Ready to be Insured?

By the most convoluted methods -- and narrowest of margins -- the U.S. Supreme Court approved the Patient Protection and Affordable Care Act (ACA), which the president is happy to now call "Obamacare."

Republicans will fight and the Tea Party will rail against the way Chief Justice John Roberts did an end run around his conservative colleagues and turned the "penalty" into a "tax." But it is law for the foreseeable future. "The health care reform genie is out of the bottle and there is no way to get it back in," says Lawrence Mirel of R Street, a Washington, D.C.-based think tank.

The result: Millions of Americans may have to seek their own medical insurance and purchase it through newly formed health insurance exchanges, which must be operational in all 50 states and the District of Columbia by Jan. 1, 2014. These exchanges, arguably the most important part of the law, will be Internet marketplaces where health insurance companies will compete for the consumer's dollar and he or she will, hopefully, get the best deal.

Easy out

An estimated 134 million Americans with full-time employment have health coverage through their companies. But about two-thirds of those firms could decide that, under Obamacare, their premiums are too expensive, according to a study by insurance broker Willis Group. Kevin McCarty, Florida insurance commissioner and president of the National Association of Insurance Commissioners, is among those who are "concerned about the potential for increased health insurance premiums and continued disruption to the stability of the marketplace" as a result of the ACA.

For companies that want to drop their own health insurance plans, the ACA offers an easy out: Pay a $2,000 penalty per employee. That's far less than the $10,000 average cost of a health care plan. And that's particularly true if you are a low-income or part-time worker at a company like McDonald's or Walmart that doesn't need to offer a Cadillac health plan to keep employees.

Not unexpected

President Obama is well aware that this new law has fundamentally changed the health care industry and that people are going to need an alternate way to obtain the mandated insurance coverage.

The Department of Health and Human Services has already sunk $1 billion into grants to set up the new health insurance exchanges and a federal health exchange in states which hold out. Governors like New Jersey's Chris Christie and Wisconsin's Scott Walker, who fought against the exchanges or refused to move ahead, will have to speed up the process to meet the January 2014 deadline, or have it done for them by the federal government.

To date, 14 states and the District of Columbia have already established health insurance exchanges, according to the Kaiser Family Foundation, including California, Massachusetts and New York. Three states -- Louisiana, Maine and New Hampshire -- have refused. Other states are "studying options," or have had "no significant activity."

An educated consumer

Since health exchanges and other major parts of the ACA don't become law until 2014, and because companies are still considering their options, most people have some breathing room.

If employed with a health care plan, employees should keep a close eye on which way their company is leaning. Will your employer indicate it will drop its plan or raise the costs of the plan to the point where it becomes unaffordable for workers? Will it offer financial incentives to employees to leave the plan and go to the health insurance exchange instead?

For the 27.5 million self-employed Americans who run a small business, or the 30 million who don't have health insurance, the best choice might be to go to the health exchanges once they are operational. Theoretically, all major health insurance companies within a state will participate, as they do in Massachusetts. New initiatives may allow out-of-state insurers to compete, thereby lowering costs even further.

Click and buy

The best window into how a health insurance exchange will operate can be found in Massachusetts, where "The Health Connector," started under former governor and now Republican presidential candidate Mitt Romney, has been operating since 2006. Its website features options from eight different insurers, and consumers "click and buy" the same way they would with any other website. Right now, 98.1% of Massachusetts residents have health insurance, according to Connector spokesperson Richard Power, and 227,000 purchase it through the state's health exchange.

But will average Americans be able to wind their way through the complex health care maze -- an issue so complicated that it led to a confusing 2,400-page law and a 250-page Supreme Court decision? That remains to be seen.

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