The Patient Protection and Affordable Care Act will help the Spencer Family in several ways:
First, as someone with a pre-existing condition: Beginning in 2014, new rules will end medical underwriting and pre-existing condition exclusions. Insurers will be prohibited from denying coverage or setting rates based on health status, medical condition, claims experience, genetic information, evidence of domestic violence, or other health-related factors. Premiums will vary only by family structure, geography, actuarial value, tobacco use, participation in a health promotion program, and age (by not more than three to one).
Second, as a potential self employed or small business owner: Starting this year, businesses with 10 or fewer employees and annual average wages of less than $25,000 will be eligible to receive a 35 percent tax credit. The credit decreases as the number of employees and the annual average wages increase. It is eventually phases out at 25 employees and a $50,000 annual average wage. Nonprofit businesses are also eligible for credits starting at 25 percent. In order to participate, the business owner must pay at least 50 percent of the employee’s premium.
This system will only be in place until 2014, when the state-based exchanges are implemented. At that point, only small businesses that participate in the exchanges will be eligible for the credit, but the credit will be higher—up to 50 percent for private companies and 35 percent for nonprofits. For many small business owners, the passing of health reform means they will finally have a chance to offer affordable insurance not only to their employees, but to themselves as well.