHIP) can direct you to options for coverage in your state. To find the SHIP in your state, visit SHIPtalk.org.

Q: Where can I buy health insurance before 2014?

A: Your State Health Insurance Assistance Program (or SHIP) can direct you to options for coverage in your state. To find the SHIP in your state, visit SHIPtalk.org. Another way to find out what coverage you and your family might be eligible for is to go to HealthCare.gov. This new website can help you find information about programs that are available in your area. To find out more about insurance companies licensed to sell products in your state, the best place to go is to your state insurance department. You can find contact information in the blue (government) pages of your phone book. You can also go to NAIC.org to find the phone numbers and website for your state insurance department.
 
Q: I have a 33-year-old son with no job and no insurance. Will the new law help him get some free insurance if he is not working?

A: The new law greatly expands who will be eligible for Medicaid. An adult without children who has less than about $15,000 in income will be able to apply for Medicaid starting in 2014.
 
Q: Currently (meaning now, not 2014), what is the income limit to be eligible for Medicaid? I already have Medicaid (Medi-Cal in California). Am I still eligible if I make under $15,000 annually? By the way, I am disabled.

A: Whether you will continue to be eligible for Medi-Cal will depend on the California program. States will be given more federal assistance to expand Medicaid coverage to more individuals starting in 2014. You’ll need to check with your local Medi-Cal office about the current income eligibility requirements.  

Q: Will there be major changes to insurance conversion rules when the new health care law is implemented?


A: The on-again and off-again extensions of the COBRA insurance conversion provisions have been considered in separate legislation. Once the state-based exchanges are up and running by 2014, people who lose their health care coverage should be able to shop in the exchanges to get affordable insurance.

The Law and Taxes

Q: What are the income tax implications of the new health care law? I've heard that all premiums paid on my behalf will be added to my taxable income. Is that true?

A: The most noticeable tax change for the vast majority of Americans under the new health care law will be on your W-2 form. The law requires your employer to disclose the cost of health insurance benefits provided to you beginning in 2011. This new reporting requirement will not affect the taxes you pay, however. The value of health insurance benefits reported on your W-2 should not be included in your income when you file your taxes. You will not have to pay any FICA taxes on this amount.
 
Q: I currently buy my own health insurance. Will I get a tax credit for the premiums I pay this year?

A: Starting in 2014, if you earn less than about $58,000 for a couple, or about $43,000 for an individual, you will get tax credits to help you pay your premiums for health insurance purchased through an exchange. (Higher income levels apply in Alaska and Hawaii.)
 
Q: In 2014, will there be subsidies for people to get insurance in addition to or instead of a tax credit? For example, what would be done for a couple with four children and an annual income of less than $60,000?

A: The new health care law will have limits on annual out-of-pocket costs — deductibles and co-payments — of insurance purchased through an exchange for single people and families with moderate incomes. For example, a family of four earning $60,000 would spend no more than $11,900 out-of-pocket for health care in a year.  

The Law and Small Businesses

Q: As a small-business owner, are there tax credits I can benefit from now if I provide health care coverage for my employees?

A: Yes, the small-business tax credits are retroactive to Jan. 1, 2010. The amount of the tax credit depends on how many employees you have and their average wage. To learn more about the guidelines for the small-business tax credit, visit IRS.gov.
 
Q: My company experiences high premiums because we are a small business with less than 15 employees. Will the new health care law provide a solution to this problem?

A: Businesses with up to 100 employees may be able to buy health insurance for their employees through state-based exchanges starting in 2014. Some states will offer insurance plans tailored to meet the needs of small businesses. The exchange plans will be called the Small Business Health Options Program (SHOP).

Currently, tax credits are available to businesses with 10 to 25 employees and average annual wages between $25,000 and $50,000, retroactive to Jan. 1, 2010. The amount of the credit will be based on the number of employees and their wages. To learn more about the guidelines for the small-business tax credit, visit IRS.gov.  
 
The Law and Long-Term Care
 
Q: I've heard that there will be a new national long-term care program. Is this true? Do you have any information it?  

A: You're talking about CLASS (Community Living Assistance Services and Supports). This new, voluntary national insurance program provides you with a cash benefit to help pay for long-term care services and supports. You will likely be able to enroll in CLASS starting in 2012 or 2013.
 
Q: I have long-term disability insurance with my employer that I pay for. Will CLASS replace this kind of coverage?

A: No, CLASS provides different benefits than disability insurance. Disability insurance provides a source of some income if you must stop working because you become disabled. The CLASS insurance provides you with a cash benefit to help you pay for nonmedical services and supports, such as home modification, assistive technology, transportation and personal care. For you to access the funds, a health care provider must certify that you have a qualifying disability that is expected to last more than 90 days.

Q: Can you be self-employed and enroll in the CLASS program?

A: Yes, people who are self-employed will be able to purchase CLASS insurance.
 
Q: Will CLASS have age restrictions for when you are enrolled?


A: As long as you are working, you can enroll at any age. In fact, the younger you are when you start, the lower your premiums will be.

Q: What if I’m retired when the CLASS act comes into effect and I’m not working? How can I join a long-term care plan?

A: You have to be employed to start participating in the new CLASS insurance. You must work, even as a self-employed person, and pay premiums for three of the first five years you participate. But your employment can be part time, so long as you earn about $1,000 each year.
 
Q: If I get CLASS benefits, what health care services can I receive in my own home? Also, must you be over 65 to access the benefits?

A: You can be any age to receive CLASS benefits, so long as you have paid your premiums for at least five years, worked for at least three of the initial five years you are enrolled, have a qualifying disability and meet other eligibility requirements. You can use your CLASS benefits to help pay for nonmedical services and supports you need to help you stay independent in your home. This could include home modification, assistive technology, transportation and personal care. You can also use CLASS funds toward the costs of assisted living or nursing home care.
 
Q: Do I ask my employer about CLASS?

A: Yes, when the CLASS program launches, you will want to talk with your employer about enrolling. CLASS insurance enrollment is expected to begin at the end of 2012 or beginning of 2013. Even if your employer does not offer CLASS, you will be able to enroll.
 
Q: Do we know how much CLASS long-term care insurance will cost?

A: The premiums for the CLASS insurance have not yet been announced.

Q: Can you participate in CLASS if you already have your own long-term policy?

A: Yes, you can still participate in the CLASS program if you have your own long-term care insurance coverage.
 
Q: If you start contributing to CLASS at a young age, does your cash benefit payout increase over time?

A: No, the cash benefit for CLASS will be a fixed amount. The benefit of starting younger is that your premiums will be lower.
 
Q: What if you've had a long-term care policy since you were in your 30s and were employed, but you're now 60 and haven't worked for six years. How do you know if this policy you've paid premiums on for over 25 years meets the new criteria?

A: You can still participate in the CLASS program if you have your own long-term care insurance coverage. CLASS provides different benefits and has different requirements than private long-term care insurance. The requirement that you need to have paid into the CLASS program for at least five years, and worked at least three of the initial five years you are enrolled, applies to the CLASS program and does not affect any other long-term care policy you may have. 

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