How the ACA affects U

Almost all Americans are required to have health insurance by March 31, 2014.

How the ACA affects U

Tyler Gieseke

Although the Affordable Care Act will affect the University of Minnesota’s students and employees and many Americans in years to come, some may not understand the law’s provisions and impact.

The Minnesota Daily has compiled a breakdown of key changes for University students, faculty and staff.

 

Students

Student Health Benefit Plan changes:

•   Cost increase of 5 percent

•   Full contraceptive coverage

•   Full preventative care coverage

•   Elimination of $3 million lifetime cap

•   Dependents can stay on plan until age 26

•   No annual maximum on prescriptions

 

In response to the ACA, the University’s Student Health Benefit Plan is charging students more and increasing its benefits this fall.

The Office of Student Health Benefits is raising the cost of health care for students by about 5 percent. In exchange, the program is offering more benefits that the ACA also does, like eliminating a lifetime cap on coverage.

Students have mixed reactions to the changes. Some say the extra cost is worth more coverage, while others who seldom seek health care say the changes are unnecessary.

Under the ACA, young people will be able to stay on their parents’ health care plans until age 26.

In Minnesota, children could already remain on their parents’ plan until age 25, but the ACA now extends that age to 26, even for young adults who are married or not financially dependent on their parents.

But the family plan option might not be available forever, University finance professor Steve Parente said.

Because the age extension could make these plans more costly to provide, “the idea of having family coverage might become less interesting” to employers, he said.

Parente said companies might stop offering a family plan, making the requirement for children to be covered up to age 26 a moot point.

 

Individual health care mandate

Individual changes:

•   Provide proof of health insurance on taxes

•   Penalty for not having health insurance increases over time

 

When Americans begin preparing their 2014 taxes, they’ll need to do something they haven’t done before — prove they have health insurance.

Almost all Americans will have to fill out an extra tax form showing they were insured during 2014, Blewett said.

If they can’t provide proof of insurance, they’ll be charged a penalty fee.

The charge will increase each year. At a minimum, those who don’t purchase health insurance will have to pay $95 if they didn’t have coverage in 2014, $325 the next year and $695 in subsequent years.

 

University and employees

UPlan changes:

•   Increased primary and specialty care copays

•   New deductible on non-copay care

•   Merged family cost plans

•   Increased annual out-of-pocket limit for Medica Health Savings Account Plan

 

Beginning in 2018, the ACA will impose an excise tax on health insurance providers who offer a “high value” plan — plans that have low costs but substantial benefits — like the University’s UPlan.

That way, there’s an incentive for providers to make enrollees pay more and not overuse the plan, health policy professor Lynn Blewett said.

If the University chose not to shift some costs to employees, it would have to pay a $48 million tax, according to a memo Vice President for Human Resources Kathy Brown sent to UPlan members in July.

To counteract this, the University is instating a new deductible and increasing copays, Brown said in the memo.

The University Senate’s Finance and Planning Committee told President Eric Kaler in an August letter that although it’s concerned with possible effects for the lowest-paid workers and those with high health care costs, its members thought the changes needed to be made.

“The cost shifts do result in net savings for the University of $1.8 million annually,” the letter said. “The committee supports the proposal as necessary and appropriate in the circumstances.”

Hundreds of health care, clerical and technical union members rallied in protest of these changes late last month in front of the University’s main administrative building. Some union members proposed that the University instate a sliding-scale model that ties health care expenses to salary.

Jeff Ogden, the School of Dentistry’s chief administrative officer, said he thinks the University is doing the best it can to avoid extra costs.

“We all know that there are cost issues surrounding health care,” he said. “The University is making an attempt to address those cost issues to the best of its ability.”

 

Health insurance exchanges help high-risk enrollees

Changes for high-risk enrollees:

•   Can’t be denied coverage or charged more because of pre-existing conditions

•   Minnesota’s program for high-risk patients will dissolve

 

To streamline providing health care to most Americans, the ACA requires each state to either run its own online health insurance marketplace or use the federally run site, HealthCare.gov.

About one-third of states decided to run their own marketplace, according to the national Health Insurance Marketplace.

These websites, including Minnesota’s MNsure, opened to the public Oct. 1.

Small businesses and people who don’t have access to health care through their employers can purchase health care through the exchanges, Blewett said.

Most people under age 65 with incomes at or below 138 percent of the federal poverty level will be eligible for care through Medicaid starting Jan. 1. Before, Minnesotans were only eligible if they had incomes at or below 75 percent of the federal poverty level, Blewett said.

For a one-person household, 138 percent above the poverty level equates to a $15,856 salary in 2013.

If Americans’ incomes are between 138 percent and 400 percent of the federal poverty level, then they’re eligible for health care with tax credits, Blewett said. Those with incomes higher than that may purchase insurance on the exchange but aren’t eligible for government assistance.

Under the ACA, health care enrollees can’t be denied coverage or charged more because of pre-existing conditions, Blewett said.

In the past, many of these enrollees bought coverage from state-run programs — often the only place they wouldn’t be turned away.

Now, Minnesota’s high-risk pool can purchase health care through MNsure.