Health insurers once could deny coverage or charge sky-high premiums for applicants with pre-existing conditions, which are medical conditions that pre-date the policy. The Patient Protection and Affordable Care Act of 2010 swept away pre-existing condition clauses in two steps. In Sept. 2010, the Act banned pre-existing condition clauses from children’s health coverage. As of 2014, this ban will extend to all insured people.
Before the Affordable Care Act, insurance companies rationed health care by limiting coverage of pre-existing conditions. Insurers wrote policies with riders that excluded coverage for these conditions. Insurers would also boost premiums for customers with health issues and might simply refuse to issue policies to people in poor health. Individual policies issued before the Affordable Care Act are grandfathered, meaning their pre-existing condition clauses can continue. However, you can replace these policies through the health insurance marketplace.
Health Insurance Marketplace
Under the Affordable Care Act, each state has a health insurance marketplace. The state may run the marketplace or pass the responsibility to the federal government. The marketplace policies are private plans, not government insurance. All policies sold through the health insurance marketplace pay for basic benefits, preventative care and pre-existing conditions. Your age, use of tobacco and location may affect your premiums, but your medical condition plays no part in figuring how much you’ll pay.
You may qualify for a federal subsidy that helps pay for policies you buy in the health insurance marketplace. Starting in 2014, single individuals can earn up to $45,960 and receive subsidized premiums. The income cap for a family of four is $94,200. You can take all or part of the subsidy each month to lower your premium or as a lump sum at the end of the year. You can choose from four different categories of polices: bronze, silver, gold and platinum. Higher-priced plans cover more of your costs and reduce your out-of-pocket expenses.
You can buy a policy outside of the health insurance marketplace, but it won’t qualify for a subsidy. However, it must cover pre-existing conditions. If your employer offers health insurance, you won’t qualify for marketplace subsidies unless the government considers the employer’s insurance unaffordable or if it doesn't meet minimum requirements. If your income is low, you may qualify for free or low-cost Medicaid health coverage and your children may qualify for the Children’s Health Insurance Program. Once you reach age 65, you qualify for Medicare, but you can use the marketplace to buy supplemental or dental insurance.
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