What Adults Should Know About Health Reform
• Insurance plans can no longer place a dollar limit on the health care that is covered in a lifetime. Starting in 2014, there will be no dollar limits on the care that is covered in one year. Read more about restrictions on lifetime and annual limits.
• Starting in 2014, adults can no longer be denied health coverage because of a preexisting condition. Read more about coverage of preexisting conditions.
• Until 2014, there are options for those who are denied coverage in the private market, including the Minnesota Comprehensive Health Association, the Preexisting Condition Insurance Plan and Minnesota health care programs. Read more about alternatives when denied for coverage.
• In 2014, most Minnesotans will be required to have health coverage through their employer, a public program or a private insurance plan. Read more about the requirement to have health coverage.
• Starting in 2014, Medical Assistance will expand to cover more people, including individuals making up to 138 percent of the federal poverty level –about $15,000 per year in 2011. Read more about Medicaid expansion.
• Starting in 2014, individuals without employer coverage will be able to shop for and compare health insurance plans through the Minnesota Health Insurance Exchange. Depending on income, tax credits may be available to help pay for coverage. Read more about an Exchange.
- How do I find out if I’m eligible for Medicaid under the 2011 expansion?
Eligible individuals are adults without children who have incomes at or below 75 percent of the poverty level, about $677 a month or $8,124 a year for one person. People may apply through their local county office. Applications and information about applying can be found by clicking on How to apply in the left column.
- When will more Minnesotans get affordable care or Medicaid through health reform?
Beginning in 2014, health reform expands Medicaid to Minnesotans up to 138 percent of the poverty level (about $30,000 for a family of four in 2011). An Exchange can also offer subsidies to purchase private insurance for Minnesotans who earn up to 400% of federal poverty (about $89,500 for a family of four in 2011).
- When are the subsidies available?
Subsidies will be available for eligible individuals and families purchasing health insurance through the Minnesota Health Insurance Exchange starting in January 2014.
- Am I eligible for the subsidies?
U.S. citizens and legal immigrants who purchase coverage through the Minnesota Health Insurance Exchange and who earn between 138 and 400 percent of the federal poverty level (FPL) will be eligible to receive a tax credit. Those who purchase coverage through an Exchange and earn up to 250 percent of FPL will be eligible to also receive cost-sharing subsidy to reduce copayments and deductibles.
- What will my tax credit amount be?
The tax credit amount will vary based on an individual’s income and the premium of health insurance plans offered through an Exchange. The amount of the credit will roughly be the difference between the premium and what an individual is expected to contribute towards a health insurance premium (see chart below).
Expected Contribution Toward Premium as a Percent of Income
Up to 133 % of FPL
2 % of income
133 – 150 % of FPL
3 – 4 % of income
150 – 200 % of FPL
4 – 6.3 % of income
200 – 250 % of FPL
6.3 – 8.05 % of income
250 – 300 % of FPL
8.05 – 9.5 % of income
9.5 % of income
- How will I receive my subsidies?
Tax credits will be advanceable, which means you receive a credit at the time you purchase your plan through an Exchange. For individuals and families who have low incomes and pay little or no federal income tax, tax credits will be refundable so that they can still get help paying their premiums.
- What if I receive insurance from my employer, but still need help affording coverage? Can I qualify for a tax credit?
If Minnesotans meet certain criteria for unaffordable employer-sponsored coverage, they will be eligible to enroll in health insurance through an Exchange, and may be eligible for a tax credit depending on their income. These criteria include a person’s share of their employer-sponsored insurance premium that exceeds 9.5 percent of their income.
- I have been denied coverage because I have a preexisting condition. What will health reform do for me?
In the meantime, a temporary federal high-risk pool program has been set up in every state, including Minnesota. This temporary federal pool is known as the Preexisting Condition Insurance Plan (PCIP) and provides coverage to U.S. citizens and legal residents with preexisting conditions who have been uninsured for at least six months. Benefit plans offered by the PCIP provide coverage without a preexisting condition exclusion.
The PCIP is operating in addition to our state high-risk pool, the Minnesota Comprehensive Health Association (MCHA). The eligibility requirements for the two pools differ. If you do not qualify for the PCIP plan, MCHA may be an option. MCHA’s website provides information about eligibility requirements for MCHA, how to qualify for a waiver of MCHA's preexisting condition exclusion, etc.
- Will preventive services be covered under my health plan?
If you are enrolled in employer health coverage or a health insurance plan that was created after March 23, 2010, preventive services are covered at no cost to you. In 2014, all plans will cover preventive services, including those purchased on the Minnesota exchanges. Please note that the health plan is only required to cover preventive services at 100 percent if you are using an approved, in-network provider. Also, if the preventive service is not the primary reason for your doctor’s visit, you may be charged some of the cost of the visit. If you have questions, it’s always best to check with your employer or insurance carrier directly to confirm.
- What services are considered “preventive services”?
Depending on your age and health plan, you may receive the following preventive services at no cost to you. For a full list of preventive services, visit healthcare.gov.
• Blood pressure, cholesterol and diabetes screenings
• Cancer screenings, including mammograms and colonoscopies
• Counseling on such topics as quitting smoking, losing weight, eating healthfully, treating depression and reducing alcohol use
• Routine vaccinations against diseases such as measles, hepatitis or meningitis
• Flu and pneumonia shots
• Counseling, screening, and vaccines to ensure healthy pregnancies
• Regular well-baby and well-child visits, from birth to age 21
- What is an Exchange?
A Health Insurance Exchange is a marketplace for individuals and businesses to compare, choose, and buy affordable health insurance for high quality care. An Exchange can make health care easier to navigate for consumers and small businesses. It can allow Minnesotans to easily compare health insurance options based on cost, quality, and consumer satisfaction. It can also foster fair and equitable competition to encourage insurers and health care providers to place a greater focus on value and affordability.
An Exchange is an online marketplace where Minnesotans can purchase private health insurance or enroll in public programs like Medical Assistance and the Children's Health Insurance Program (CHIP). Subsidies and tax credits will be available to eligible individuals and small businesses to make coverage more affordable.
An Exchange can help small businesses provide affordable coverage choices to their workers and allow employees to choose the plan that is best for them and their families. Employees will be able to use contributions from one or more employers to purchase coverage for them and their families and keep that coverage if they become self-employed, lose their job, or if they change jobs. An Exchange can also simplify the administration of health insurance for small businesses and allow them to focus on growing their business instead of managing health insurance.
- When would an Exchange be effective?
Coverage through an Exchange would start effective Jan. 1, 2014. States have until Jan. 1, 2013, to create their own health insurance exchanges or the federal government will establish one for a state.
- What functions would an exchange perform?
An Exchange would perform a number of functions, including:
• Operating a toll-free hotline and website for providing information
• Ensuring that health insurance plans meet certain standards (for example, related to marketing, access to health care providers, and reporting on quality of care)
• Providing information in a standard format to help consumers compare insurance companies and benefit plans
• Determining eligibility for individual premium tax credits, cost-sharing assistance, and coverage requirement exemptions
• Determining eligibility for Medical Assistance
• Determining eligibility for small business premium tax credits
• Providing real-time enrollment in health benefit plans
• Making an electronic calculator available to display the cost of coverage
• Communicating with employers regarding employee tax credit eligibility, cancellation of coverage, etc.
• Establishing a Navigator program that connects Minnesotans with an individual or organization who assists consumers and businesses to navigate an Exchange
- Who would be eligible to use an Exchange?
An Exchange would be available to be used by individual consumers and small businesses with up to 100 employees when it opens for enrollment effective Jan. 1, 2014. Minnesota may limit small business eligibility to those with less than 50 employees prior to 2016, but this decision has not yet been made. Large employers may be allowed to participate in 2017.
- Where is Minnesota in the process to plan for a Health Insurance Exchange?
The state is working with all stakeholders to plan and develop a Minnesota exchange. Minnesota received a $1 million planning grant in February 2011. This grant funded actuarial and economic research on the market impact of an Exchange, the development of an IT Infrastructure, Request for Proposals for prototypes to evaluate technical options and costs for an Exchange, and initial work to assess the operations of an Exchange.
Minnesota received a $4.2 million grant in August 2011 to support the design and development of a Minnesota Exchange. The grant funds the creation of an initial structure with human and other resources to support the design and development of an Exchange, development of technical infrastructure, and stakeholder engagement to help craft the design of an Exchange through an Advisory Task Force and other public forums.
- Does the health reform require me to purchase coverage?
Effective Jan. 1, 2014, all U.S. citizens and legal residents will be required to obtain health insurance coverage.
- What happens if I do not buy coverage?
Those who do not obtain coverage will pay a tax penalty beginning in 2014. The penalty is set to increase each year as follows:
In 2014, it will be the greater of $95 per adult or 1 percent of taxable income.
In 2015, it will be the greater of $325 per adult or 2 percent of taxable income.
In 2016, it will be the greater of $695 per adult or 2.5 percent of taxable income.
After 2016, the tax penalty increases annually based on a cost-of-living adjustment.
A person will only pay one-twelfth of the total annual penalty for each month without coverage. The penalty for a child is half that of an adult. A maximum penalty will be calculated based on premiums for plans offered through an Exchange.
- Will there be any exceptions?
Yes. The law provides exceptions for:
1) Individuals and families below a certain income
2) People who cannot afford the coverage that is available
3) Individuals who have been uninsured for less than three months
4) Members of American Indian tribes and
5) People who do not obtain coverage because of religious objection.
- Why does health reform require people to have health insurance coverage?
The requirement for individuals to have health insurance coverage was part of the overall health reform package that provides subsidies to make coverage more affordable. This provision requires insurers to cover everyone, regardless of health status or history. Without the requirement to have health coverage, people with health problems are more likely to get health insurance while others would forgo insurance until they develop a health condition.
If healthy people don’t buy coverage, there would be only a small number of very expensive coverage choices available. The requirement to buy health coverage makes sure that people don’t wait until they have a health problem to purchase insurance. This brings healthy people into the pool, creates a larger pool of both sick and healthy individuals, and keeps average costs down.
- Alternatives if Turned Down for Coverage
- Insurance Rates
- Lifetime and Annual Limits
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Links to frequently asked questions on all topics.