5 key points to know about the health care overhaul before major provisions of the law begin

  • Article by: AP BUSINESS WRITER
  • Updated: June 19, 2013 - 2:10 PM

Still a little hazy about the health care overhaul? You have plenty of company.

About half the people surveyed earlier this spring by the nonpartisan Kaiser Family Foundation felt they didn't have enough information to understand how the law will affect their family. Among those with an annual household income of less than $30,000, some 30 percent thought the law had been repealed by Congress or the Supreme Court.

That's the low-income demographic the law is designed to help the most as it extends insurance coverage to millions of uninsured people.

With those results in mind, here are five key points everyone should know about the overhaul, heading into this fall and 2014, when major changes start to unfold.

1. THE LAW IS IN EFFECT

Congress passed President Barack Obama's health care law in March 2010, and the overhaul has since survived 37 attempts by Republicans in the House of Representatives to eliminate, defund or partly scale it back.

The law, known as the Affordable Care Act or ACA, also survived a more substantial test last year when the Supreme Court upheld its constitutionality. However, the court's ruling gave states the right to decide whether to expand Medicaid, the state-and-federally funded program that covers the needy and disabled people. Medicaid plays a key role in the ACA's plan to provide insurance coverage to more Americans.

2. YOU WILL BE REQUIRED TO HAVE COVERAGE

The overhaul mandates that, starting next year, most U.S. citizens and legal residents obtain coverage or pay a penalty. Some exemptions have been carved out for groups that include Indian tribe members, prisoners and individuals who belong to health care sharing ministries.

The annual penalty starts at $95 per adult, or 1 percent of family income — whichever is greater — and then rises over the next few years.

3. MAJOR MILESTONES ARE LOOMING

Next year, the ACA will take two major steps toward its goal of providing more individuals with insurance coverage.

Medicaid coverage will be expanded in states that allow it, and many people will be able to buy coverage using income-based tax credits.

These tax credits, or subsidies, are reserved for people who can't get health insurance through an employer and who don't qualify for Medicaid, Medicare or military-based coverage.

State-based benefits exchanges will debut in October and they will enable consumers to go online to compare 2014 coverage terms and prices and then use tax credits, if they qualify, to buy a policy.

4. FINANCIAL HELP EXTENDS TO THE MIDDLE CLASS

The tax credits or subsidies will be available to help individuals and families making up to four times the federal poverty level. For 2013, that equates to an income of $94,200 for a family of four in all states except Alaska and Hawaii.

The tax credits will be doled out on a sliding scale. That means individuals with incomes closer to the poverty guideline will receive bigger credits.

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