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New health law changes take effect in 2014

The Patient Protection and Affordable Care act is one of the most expansive and sweeping laws to pass in a generation. Major changes will take effect by the end of 2014 for taxpayers, consumers, businesses, insurance companies, Medicaid and Medicare. The bill outlined immediate changes that were required by federal law to take effect at the state level by the end of 2010. I talked in this space last week about those changes the state has made, including the NY Bridge Plan. This week, I wanted to outline some of the major changes that will take hold through 2014.

The most obvious change is the major mandate this law brings: it requires everyone to purchase health insurance. Beginning in 2014, those who do not have health insurance will be fined. By 2016, the fine is either $695 for each uninsured family member or up to $2,085 or 2.5 percent of the household income.

State-run exchanges

By 2014, states will be held responsible for creating exchanges-a marketplace for people to purchase health insurance. These exchanges are expected to level the playing field for consumers and are supposed to make shopping for options and comparing coverage easier. In the beginning, they will be offered to people who are unemployed, self-employed or work for businesses that don't offer insurance. There will be different insurance plans but all are required to cover essential benefits such as: emergency, hospital, maternity, ambulatory care, mental health, substance abuse, drugs, rehabilitative and habilitative services and devices, lab, prevention and wellness, and pediatric services.

The Congressional Budget Office estimates about 25 million will shop for coverage in the exchanges run by the states; about 19 million of which will qualify for financial aid, which would help keep costs of health insurance for consumers to about 10 percent of their income, as specified by the new law. It is up to states to decide criteria of the exchange. For example, prior to 2016, states have the option to limit exchanges to businesses with up to 50 employees; beginning in 2017, states have the option to allow businesses with more than 100 employees to purchase coverage for their employees through the exchange. By 2011, federal grants will be made available to states to establish the exchanges.

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