As an health insurance broker, I look at how this will effect my business and my path to FI. From what I have been told from my carriers based on how they are preparing for the law's regulations and other associations who are keeping up with this, here are some details:
1. Grandfathered plans are important (for now) - if you had your plan prior to the law passing March 23, 2010; you can keep your HDHP/HSA. If you made any changes to that plan after that date, you lost grandfather status. Grandfathered plans can stay as they are after 2014. Non-grandfathered plans will have to be modified into PAACA qualified plans on 1/1/2014. So if you purchased your HSA after the law passed, it will go away on 1/1/2014.
For those who kept their HSA plans and did not make any changes, your plan may enter the death spiral of a "closed" health pool. Since no new people are coming into the plan to offset the older and sicker people already in the plan, there is nothing to offset the older/sicker people's claims. Higher claims from the pool of people will negatively affect the premiums of the pool. As long as usage in the pool stays low, premiums will likely stay low. Personally, I have kept my HSA in place and will continue to keep it as long as I can. Once 2014 comes, I will evaluate the options and decide based on what available.
2 - Exchange plans must have a 1:3 pricing ratio - this means some one who is 64 can only be charged 3 times more than someone who was just born. My major carrier now has 18 different pricing brackets. By reducing that to 3, it increases the cost considerable for the young and healthy to offset the costs of the older/sicker.
3 - Subsidy - from what research and info I have been able to gather, a subsidy may not be so easy to get. There are several factors that come into play with regard to the subsidy. Your MAGI is less than 400% of FPL, you are not eligible for any group health plan (including your spouse's or parent's employer's plan), in which the employee contribution to the EMPLOYEE-ONLY premium is less than 9.5% of the family income; then you will be eligible for the subsidy on a sliding scale starting at 133% of FPL to 400% of FPL.
4 - Plans inside/outside the exchange (bronze, silver, and gold) - The companies offering plans outside exchange must offer plans actuarially (not sure if thats a word) equal to plans sold inside the exchange (there goes HSA plans for those who bought after the law was signed into law). One plan my major carrier offers that comes somewhat close to bronze level coverage costs around $1,000/month for a family of 4 with out all the mandated coverage that will be required in 2014.
5 - Pay the fine or not? Depending on the penalty, many healthy people may opt for the penalty rather than pay for coverage. If plans are guaranteed issue, why pay for coverage until you need it. If the government does not put in an annual enrollment period restricting when you can sign up or require a 30 day waiting period, the penalty may be a popular option.
With all this said, there are still a lot of details to be ironed out. I personally don't think people will be really excited about how this law will effect health care. I do believe change was/is needed, but this law does nothing to control costs. There are some parts that are good, but I feel costs will like continue to increase.
People will still live unhealthy lifestyles and this law requires others to subsidize it through health care premiums. I like HSA plans because they put the consumer of health care service in payment loop. Meaning HSA holders are more likely to question if an additional test is necessary. While group plans tend to remove the consumer from the direct payment of said health care service. Example being a doctor covering his backside by performing 5 tests to make sure he is absolutely sure you have strep throat and not some 0.01% chance you have some rare disease, while the patient does not care because it "cost" $15 to go to the doctor.
There are SO many moving parts with this law, so trying to understand the consequences from just 18 months out is still difficult. However, once we are in the middle of it we may find some good/bad consequences. Only time will tell. As for myself, it is still up in the air if brokers will be compensated to help people find appropriate coverage for them and their families. If we are required to offer free assistance to people in the exchange, many brokers will leave this market. No need to be forced to do work you won't be paid for...it's hard to reach FI when you are not compensated for your work. ; )
