Affordable Healthcare Act: What You Need To Know Now

March 6, 2013 9:25:07 AM PST
The Affordable Healthcare Act is being called the most historic overhaul of the U.S. health care system since Medicare and Medicaid. Understanding it right now, could help you make better decisions in the future.

New healthcare rules are still months away, but insurance expert Wendell Potter warns:

"It's very important to find out what your obligations are going to be," said Potter.

Starting next year, you must have health insurance. Those who don't, face a penalty of $95 per taxpayer or 1 percent of their annual income, whichever is greater. That means, a family making $50,000 a year will pay $500 in fines.

In 2016, those fines increase to $695 per taxpayer or 2.5 percent of family income.

The penalty is calculated on a month-to-month basis, so it's a good idea to start comparing insurance plans now.

"We need to make sure we're looking and paying attention to what is covered and what's not. What our out of pocket expenses are going to be," Potter said.

Starting in October, people in need of insurance can shop for plans that will take effect on January 1, 2014, through "exchanges," basically one-stop shops for your insurance needs.

"People need to understand that they are more than likely going to have to pay more out of pocket than they might expect," said Potter.

That's because insurance premiums are expected to go up 10 to 13 percent, but preventative services like breast cancer and cholesterol screenings, as well as routine immunizations like flu shots will be covered without any out of pocket costs.

Under the Affordable Healthcare Act, insurance companies cannot deny coverage based on pre-existing conditions, but premiums can vary based on age, where you live, family size, and tobacco use.

If you like cigarettes, get ready to fork over a lot more cash for health coverage. Smokers may have to pay up to 50 percent more for premiums than non-smokers.