The Affordable Care Act: What you need to know now
By Leon Rousso 03/13/2014
More commonly known as Obamacare, the new law has snowballed its way into people’s homes spreading confusion and uncertainty across the land.
Something that was intended to fix America’s health care system has people struggling to make sense of fact vs. fiction.
Unfortunately, those without the facts tend to shout the most loudly, which simply adds to the confusion.
Below is some important information you need to know.
ACA was created with the best of intentions:
It is meant to help countless individuals with preexisting conditions obtain insurance plans for the first time in years. A concerted effort from all of us will be required to fine-tune it from here. Patience is what we need now.
Based on your income and household size, the first thing you need to do is determine whether you qualify for a subsidy. To help you make that determination, log on to the Kaiser Foundation calculator to learn if you do. http://kff.org/interactive/subsidy-calculator/
If you believe you qualify for a subsidy, then you must enroll via www.coveredca.com. This is the only place to obtain any eligible subsidy. Unfortunately, there are additional criteria to qualify, the most important being that if even one adult in the household is offered “affordable minimum essential coverage” by his or her employer, no one in the family can claim that subsidy.
What is the definition of “affordable”?
If the share of the employee’s premium cost for “employee only” coverage is less than 9.5 percent of his or her annual income, then it is deemed affordable. The problem is, most employers pay a good portion of the “employee only” coverage, which, up until now, was a valuable part of compensation but this one factor will eliminate eligibility for a large portion of the workforce. (Example: Your spouse earns $35,000 per year and you stay home with one child. Your spouse’s employer provides insurance and his/her cost is $250 per month. Here is how to determine if it’s affordable: $35,000 x 9.5 percent = $3,325. Divided by 12 months is $277. You do not qualify for the subsidy even if the portion you would pay to add your dependents costs upward of $600, which is not uncommon).
Now what to do if you qualify?
You did the math and you qualify for a subsidy; great. Log on to www.coveredca.com and enroll in a plan by March 31. The lowest premiums will come with bronze plans and the highest premiums will come with platinum plans. If you do not qualify for a subsidy, you may not want to go through Covered California. You have access to the same plans and unsubsidized premiums direct with the carriers and you may have even more options to choose from. Having a licensed agent or broker assist you with the process will cost you nothing and you gain his or her knowledge of the industry. In order to avoid any possible penalty you must get insured by a plan that meets the Affordable Care Act provisions by April 1.
One final stumbling block to be careful of: (the biggest information gap)
Congratulations, you were able to find an “affordable” and compliant individual plan that meets all your needs. Now you need to be sure your doctors and hospitals are in the network. This issue is only now starting to surface and could be the most important of all.
Don’t just rely on your doctor’s office to confirm that it is your plan’s network. This has always been a problem but is being exacerbated under ACA. Unfortunately many physicians did not have time to understand the full extent of their contracts with insurance companies. If they opted out of the subsidized plans, they’ve also opted out of the plans that are direct with the carriers. Unless the plan is grandfathered, all plans had to be ACA-compliant as of January 2014. This meant new networks and benefits.
Needless to say, having an informed insurance agent to navigate your personal situation is invaluable. The window to enroll and/or make changes ends March 31. Unless you have a “qualifying event” beyond April, you will be stuck in your plan until the next open enrollment window.
In closing, don’t try to understand all the ramifications regarding ACA/Obamacare. The one thing to know is that if you have preexisting conditions you can finally get insurance.
If you don’t have preexisting conditions but have health insurance which may be changing or has been canceled, please know that the entire insurance industry is working hard with regulators, medical providers and others to fix what’s broken.
We are just at the beginning and anything this big will need time to work out the kinks.
ACA is not the last word on health care in America but it’s definitely progress. In this author’s opinion, which I’m sure I will get plenty of flack about from my peers, what we need is a one-payer system, similar to Medicare. It has been working well for more than 50 years. If funded properly it will provide a solid safety net for all our citizens. Insurance companies could create supplemental plans to add additional benefits over and above the basic plan for those who want it and could afford it. This way, everyone wins.
Sources for additional information: AHIP www.ahip.org/ IRS www.irs.gov/uac/Affordable-Care-Act-Tax-Provisions-Home
Leon Rousso, CFP, is president of Leon Rousso & Associates, Inc. in Ventura; www.leonrousso.com.