Frequently Asked Questions General Questions About the Health Care Law

1. What does the health care law do?

2. When does the health care law take effect?

3. Why did the Obama Administration decide the health care law is necessary?

4. What will the health care law cost to implement?

5. What makes health care premiums go up?

6. Will the health care law lower the cost of health insurance?

7. What changes will employers have to make as a result of the health care law?

8. What is the significance of legal challenges to the new law?

1. What does the heath care law do?
Here are some of the changes that are taking place as part of the new health care law:

  • People will be required to have health insurance
  • Health plans offered to people who purchase health insurance on their own and those that get benefits from an employer with 50 or fewer employees must include 10 core benefits, known as essential health benefits.
  • Employees must work at least 30 hours per week to be considered full-time.
  • Many single people and working families may get money from the government to help pay their health care coverage costs. This includes many people who the government does not help now.
  • Many state Medical Assistance programs, also known as Medicaid, are expanding by offering health plans to more people who are uninsured.
  • There will also be a new way to buy health insurance: the Health Insurance Marketplace.
  • Rates for individual and small group plans (50 or fewer employees) will be based on who will be covered under the health plan, their age, where they live, whether they use tobacco, and the health plan selected.

2. When does the health care law take effect?
The health care law is being implemented in phases over a 10-year period from 2010 to 2020. Some of the law’s major provisions — such as the mandate that requires people to have health insurance and the availability of tax credits and subsidies that will help many individuals and families pay for their health insurance — go into effect in 2014. But other important provisions started much earlier. Some parts of the law that are already in effect include:

  • The elimination of lifetime maximums on essential benefits and limits on annual limits. The extension of dependent coverage to age 26
  • 100 percent coverage of certain preventive care services
  • Reduction of the “donut hole” coverage gap for Medicare beneficiaries enrolled in the Part D prescription drug program. The donut hole with close in 2020.
For more about when key provisions of the health care law become effective, view our Key Provisions.

3. Why did the Obama Administration decide health care reform necessary?
There are three major reasons why it felt this way. Health care costs continue to escalate. As a country, we spend more than one sixth of our gross domestic product (the value of all the goods and services produced in the United States each year) on health care.

Next, the quality of care is inconsistent. Our country spends more on health care than nearly all other nations, but we’re not any healthier than most of them. In addition, too many people — nearly 50million — are uninsured. Independence Blue Cross believes everyone deserves the peace of mind that having health care coverage brings.

4. What will the health care law cost to implement?
When the law was passed in March 2010, the Congressional Budget Office (CBO) estimated that the bill would cost $938 billion over 10 years, including the projected cost savings and revenue increases that would help cover these costs. However, the CBO frequently updates its projections and now estimates that the health care law will cost more than $1 trillion.

5. What makes health care premiums go up?
According to PricewaterhouseCoopers, some major reasons why our health care premiums continue to rise include the following:

  • Many Americans have unhealthy lifestyles. Seventy percent of health care costs are related to chronic, but largely avoidable, conditions, like obesity, smoking, and inactivity.
  • The populating is aging. The number of older Americans is growing as the baby boom generation ages. Older people typically use more health care services, which raise total health care costs.
  • We want the best, most expensive care. MRIs, new drugs, and other technologies are very expensive — and they don’t always make us healthier.
  • Millions of Americans are insured. About 6.5 cents of every premium dollar goes to pay for care of the uninsured.
  • Doctors practice defensive medicine. Many physicians order extra or unnecessary tests to avoid lawsuits.

6. Will the health care law lower the cost of health insurance?
The new health care law will expand access to coverage and broaden insurance benefits. While these new laws increase benefits and reduce costs for some (especially those who receive a subsidy), others may find they have substantially higher premiums.

7. What changes will employers have to make as a result of the health care law?
Some employers may not be subject to all of the provisions in the new law if they have “grandfathered” status. Plans that were issued on or before March 23, 2010 are exempt from some parts of the law as long as they continue to qualify for grandfathered status. Some provisions that affect employers have already been implemented. Others will go into effect at different times. Here are a few of the key provisions that affect employers:

  • Employers with fewer than 25 employees whose average wages are less than $50,000 may qualify for a tax credit if they offer health care coverage (effective 2010).
  • Employers who offer dependent coverage must extend that coverage to adult children up to age 26 (effective 2010).
  • Employers with more than 50 full time and full-time equivalent employees may be assessed penalties if they do not offer coverage, do not offer the right level of coverage, or do not offer coverage that is affordable (effective 2014, however penalties will not imposed until 2015).
  • Some employers may qualify for reimbursement of some of the health care costs they incur providing insurance coverage to early retirees (effective 2010, ends 2014)
  • Employers offering group health insurance coverage cannot impose a waiting period of more than 90 days on individuals who choose to enroll in a health plan (effective 2014)

8. What is the significance of legal challenges to the new law?
There have been many legal challenges to the health care law, but the U.S. Supreme Court has affirmed most of its key provisions. While the debate and the court activity continue, the law remains valid at this time. Independence Blue Cross has and continues to make changes to our plans, procedures and policies to comply with the law.