Will Health Reform Cost Me More?

President Obama's re-election guarantees that the health reform law will continue rolling out.

A WebMD survey after the election found that many readers want to know what impact the law will have on their health care costs.

The answer: It depends on where you get your insurance and your income level.

There's also a short-term and a long-term impact. The law puts in place many consumer protections intended to bring costs down in the long run, but not necessarily in the next year. Here's what you can expect to happen, depending on which group you fit into.

Insurance at Work

If you get insurance through your job, your costs may continue to rise, just as they have every year, at least in the immediate future (although the past few years have seen health care costs grow more slowly than in the past 50 years). That's because employers are shifting more costs onto employees through higher deductibles, co-pays, and co-insurance. These cost increases are not due to the law, says Julie Barnes, director of health policy with the Bipartisan Policy Center.

The health reform law does put in place a number of changes to the way health care is delivered and paid for, as well as limits on how much insurers can charge, that aim to lower overall health care costs. If these efforts are successful, health insurance premiums should cost less, the thinking goes. That, of course, remains to be seen.

If you like your insurance, the good news is that you are likely to be able to keep it. "What we're hearing our employer clients say is that 90% or more will continue to offer health benefits to workers in the same fashion they have historically," says Sandy Ageloff, senior consultant with Towers Watson. "They'll do what they need to do to comply with the law but won't be making fundamental changes."

Self-Employed and on Your Own

The main purpose of health reform is to give people who are self-employed or in small businesses access to the same coverage as people who work for large employers. "It's about standardizing coverage," Barnes says.

These groups can buy a health plan on one of the newly developed online insurance markets that are supposed to be in every state in October 2013. You may be eligible for tax credits to help you cover the cost.

A person making less than $44,680 annually or a family of four with a household income of $92,200 that buys coverage through the exchanges will qualify for a refundable tax credit.

Seniors and People With Pre-existing Conditions

People with health conditions or older adults may get a break on their health insurance costs.

Starting in 2014, insurers will no longer be allowed to turn people away or charge them more because of a pre-existing health condition.

Older adults also can't be charged more than three times what a younger person pays for the same health plan.

People With Low Incomes

As many as 17 million people nationwide could be eligible for Medicaid coverage, the federal and state-funded program that provides insurance to low-income people. The law this year increases coverage to individuals with an annual income of about $15,415.

It may not apply to everyone, however. The Supreme Court's ruling from earlier this year gives states the option of whether they want to participate in this program.

Small Businesses

The law calls for the development of the Small Business Health Options Program (SHOP) Exchanges, where businesses with up to 100 employees can purchase insurance coverage.

Small businesses with fewer than 25 employees may also qualify for a tax credit of up to 35% to offset the cost of premiums between 2010 and 2013, and up to 50% in 2014.

Medicare

People with Medicare coverage, in some instances, have already seen their costs go down. The prescription drug "donut hole" is set to close by 2020 so seniors have reduced out-of-pocket costs for medications. In addition, preventive services such as annual doctor visits and screening tests are now available without a co-payment or deductible.

People with incomes of $85,000 or more have paid higher Medicare Part B premiums since 2007 and higher Part D premiums since 2011. Those rates have been frozen, says David Lipschutz, policy attorney with the Center for Medicare Advocacy, Inc. "Over time, as cost of living adjustments increase, it will apply to more people," he says.

The Tax

The law requires nearly everyone to have insurance in 2014 or pay a fine on their income tax of 1% to 2%. Some people may still find insurance too expensive and be willing to pay the fines.

"At the end of the day there will be people who will decide they'd rather pay 1% or 2% of their income to the IRS than 5% or 8% for [insurance] coverage," says Anthony Wright, executive director of the health care consumer advocacy coalition Health Access.