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.

Do you want that raise or not? A formula for 400 percenters

Because tax credits or subsidies to offset insurance premiums are eliminated for taxpayers with  household incomes over 400% of the federal poverty line, crossing that income threshold creates a potentially large tax penalty, especially for older adults who will be face higher premiums.  This means that a slight gain in the year’s income for a taxpayer on the edge of eligibility could end up costing more than the amount gained.

This can obvious impact decisions as to whether to accept a moderate increase in pay, as well as impact decisions that could result in other taxable income, such as managing investments.

On the other hand, it’s generally better for a person to get more money than less, so it would be foolish for someone to forego an income opportunity that would result in gains that substantially outweigh the loss of a tax credit.  

Why the Bronze plan may be better than you think

There is provision of ACA that is sure to change the way we talk about insurance for many years to come. That is the creation of the four metal tiers of insurance plans: Bronze, Silver, Gold, and Platinum. Henceforth, all health insurance offered in the US must fit within one of these categories.

The ACA sets an array of standards that all insurance policies must meet, whether they are sold on or off the exchanges. Because of that, the different metal categories will generally provide the same basic benefits. The difference between one metal tier another lies in how costs are shared between the insurance company and the patient.  There has been a lot of number crunching, and there is enough flexibility that you will find some variations in how the plans are structured from one state to the next.

The Bronze will have the lowest premiums, but also shift more responsibility for payment to the insured:  if you opt for Bronze, you will have a higher deductible and higher copays.

Who’s Left Out? (Part Two)

The goal of the Affordable Care Act was to help several large classes of people who had been excluded from the insurance market because of rising prices and previous insurance practices. Those consisted mainly of people who could not afford to pay for insurance, and people who could not buy insurance at any price because of present or past health problems.

But most Americans already had insurance.  According to a recent NBC News report, 32 percent of Americans get government-sponsored insurance such as Medicare or Medicaid.  Among those too young for Medicare, 58 percent get health insurance through an employer.

Employer-provided insurance typically offers more choices and better coverage options than policies available on the individual market.  The ACA was never intended to disrupt or undermine that market, so the ACA specifically excludes individuals who are eligible for employer-provided insurance from subsidy eligibility.

There is one exception: if the cost to the employee of the employer-provided subsidy is more  than 9.5% of the employee’s income, then that person can shop on the exchange instead and receive a subsidy if the income is low enough. 

Falling off the cliff…..

The really cool part about Obamacare, especially for we older folks, are the subsidies. 

The really terrible part about Obamacare, especially for we older folks, is what happens if our incomes too high to qualify for subsidies, but just barely.

Here’s why:

The part that makes the care “affordable” is that everyone who earns income between 100% to 400% of the federal poverty  line gets a tax credit for any amount that we pay that is above a certain percentage of our income. That percentage varies, but is no more than 9.5%.  Because we need to pay our insurance premiums right away, the law has another perk: we can choose to claim that tax credit in advance, and the government will pay it out in monthly installments directly to the insurance company.