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Health Insurance & Affordable Care Act

What’s Ahead for the Affordable Care Act in 2013?

Employer Communication continued...

“The majority of people can ignore this as background noise. For those with employer-sponsored insurance it won’t matter,” says Sabrina Corlette, research professor and project director at the Health Policy Institute at Georgetown University.

Still, expect to hear from your company about all the upcoming changes.

Employers are required by federal law to send workers a notice telling them about the new insurance marketplaces before Oct. 1, 2013. Even earlier than that, companies will be eager to help employees understand the differences between the health insurance coverage they provide and what will be available through the marketplaces. 

“There’s likely to be confusion, particularly for those with coverage through their employer today,” says Mike Thompson, health care consultant with PricewaterhouseCoopers.

One of the biggest concerns is that during this fall’s advertising blitz many people will wrongly assume they can lower their costs by dropping their employer’s benefits to buy a health plan on the marketplace, where tax credits will be available. But you won’t be eligible for tax credits unless your company’s health insurance plan costs more than 9.5% of your annual income.

“That’s clearly one place where people could make a potentially bad decision,” says Sandy Ageloff, senior consultant with Towers Watson. “It’s critical for individuals, particularly for those with employer coverage, to really pay attention to the messaging coming from employers, and to take the time to understand the law.”

Expanding Medicaid: Help Paying for Insurance

Will your state be expanding its Medicaid program to cover more people? This is a development to watch between now and the summer.

Last summer, the Supreme Court ruled that states can choose not to expand their Medicaid programs to cover more low-income people.

As a result, 25 states have declined or not yet decided whether to accept federal funds that would allow them to cover people earning up to 138% of the poverty level, or about $15,400 a year for an individual. That could place a large number of people in need of Medicaid coverage out in the cold. In Texas, for example, it’s estimated that 1.5 million uninsured people would lose on out coverage if Gov. Rick Perry doesn’t decide to expand Medicaid for Texans.

Because the federal government pays for 100% of states’ expansion for the first three years starting in 2014 and gradually lowering that to 90%, it’s widely believed that the deal is too good for governors to pass up. Many are facing intense pressure from hospitals and other businesses within their states that have much to gain from the expansion.

“All that I’ve heard publicly from Health and Human Services is that we assume eventually all states will expand,” Corlette says.

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