Common Misconceptions about Health Care Reform

Health Care Reform has passed.  Yet, there are still a lot of people out there that do not understand how the bill will affect them.  Here are a few common misconceptions people have:

• How do I get this new insurance?
• There is no new insurance.  There is no public option.  By 2014, states will be setting up insurance "exchanges."  These exchanges can only offer certain plans, plans which will be dictated by the government.  There is no government plan, so the plans that are offered at these exchanges will be from current insurance carriers.  The only difference is, your income will dictate what plan you can get and the amount of government subsidy you will receive.
• "Finally, free health insurance!"
• Health insurance will not become "free" due to this bill.  It may become less expensive, depending on your household income, but it may also become more expensive depending on your household income.  For example, if someone with a household income of less than $29,000 goes to the exchange to buy insurance they will only pay $595 a year for their insurance.  However, if someone with a household income of $88,100 would have to pay $8,379 for their insurance.  Remember, this is household income, not individual income.  
• "Where are these 'exchanges?'"
• They have no been set up yet.  States will not have them up and running until 2014.  Most of the laws in this bill do not take effect until 2014. 
• "As an employer, it is going to be cheaper for me to get rid of my health plan and send my employees to the exchange"
• Financially this will probably be correct for the employer, but not always the employee.  Remember, the subsidy amount the employee will receive is based on household income.  So your lower wage workers will not mind, in fact they may get a better deal from the exchange.  However, anyone making around $50,000 or more in your company will be upset with you, especially if they have a spouse who is also earning a salary, because the subsidy is based on household income.   These employees will show up at the exchange and find out they will have to pay significantly more than they are paying now through payroll deductions under their employer sponsored plan.  These subsidies are going to create problems with employers and employees.