5 things to know about health care overhaul

survey taken this spring indicated about half survey taken this spring indicated about half of all Americans were confused about the implementation, requirements, benefits and costs of the Affordable Care Act, or Obamacare. Photo Credit: iStock

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Still a little hazy about the health care overhaul? You have plenty of company.

About half the people surveyed this spring by the nonpartisan Kaiser Family Foundation felt they didn't have enough information to understand how the law will affect their family.

Here are five key points everyone should know about the overhaul, heading into this fall and 2014, when major changes start to unfold.

1. The law is in effect: Congress passed President Barack Obama's health care law in March 2010. The law, known as the Affordable Care Act or ACA, survived a substantial test last year when the Supreme Court upheld its constitutionality.

However, the court's ruling gave states the right to decide whether to expand Medicaid, the state-and-federally funded program that covers the needy and disabled people. Medicaid plays a key role in the ACA's plan to provide insurance coverage to more Americans.

2. You will be required to have coverage:The overhaul mandates that, starting next year, most U.S. citizens and legal residents obtain coverage or pay a penalty. The annual penalty starts at $95 per adult, or 1 percent of family income -- whichever is greater -- and then rises over the next few years.

3. Major milestones are looming:Next year, Medicaid will be expanded in states that allow it, and many people will be able to buy coverage using income-based tax credits.

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These tax credits, or subsidies, are reserved for people who can't get health insurance through an employer and who don't qualify for Medicaid, Medicare or military-based coverage.

State-based benefits exchanges will debut in October and they will enable consumers to go online to compare 2014 coverage terms and prices and then use tax credits, if they qualify, to buy a policy.

4. Financial help extends to the middle class: The tax credits or subsidies will be available to help individuals and families making up to four times the federal poverty level. For 2013, that equates to an income of $94,200 for a family of four in all states except Alaska and Hawaii.

The tax credits will be doled out on a sliding scale. That means individuals with incomes closer to the poverty guideline will receive bigger credits.

5. Insurance prices may change: Health insurers are warning that premiums, or the cost of coverage, could soar for some people due to a number of factors. Those include taxes and fees, as well as coverage requirements the law imposes.

Young, healthy people who currently have low-cost coverage may see some of the biggest hikes in part because the law limits the price differences an insurer can charge a person based on age.

Insurers generally charge seniors more because they tend to generate more expensive claims.

The subsidies that individuals start receiving next year will help offset these price hikes. Most who gain coverage in the individual insurance market will have income levels low enough to qualify for some subsidy help, said Jennifer Tolbert, a health reform expert with Kaiser.

She said that will be especially true for the younger customers who may face the biggest price hikes.

About 149 million individuals have employer-sponsored health coverage in the United States, making it the largest source of coverage. Those who work for big companies may not see a lot of change, at least initially.

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The law will add costs like premium taxes to the average worker's insurance bill. But the employer generally pays most of that bill, which means some employees may not notice the additional cost.

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