Guide to Healthcare.gov

The ultimate guide to buying insurance on HealthCare.gov

Posted by Sarah Kliff on December 10, 2013 

This guide is what you need to know — and we’ll be updating it going forward, as we get new questions from readers.

Stupid News for the Math Challenged

Reaching a new low in sheer stupidity, CNN is now reporting that many Americans won’t be eligible for “Obamacare subsidies” because the insurance premiums in their states are too low, as if that means they are somehow being cheated.  They provide the example of subsidies in Portland, Oregon phasing out at the $28,000 income level for people under age 35 — and complain that the Obama administration had “promised”  a higher “threshold for government assistance.”

Or to put it simply:  CNN is upset that that insurance is being sold too cheaply to trigger the need for young people to get government help to pay their bills.

As if it would somehow be better if those youngsters in Oregon could be charged so more, so that more taxpayer dollars could be sent to the insurance companies.

So, here are a few pointers for the mathematically challenged:

HealthSherpa Web site

Does navigating your government-created health exchange web site give you a headache?

Here’s a quick online tool to find the health care offerings in your area, including a tool to quickly estimate subsidies:

http://www.thehealthsherpa.com/

This is a free tool created  using public databases. No login required — all information can be quickly entered on the home page, with results appearing as the the data is entered.

(Created as a public service by three young and capable San Francisco-based computer technicians – see http://www.thehealthsherpa.com/about to learn more about them)

 

Today’s number: 17

17% of potentially eligible Americans visited Affordable Care Act marketplaces in October, according to a survey by the Commonwealth Fund.  Of those visitors,  20% were young people between the ages of 19-29, and 20% of those who visited actually enrolled in a plan.  60% of survey respondents were aware of aware of the purpose of the health care exchanges; of those that did not enroll,  37%  cited technical problems with the exchange web sites as the reason for not enrolling.

See:  http://www.commonwealthfund.org/Publications/Data-Briefs/2013/Nov/Americans-Experiences-Marketplaces.aspx

17 million individuals will qualify for insurance subsidies, according to an analysis by the Kaiser Family Foundation. This number represents nearly 6 in 10 Americans eligible to participate in the ACA health insurance marketplaces.   To receive a subsidy through the ACA, individuals must earn between 100-400% of the federal poverty line.  Most of the individuals qualifying for subsidies reside in Texas, California, and Florida.

See: http://kff.org/health-reform/issue-brief/state-by-state-estimates-of-the-number-of-people-eligible-for-premium-tax-credits-under-the-affordable-care-act/

Silver plans turning out to be best choice in N.C.

Yesterday my wife and I met with seven employees of a company to get started on enrolling them and getting them health insurance. Most of them were part time employees making about $17,000 to $20,000 a year; the two full-time employees made a little over $35,000. We can’t verify their eligibility for subsidies yet, but Blue Cross/Blue Shield has now implemented a way to “estimate” the amount of subsidy you might receive, and has calculated the plan rates accordingly.

What we’ve found so far is that the bronze level plans, while extremely inexpensive ($10/month for someone making $17,000 and single), have very high deductibles ($5000 plus $200 on prescription drugs). While the silver plans have higher monthly premiums (about $50 to $70 for the same person depending on which network of providers you get), the deductible was $500/$200 and the total out-of-pocket was only $700.

This is one problem the navigators face that we don’t: Navigators are not supposed to give advice about which plan you should choose. Whether the navigators are following that rule is unknown to me, but it seems to me to be fairly inevitable that anyone looking at those plans would instinctively blurt out that “The bronze plan is NOT in your best interest unless you know you’re not going to get sick at all in 2014.”

Another problem we had: While the website showed the estimated subsidy and gave one range of plans, when we clicked the button to email the quote to the client they got an email without the subsidies and with a slightly different set of policies. That’s something we’re going to bring to the attention of BCBS today when they have a webinar for all their agents in North Carolina.

It’s also been a revelation to us how little people know about the ACA in general. More on that in my next post.

Figuring your household income (Part Two)

The starting point of determining your household income for purpose of the ACA tax credit is your adjusted gross income AGI).  As explained in my previous post (Part One), your household income is the combination of the AGI of the primary taxpayer and any other family  members with incomes large enough to trigger tax liability, together with any tax-exempt income from interest, social security, or foreign earnings.

AGI is defined in Internal Revenue Code section 62.  It is the amount remaining after subtracting various specified deductions from  your gross income (or the total of all taxable forms of income). Because these various deductions can potentially reduce your income by thousand of dollars, it means that you or your family may be eligible for the premium assistance tax credit even if you have total income well above the 400% federal poverty level.

Here are some of the most common deductions enumerated in Section 62 which may effectively reduce income. Many individuals or families whose household incomes fall above the 400% FPL subsidy limits may find that they can effectively reduce their AGI and qualify for significant credits toward their insurance by simply taking advantage of deductions they may not have fully utilized in the past.

Figuring your household income (Part One)

One of the first questions you will need to answer to purchase insurance on or off the new exchanges is your income.  You can skip this question if you don’t want to claim an advance tax credit (subsidy) — but even the private insurance companies will encourage you to provide enough information to determine if you are eligible for a subsidy.

If you enroll via an exchange and opt to take a subsidy, that will be reconciled the following year when you file your tax return.  If it turns out that your tax returns show that your 2014 income is higher than the number you reported, you may have to pay back some or all of the subsidy you receive in the form of a tax payment due in April 2015.  If it turns out that your income is less — or if you enrolled via an exchange but opted not to take an advance tax credit — then you may be entitled to an additional tax credit, that will be paid to you in the form of a tax refund.

So it is important to get things right: but if you are applying for insurance now, you are answering questions about 2013 income when, in the end, it will be your 2014 income that counts.  You will be able to report any changes of income during the year, but that could end up being rather cumbersome if you have some types of income that are fluctuating or subject to change – for example, if part of your earnings depends on earning commissions, or your work hours vary from one week to the next.

This is a complicated topic, but I will start by breaking it down in steps:

No, you can’t just wait until you get sick to sign up

A persistent but dangerous myth about Obamacare is that because insurers can no longer turn people down due to pre-existing conditions, that healthy people can just save their money and wait until they actually get sick or injured to sign up.  But it just doesn’t work that way.

You can’t just sign up for insurance any time — you need to do it during an open enrollment period.  This year, there is an extended period, from October 1, 2013, to March 31, 2014.  But in future years, the period will be only about 6 weeks from late October through early December.  There are some circumstances that will enable a person to sign up outside of the open enrollment period, such as change in marital status, loss of employment, or a new child in the family due to birth or adoption. But getting sick or injured is not the type of event that will allow someone to sign up outside the public open enrollment periods.

Also, insurance coverage does not start on the day you sign up. Generally, if you sign up within the first 15 days of a month, your coverage will begin on the first day of the next month. If you sign up on day 16 or later, the coverage will begin on the first day of the next succeeding month. So the people who sign up by December 15 of this year will have coverage on January 1.  A person who signs up on December 20 will have to wait until February 1 for coverage to begin.

Who can help me with health insurance?

Buying health insurance is complex, even more so with the advent of the Affordable Care Act (ACA). We should expect website glitches and some confusion in these opening months of implementation as it is a huge program bringing about dramatic social & financial change across the country. As long as you have completed your application by December 15, 2013, you will have coverage in place beginning January 1, 2014, there is no reason to fight the system until it is running smoothly.

There are several ways to buy your health insurance. If you do not believe you will qualify for a subsidy you can buy a plan off the exchange through an agent or through the company directly. If you believe there is any possibility of qualifying for a subsidy, you should use the exchange marketplace as this is the only way to be allowed that subsidy credit. In order to obtain the exchange plan, you can contact your state or federally run exchange directly, use a ‘Navigator,’ or a licensed health insurance agent.

Seven ways to buy individual insurance in 2014

It is now the end of the second week after the launching of the ACA exchanges, and it seems that there is still a lot of confusion.  Some state exchanges seem to have ironed out the glitches in their system, but other states and the federally-run Healthcare.gov site still have confusing and crash-prone sites.  So I thought I would list the various ways that an individual can shop for and buy insurance right now.

1) On the appropriate exchange web site for your state:  As noted, these web sites are buggy and not always that easy to navigate. However, some are working well, and many people have already successfully signed up for their new insurance under Obamacare.

2) By submitting a paper application:  Yes, it is possible to sign up for insurance without a computer.  However, the process for getting and submitting a paper application may vary depending on where you live.  In California, you can download the paper application from the Covered California web site and send it in by regular mail. The mailing address is printed on page 2 of the form.