Are Your Ready For Obamacare?

Are you aware of the fact that the Quality, Affordable Health Care For all Americans Act or as it’s most commonly called, Obamacare is almost here. October will see the opening of the first-ever health insurance exchanges. For example, where we live there is a a “marketplace” that will open in October called Connect for Health. When people access it, they will be able to apply for insurance and see all of the health plans available in our state. These exchanges or marketplaces should also be able to tell you if you qualify for free or low-cost coverage available through Medicaid or the Children’s Health Insurance Program (CHIP). You’ll find out if you can get lower monthly premiums for private insurance plans and see if you would qualify for lower out-of-pocket costs.

No one law can solve all problems

You might remember Speaker of the House Nancy Pelosi saying about the Act that “We have to pass the health care bill so you can find out what’s in it.” So now, four years later we’re beginning to see what’s in the Act. While it will be good for some people, it does include some not so pleasant surprises.

You may not be able to keep your current health care insurance

While President Obama promised that you would be able to keep your health care plan, this may not be totally true. Some insurers are telling policyholders that their health care plan is being eliminated. This is due to the fact that insurers are getting rid of some of their plans and replacing them with others designed to meet the requirements of health care reform. You should be able to keep your existing policy as it may have been “grandfathered” and is exempted from the new requirements. So while you could keep that policy you may decide not to. This is because you may he offered better coverage for less money.

Bare-bones coverage

If you work for a big company that has a lot of low-income workers and who are currently uninsured, you may find that you’re being offered really bare bones coverage. These companies are typically big retailers and restaurant chains. Many are set to offer “mini-med” or bare-bones coverage to avoid the Obamacare penalty of $2000-$3000 per employee for not offering qualifying coverage. The good news is that this “employer mandate,” which was to take effect January of next year has been shelved until 2015.

The tax on “Cadillac” plans

Obamacare includes a 40% excise tax on high-cost or what are called “Cadillac” health care plans that will take effect in 2018. This tax will be assessed on individual plans that cost more than $10,200 and family plans that cost more than $27,500 a year. The problem with this is that it’s likely to have an effect on a number of innocent workers who have fairly ordinary health plans but that cost a lot because of the size of their company, job location and other factors. What this tax may do is create a big incentive for employers to turn towards cheaper and less-generous coverage so that more costs are shifted onto their workers.

Would you like to be an entrepreneur?

Historically, health insurance has tended to keep employees locked to jobs. The reason for this is because the non-group insurance market – or insurance for individuals – has been very dysfunctional. On the other hand, Obamacare should create an affordable, stable and adequate non-group market so people may feel freer to walk away from their corporate jobs and become entrepreneurs.

Young people will benefit

Most young adults will benefit from healthcare reform as they will be eligible for federal subsidies that should make quality health insurance affordable. This can be especially true for unmarried, lower-earning people. It is estimated that there are 21 million young people now uninsured and most have low-to-moderate incomes. The majority of them will be able to purchase affordable coverage with assistance through the new state exchanges or marketplaces. This will begin with early enrollment in October. Another positive of healthcare reform is that young people will be able to remain insured under their parent’s health care plan until they turn 26. In fact, it is thought by many experts that young people will be the biggest beneficiaries of Obamacare.

How the subsidies will work

If you learn through your health insurance exchange that you’re eligible for a subsidy, here’s how this will work. You will be given a choice of taking the maximum subsidy or a lesser amount. If you believe that your income will increase in the coming year, you might decide to take less than the maximum so you won’t have to pay the government anything back at the end of the year. Regardless of which amount you choose to take, your subsidy will be paid to your insurance company by the federal government every month. For example, if your insurance premium is $600 a month and you’re eligible for a subsidy in the amount of $400, the government will send the $400 directly to your insurance company. You will be required to pay the $200 difference.

It’s not simple

The Quality, Affordable Health Care For all Americans Act is not a simple piece of legislation. There are varying numbers as to its size but most agree that it’s the least 1400 pages long, plus there may be as many as 20,000 pages having to do with regulations. In any event, it’s a very complex piece of legislation and not easy for us ordinary people to understand. If you work for a company, you may have already been briefed as to how Obamacare will affect you. If not or if you’re an independent worker, you may have to wait until your state’s insurance exchange (marketplace) opens to see and understand your options.

Other new taxes

Obamacare includes other taxes not related to insurance policies. Here’s a brief video that explains them.