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North Carolina ObamaCare FAQs

Now that ObamaCare has been passed into law, there are a lot of changes North Carolinians should be aware of. When a new law passes, it is difficult to gauge the impact it will have within a specific state. We want those in North Carolina to be prepared so no one is surprised by a new tax, pays more than they should for health care or misses out on subsidies they qualify for.

1. Will ObamaCare cause my North Carolina health insurance to increase?

The short answer, it depends. 

Employer Sponsored Insurance:
If you already receive coverage from your employer in North Carolina, you may see the cost of your plan rise. Many businesses are trying to push more healthcare costs onto employees in the form of higher deductibles and copays. The healthcare reform puts some new limits on the amount insurers in North Carolina can charge as well as some other structural changes to the healthcare system with the goal of lowering overall healthcare costs. Policy requirements for health insurance plans in the health insurance exchange will affect employee sponsored health insurance as well.  See our blog for specifics on how current NC insurance plans may be affected.

Medicaid:
ObamaCare plans to expand the Medicaid program cover anyone with an annual income of up to 138% of the poverty level, which is about $15,415 a year for individuals. States can choose to opt out of the Medicaid expansion; on February 13, 2013, North Carolina voted not to expand Medicaid within the state. For more information on if you qualify for Medicaid in North Carolina, visit http://www.ncdhhs.gov/dma/medicaid/who.htm

Middle Class: 
Tax credits will be available to people earning up to $90,000 per year for a family of four and who purchase health insurance through one of the online health insurance exchanges to be set up in 2014. 

2. What is a health insurance exchange? How will the exchange work in North Carolina?

The health insurance exchange will be an online collective where individuals, families and small businesses in North Carolina will be able to purchase health insurance. Each state has an option as to how they will set their exchange up. States can set up a federal health insurance exchange a state-federal partnership exchange or a state-based exchange.  

While North Carolina originally planned to set up a state-federal partnership exchange, the legislature is moving toward a purely federally run exchange. On the whole, the exchanges will work to help lower the cost of health insurance for individuals and small businesses in North Carolina by giving them more buying power. Unfortunately, there is not much information as to what kind of plans will be offered by the exchange yet. Changes in requirements for insurance plans offered through the exchange will have a direct impact on the requirements for private health insurance purchased outside the exchange. This means that even if you do not buy health insurance through the exchange in North Carolina, costs and coverage of your current plan may change. Visit our blog for more information on how your health insurance plan may be affected. 

3. When will the health care changes be implemented?

The health care changes will be implemented in North Carolina over the next year, with the major changes to be completed by Jan. 1, 2014.  Below is a quick timeline so you can see an overview of the changes ahead. 

  • January 1, 2013
    • Married couples with a joint income of over $250,000, self employed individuals and single individuals who earn more than $200,000 a year will see a 0.9% income tax increase.  
    • Those with an adjusted income of over $200,000, or $250,000 for couples, will see an increased Medicare tax of 3.8% on unearned income.
  • August 1, 2013
    • Religious organizations granted a one year extension of the contraceptive mandate will no longer be exempt.  *Proposal on Feb. 1, 2013 may allow religious organizations to be exempt. http://www.cnn.com/2013/01/31/politics/religion-contraceptive-insurance
  • January 1, 2014
    • Maximum out-of-pocket premiums will be determined based on family size and the federal poverty level.
    • Insurance companies are no longer allowed to charge higher rates based on preexisting conditions or gender.
    • The tax on uninsured individuals comes into effect.
    • Insurers may no longer establish annual spending caps.
    • All individuals with an income of up to 133% of poverty level will qualify for coverage in states where Medicaid is expanded.

4. Who gets penalized for not having insurance and what are the penalties?

The individual mandate in the Obama Administration’s healthcare plan says that every American must have health insurance. A tax will be levied against those who fail to purchase insurance by January 1, 2014.  However, there are exceptions. Below is a list of people who can be exempt from the penalty:

  • People between jobs with no insurance for up to three months
  • Those with religious objections
  • Illegal immigrants
  • Inmates
  • Members of an Indian tribes.

How much will the penalty be for those without health insurance?  North Carolinians without coverage will have to pay a $95 annual tax per adult, with a family maximum of $285, or up to 1% of the family income, whichever is greater. 

5. How does ObamaCare affect Medicaid and Medicare?

Medicaid: Medicaid, the service that provides healthcare to low-income Americans, is being expanded under ObamaCare. Each state had the option to opt-out of the Medicaid expansion. Both North and South Carolina have voted not to expand Medicaid coverage within the state. This means that Medicaid qualifications will stay the same within North Carolina, those who currently qualify will continue to receive benefits. 

Medicare: The main cuts to Medicare will be in attempt to eliminate Medicare fraud and reduction in the payments made to the Medicare Advantage programs offered by private insurance companies in NC. The overall cuts to the plan will be about $716 billion, but ObamaCare aims to fill the coverage gap in the Medicare prescription drug benefit.

6. What is a grandfathered plan?

A grandfathered plan is a health insurance plan that was purchased on or before March 23, 2010. If the plan has covered at least one person continually from that day forward then it may be exempt from the Affordable Health Care Act changes until a new policy year begins.  

Under the Affordable Health Care Act, health insurance plans are required to cover some “essential health benefits.” These are coverage options like maternity care, ambulatory care and prescription drugs. The essential health benefits will be determined on a state by state basis, but grandfathered plans will not have to include the essential benefits until the plan starts a new policy year. 

7. Health care reform, the Affordable Health Care Act and ObamaCare. What’s the difference? 

Many of the buzz words you read when picking up the paper in Raleigh, North Carolina or watching the news in Charlotte are all referring to the same thing. Health care reform, the Affordable Health Care Act and ObamaCare are all names that refer to the health care changes initiated by the Obama administration. The Affordable Health Care Act is the official name for Obama’s health care reform, ObamaCare is an unofficial name that the public has adopted to refer to the plan. 

8. What are the “essential health benefits”?

The essential health benefits are benefits that must be included in any health plan sold to individuals or businesses in North Carolina. These benefits include coverage for things like maternity, newborn care, hospitalization, ambulatory care and prescription drugs. Each state will decide which benefits will be essential for health insurance plans within that state. The package in North Carolina must offer a minimum of 10 categories of essential benefits. 

9. Can I get free health insurance?

Unfortunately, the ObamaCare plan does not offer you free coverage. You will still have to pay for a health insurance plan unless you qualify for Medicaid or Medicare in North Carolina. If you do not qualify for one of those programs, you may be eligible for subsidies based on your income level. In 2014, Americans with an annual income of 100 to 400% of the federal poverty level will be eligible for some sort of subsidy. For more information on whether you may qualify for a subsidy, please contact us! 

10. Do I need to have health insurance?

Yes. Under the Affordable Health Care Act you are required to have health insurance unless you are otherwise exempt. Other exemptions include, 

  • People between jobs with no insurance for up to three months
  • Those with religious objections
  • Illegal immigrants
  • Inmates
  • Members of an Indian tribes.  

Group Health Insurance in North Carolina
  • If eligible for coverage, an applicant may not be denied or charged more due to health problems.
  • Extra opportunities may be available for life changes involving children, marriage, family problems or job loss.
  • Special considerations are offered to dependent and disabled children.
  • A new employer may withhold coverage for a certain period.
  • A new HMO may require an ‘affiliation period’.
  • Insurance providers may review medical records on a pre-existing condition for the six months immediately preceding intended coverage start date.
  • A pre-existing condition may be excluded from coverage for up to12 months.
  • Creditable coverage applies when a pre-existing condition was covered continuously without a break longer than 63 days.

Small Business Health Insurance in North Carolina

  • Small businesses with fewer than 50 employees may not be denied small group health insurance
  • Coverage may not be cancelled because of sickness within the employee group.
  • Small business employers are protected from widely varying premium prices.
  • Small businesses may apply for standardized plans.
  • Small businesses with fewer than 50 employees may join a statewide purchasing pool for group health insurance.
  • Contact the North Carolina Department of Insurance for more information.

North Carolina Department of Insurance 
P.O. Box 26387 
Raleigh, NC 27611
(919) 733-2032
www.ncdoi.com

Self-Employed Health Insurance in North Carolina

  • The self-employed may purchase small group health insurance with proof sole proprietorship.
  • Providers must offer standard or basic insurance to those requesting it on behalf of a household employee, although other types of group coverage may be denied.

Individual Health Insurance in North Carolina

  • Individual health insurance may be denied based on health problems of all individual insurers except Blue Cross Blue Shield of North Carolina which must guarantee individual coverage.
  • For those eligible under HIPAA, insurance companies must offer two plans with good benefits and may not exclude coverage for any length of time. There are no limitations set on prices of premiums.
  • Providers may attach elimination riders in reference to pre-existing conditions.
  • Providers may exclude coverage for up to 12 months.
  • Any claims made within the first 24 months of coverage allows the provider to review to the 12 months immediately prior to coverage for pre-existing conditions related to the claim. Should a pre-existing condition be found through objective standards, providers may refuse to pay the claim.
  • There are no premium price limitations for an individual policy or a renewal.
  • Coverage may not be cancelled due to illness

North Carolina Health Care Programs

Medicaid, Health Choice for Children, and Breast and Cervical Cancer Control Program are assistance programs available in North Carolina. 

Location Status of State Exchange Decision Medicaid Expansion Decision Executive Activity
North Carolina Default to Federal Exchange Opposes5