How will the new healthcare law affect you? KFF has examples

Following up on last year's nine-minute animated video explaining the Patient Protection and Affordable Care Act, the Kaiser Family Foundation has produced a new interactive feature that gives examples of how different individuals' situations will change (or not) in 2014 when the law is fully implemented. Click on character - 23-year-old uninsured graphic designer Phil Butler, the Santos family who gets insurance through work, etc. - or an employer to get the details about how the individual or family's situation will change. In some cases, like when a person gets health insurance through an employer or when an immigrant's visa expires before her green card application is decided, nothing is likely to change. But then there are characters like Tracy Macy, who will be eligible for new coverage but might or might not be able to afford it. Here's the description of her character:

• Tracy Macy
• 52, single
• $33,200 [annual income]
• Employed full-time
• No children
• Experiencing complications related to diabetes

Tracy Macy loves her job at a day care center. However, since being diagnosed with diabetes six years ago, Tracy is finding it more difficult to do her job. Her employer does not offer insurance and Tracy has been turned down by insurers in the individual market because of her diabetes. She continues to see the doctor who initially diagnosed her diabetes but she cannot go as often as she needs because of the cost.

And here's how the ACA will affect Tracy:

Tracy will be able to purchase coverage through a new state health insurance exchange where she will be guaranteed coverage--the law prohibits insurers from denying coverage or charging someone more because of a health condition. Tracy will also be eligible for federal premium subsidies to help her afford the coverage. With the subsidy, her premium will be about $250 per month or a little over 9% of her income. Although Tracy really needs health insurance, finding $250 a month in her budget to purchase coverage may be difficult. If she finds she cannot afford the cost, she will not be assessed a penalty because the cost of the premium exceeds 8% of her income.

Between now and 2014 when the exchanges are up and running, Tracy may be eligible for coverage through the Pre-Existing Condition Insurance Plan, which provides coverage to individuals with medical conditions who have been uninsured for at least six months. However, this coverage is not subsidized, and may be unaffordable.

The profiles assume that the characters' employment situations will remain the same in 2014, but that's not something we should be taking for granted in this economy. One of the things I appreciate about the Affordable Care Act is the knowledge that if it's implemented fully, I'd have a good shot at getting reasonably good and affordable health insurance coverage if I lost my employer-sponsored coverage in or after 2014. I could buy an individual policy through my state's health insurance exchange, and insurers couldn't reject me or charge me astronomical premiums based on my health history or the fact that I'm a woman of childbearing age. The plans would be required to offer essential health benefits, so I wouldn't have to worry about discovering that hospital benefits aren't covered at the moment of getting hospitalized with a health emergency.

There's also one other thing I'd add to the KFF's character profiles, which is that outcomes will vary depending on the states where characters live. Some of the variations in healthcare coverage that currently exist will disappear -- for instance, many states don't currently offer Medicaid coverage to adults without dependent children, but all states will have to extend Medicaid eligibility to adults with incomes up to 133% of the federal poverty level starting in 2014. (The federal government will cover 100% of the additional costs for states expanding coverage for the first three years, and then the federal share will decline gradually until it remains at 90%.) Where I expect will see a lot of variation will be in the health insurance exchanges that each state is required to establish by 2014 to sell insurance coverage (subsidized for those with low incomes) to individuals and small employers.

As Sarah Kliff explains at Wonkblog, exchanges can be better understood as marketplaces, and the Minnesota Department of Commerce has made five prototypes available on its website for people to explore and get an idea of how they'll work. States have a lot of decisions to make regarding their exchanges, such as who will run the exchange and whether it will merely serve as a clearinghouse (letting any plan that meets federal criteria be offered on the exchange) or be an active purchaser (e.g., requiring insurers to compete for exchange participation based on the value of the plans they offer). Politico's Jason Millman points out that state decisions about who can serve on exchange's governance boards will also affect the extent to which insurance companies, brokers, and agents can influence them.

Establishing the exchanges will require legislation or executive orders, and this Kaiser Family Foundation summary of state exchange activity as of July 2011 reported that at that point, only 26 states had passed legislation and three governors had issued executive orders. If states don't establish exchanges in time -- and the governors of Florida and Louisiana have declared that they won't, the Commonwealth Fund blog reports -- then the Department of Health and Human Services will take over that function.

So, the Kaiser Family Foundation's characters might end up having different experiences depending on the states where they live -- the currently uninsured Phil Butler might end up getting affordable, high-quality coverage through Oregon's exchange, while Cat Cutler might find the plans in Utah's exchange to remain out of financial reach (or vice versa). But it's still a great illustration of the variety of experiences people will have if the Affordable Care Act is fully implemented in 2014.