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Obamacare Explained: A Guide for Californians

Produced by KQED News and The California Report

I Have Health Insurance

At a Glance

  • If you already have health insurance from your employer, you don't have to do anything. The new health law does not require employers to change the insurance they provide.
  • Medicare is largely unchanged by the Affordable Care Act, although the law improves coverage of prescription drugs.
  • If you're already receiving Medi-Cal, you will continue to do so.
  • If you buy insurance for yourself or your family, you have access to a new marketplace called Covered California. You may also qualify for tax credits to help you pay for health insurance. Anyone who does not have health insurance can buy it through Covered California.

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Most people in California have health insurance, either from their employer or through a government program such as Medicare or Medi-Cal. If you are one of these people, the health law has very little effect on you. That's the headline.

But there are some caveats, so let's dive in.

Employer-based Health Insurance

If you receive health insurance at work, you are likely to continue to do so. But even though the health law is in full effect, employers may change plans, premiums, deductibles or other elements of the insurance they offer, just as they could before the health law was implemented.

The Affordable Care Act mandated several changes that benefit people with health insurance. These changes include:

  • Children can stay on a parent's plan until age 26
  • Your insurance company cannot drop you if you get sick
  • You get free preventive care with no co-pay and no deductible, including many cancer screening tests (although some plans already in effect may be exempt from providing this benefit)
  • Lifetime caps on coverage are banned
Medicare

The main change for Medicare beneficiaries is that the Affordable Care Act closes the so-called doughnut hole. That's the coverage gap in Medicare Part D, which pays for prescription drugs. Under Part D, seniors pay a certain initial amount for prescription drugs, then pay all of their costs up to $4,700, when coverage starts up again. The ACA requires this coverage gap to grow more narrow over time. The gap will be completely closed by 2020.

Medi-Cal

Medi-Cal is the government health insurance program for the poor. (In other states, it's called Medicaid.) If you are currently receiving Medi-Cal, you don't need to do anything.

But what many people don't know is that Medi-Cal does not cover everyone who is poor. Under the Affordable Care Act, California expanded Medi-Cal to cover more poor people who do not have health insurance. This guide has more information about the Medi-Cal expansion.

I Buy My Own Health Insurance. What Does the Health Law Mean to Me?

Before the ACA went into effect, people who bought insurance for themselves or for their families had no leverage with insurance companies. If you bought your own insurance, you may have paid a much higher premium than a large company would pay for similar coverage. If you were sick, the insurance company could have charged you a higher premium or refused to cover you altogether.

Effective Jan. 1, 2014, many of those insurance practices are no longer permitted. The health law restricts what insurance companies are allowed to consider in setting premiums. Specifically, insurers may no longer use your health history to set rates. Instead, rates will be based on three factors only: age, where you live, and number of people in your family. You cannot be turned down or charged a higher premium because you are sick.

The Affordable Care Act also makes it easier for individuals to shop for insurance. As part of the law, California set up an online marketplace where you can buy health insurance. The marketplace is called Covered California. Each plan offered on Covered California must offer a standard set of benefits. The goal is that consumers can make an "apples-to-apples" comparison of competing plans.

As part of its responsibility, Covered California reviews plans that insurance companies want to offer on the marketplace. The agency certifies plans that meet the requirements of the health law. People can shop for these certified plans and compare prices. In addition, consumers may qualify for subsidies (in the form of tax credits) to help them pay for insurance.

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