How The Affordable Care Act Can Help Freelancers
The major provisions of the Affordable Care Act take effect January 2014, and Freelancers are poised to benefit considerably from it.
Let's face it: it's not easy getting healthcare on your own, especially when you have to pay full price for it. Freelance professionals work as hard as anyone with a salaried job, but they don't get the added buffer of group-rate healthcare.
It's a no-brainer that this doesn't make sense, and yet it has taken the government a long time to start doing something about it.
So what is the Affordable Care Act and how will it help? That question, along with a few others, is what we'll endeavor to answer in easy to understand terms.
Introduction to Affordable Care
The Affordable Care Act was formulated by the Obama administration and passed into law in 2010. Although much of the act's provisions have yet to be implemented, the structure of the Act, and the specifics of regulating it are already in place.
The ACA is built on the concept of an entirely new healthcare system. That means new regulations, requirements, and considerations for healthcare providers, health plans, consumers, and employers.
Instead of offering insurance strictly through the open market, the government has created an alternative option: the online marketplace. These state-specific sites will offer insurance plans and providers, in accordance with the regulations of the Affordable Care Act that are common to all states and all providers.
These regulations include an individual mandate to obtain insurance through a regional marketplace, if you do not have employer-provided insurance, or insurance through dependency or marriage.
Medicaid is included in the list of insurance plans offered in the marketplaces, which means that individuals who cannot afford insurance are nevertheless required to comply with the mandate.
That is, of course, unless you want to pay a fee of $95 for the year. The fine is small now, but it will more than double by 2015, and increase still in 2016, when it will be tied to rate of inflation.
Providers are also subject to regulations, all of which will be of great benefit to the consumer. Pre-existing conditions have long been an excuse for insurance companies to deny coverage and save money and time, at the expense of the individual.
Under the ACA, however, providers are required to offer insurance to individuals regardless of pre-existing conditions, such as diabetes or arthritis. Providers will also be required to provide plan holders with a list of health services that might otherwise be denied. All of this is good news for the consumer, especially the underinsured or uninsured, who know all too well the consequences of irresponsible insurance policies.
Essential Benefits In Detail
Providers are required to offer the following services to consumers, among others:
Ambulatory and Emergency Services, Wellness Services, Rx, Substance Abuse Services, Inpatient Treatment Services, Rehabilitation Services, Lab Services, Maternity and Newborn Care, Pediatric Care, Oral and Vision Care, as well as services related to Chronic Illnesses.
This list is a big victory for those of us who have been forced to pay unsightly expenses for simple procedures, such as blood tests and eye exams.
Keep in mind: you will be covered for these and other mandatory services, no matter which provider you choose.
Breakdown of Plans and Plan Cost
How exactly do you purchase insurance under the Affordable Care Act?
Plans are offered to consumers on four levels, ranging from bronze to platinum. The cost of each plan and level is capped at a reasonable percentage of annual income in relation to the Federal Poverty Line, where the income range is 138-400% above the FPL.
Individuals who fall below this range will be eligible to apply for Medicaid.
So how much do you pay?
The cost of your premiums is determined on a sliding scale, based on your income. So if you make less, you pay less and vice versa. The maximum that anyone in the 138% to 400% range can pay is 9.5% of their annual income towards health insurance.
Tax Credit Availability
Capped premium costs are a good way to ensure that you don't pay too much, but what about saving money?
The ACA anticipated this concern, as well as the concern of premium costs in general. To combat it, they've included tax credits for consumers under the age of 65, who fall within the above income range.
You may be eligible for a number of subsidies based on your income, number of dependents, and marital status.
Medicaid may not the first thing you think about when you think about healthcare, but many of us are left with no other option.
Medicaid provides insurance to millions of Americans at little to no cost. These individuals cannot afford insurance, and their eligibility for government-sponsored care is generally determined by income.
If you make less than 100% above the FPL, you may be eligible. Traditionally, Medicaid is only offered to married individuals or those with dependents. But the ACA has proposed an optional expansion to the plan that widens the eligibility requirements to include single, childless adults, and raise the minimum income requirement by 38%.
This expansion is exciting news for many Americans who are struggling but have not been able to receive Medicaid. Although states are not required to implement the expansion, nearly 25 of the 50 states are leaning toward expanding the program.
A handful of states, including New York and New Jersey, have already begun the process.
What Reform Means For The Future
The Affordable Care Act is not perfect, and there will likely be problems getting the program off the ground. But as we know, great ideas don't have to be perfect to have an impact.
Freelancers are used to fending for themselves, but they also have a right to adequate care, especially when they've worked so hard to get it.
About the author
Michael Cahill is the Editor of the Vista Health Solutions Blog. He writes about the health care system, health insurance industry and the Affordable Care Act. For more information about the ACA may affect freelancers and other options for health insurance, visit the Vista Health Solutions self employed health insurance guide. Follow him on Twitter at @VistaHealth
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