12.22.09

How Would Health Care Affect You?

Say health-care reform is signed into law. Once the major provisions are in place, by 2015, the health-care system will change significantly. Benjamin Sarlin on the new world order.

It's the year 2015 and the health-care bill passed by the Senate and signed by the president in 2010 is up and running. How will you be affected? The Daily Beast dreamed up a few situations to illustrate some of the changes to the health-care system.

Julie, 35, Huntsville, AL

Julie and her husband Dan have two children; they’re making ends meet with a two-person SAT tutoring business. Because they're self-employed, however, they have a tough time finding insurance. Under the new heath care law, they receive subsidies to buy a plan in the health care exchange. Since the two make about $60,000 a year, or 250 percent of the federal poverty line for a family of four, they would be expected to pay an annual premium of about $5,800—a substantial savings over the $12,000 they’d be paying if the bill had not passed.

Geoff, 24, New Salem, ND

Geoff is a recent college graduate of the University of North Dakota, living with his parents. Currently he is working a series of part-time jobs and internships, which bring in a decent income but do not offer health care coverage. In the past, Geoff might not have thought much about of his lack of insurance since he's young, healthy, and has no children to take care of. But because of the new individual mandate implemented under health care reform he's required to have insurance or pay a fine. Thanks to the passage of health care legislation back in 2010, however, he is covered under his parents’ family plan until he is 26, taking care of that problem. Previously under North Dakota law, insurance carriers were only required to cover him as a dependent up to age 22.

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The Furies of Health Care
Margaret, 61, Philadelphia, PA

After a long career in finance, Margaret has been laid off from her bank job during a tough recession. Local firms are showing little interest in taking on an employee her age, with her salary requirements. So she's working part-time at a local bookstore to bring in some extra income until retirement. Her COBRA benefits have run out, leaving her without coverage. If Margaret can make it to 65, she'll be eligible for Medicare, but in the meantime getting health insurance is crucial, since she is a cancer survivor. Under the previous system, she would have faced tremendous difficulty finding coverage, since insurers would likely have either denied her application based on her age and health history or at least put her on the maximum 12-month waiting period in her state before offering an expensive, or even totally unaffordable, plan. Under the 2010 bill signed by President Obama, however, Margaret's prospects are better. She can now choose among competing plans in a new health insurance exchange that she can access online. The plans on the exchange cannot discriminate based on a pre-existing condition and they are restricted to charging older customers a maximum of only 200% more than younger ones. In addition, if Margaret's income is less than 400% of the poverty rate she is eligible for subsidies from the federal government to help her afford insurance.

Greg, 40, Schenectady, NY

Greg, his wife, and their son all get insurance through his manager job at the local coffee chain, Bob's Beans. Unfortunately, the insurance has been substandard; they've frequently found themselves arguing over claims and their out-of-pocket costs are higher than they'd like. But it's the only coverage offered by his employer. Thanks to an amendment added by Ron Wyden (D-OR) to the health care bill back in 2009, Greg now has another option. Since his family income is below 400% of the poverty line—about $73,000 for a family of three—and his contribution to his employer health plan is between 8% and 9.8% of his income, Greg is eligible to opt out of his employer's health plan and instead buy insurance from one of the plans on the newly created exchange. To help him pay for his new plan, Greg received a voucher for the amount of money his employer would contribute to their previous plan that he can instead spend in the exchange.

Hiram, 50, New York, NY

As an incredibly successful author, pulling in well over $100,000 a year in royalties from his many books, Hiram is doing great financially. But in purchasing health care in the individual market, he finds himself somewhat annoyed; although he can afford insurance, his premiums are rising but he doesn't qualify for subsidies to compensate for the difference. According to CBO estimates, premiums for those who don't receive subsidies and get their health care on the individual market will go up between 10% to 13% in the 10 years after the Senate bill passed. Making matters worse, Hiram might be paying higher taxes as well if his next book becomes a bestseller; the House bill, whose provisions were included in the final reform package, would put a 5.4% surtax on incomes over $500,000. On the other hand, Hiram's insurer is now restricted from raising his premiums above a certain level due to his age and cannot deny coverage due to a pre-exisitng condition, among a number of other regulations.

Ann, 33, Atlanta, GA

Ann's been working for Coca-Cola the last 10 years in human resources, and getting insurance through her employer. While she remembers some big hubbub back in 2009 over a health care bill, she hasn't thought about it much since. Her coverage was provided by her employer then, just as it is now, and since she has insurance, she doesn't have to worry about any fines from the newly implemented individual mandate that requires most Americans to purchase health insurance. Ann's insurance plan does have to comply with new regulations by the federal government, including a cap on out-of-pocket spending and an end to annual and lifetime limits on total coverage. But she hasn't gotten sick and hasn't noticed the changes. From her perspective, things are basically the same.

Alex, 72, West Palm Beach, FL

Alex, a retired lawyer, gets his health care through Medicare. Since 2010, the "doughnut hole," a gap in prescription drug coverage between $2,700 and $4,350, has been gradually closing en route to disappearing entirely thanks to the health care bill passed back in 2010. Which is good, because those blood-pressure meds don't come cheap. Some critics warned, during the 2009 debate, that cuts to Medicare that helped pay for reform could prompt some doctors and hospitals to abandon the program, but the AARP stood behind the plan and supporters insisted coverage would not be affected for its members since the reduced payments are mostly to the inefficient Medicare Advantage program.

Benjamin Sarlin is a reporter for The Daily Beast. He previously covered New York City politics for The New York Sun and has worked for talkingpointsmemo.com.