What GOP Health Care Means for Your Wallet

Here are some elements of the current Republican health plan that might directly affect your wallet.

Will you be better or worse off if Republicans pass their version of health care reform? That’s the burning question for most Americans as they watch the arm wrestling going on in Washington, D.C. As with the health care debate itself, there are no easy answers.

The bill being debated right now, the American Health Care Act working its way through the House of Representatives, offers strong hints about what health insurance will look like when designed by Republicans. In general, young, successful, healthy people will pay less, but many other groups will pay more — or not have health insurance at all.

The Congressional Budget Office chimed in on Monday with a much-anticipated report saying the Republican plan would lead to 14 million fewer Americans having insurance than under Obamacare in 2018. Other estimates have pegged the number at 10 million (S&P Global Ratings) to 15 million (Brookings). The CBO also noted premiums may be 10% lower by 2026 than under Obamacare.

Obamacare 101

Before we get into the details, some perspective is necessary. While Obamacare did have provisions that dealt with the overall health insurance market, it was mainly aimed at the uninsured, and most of its provisions dealt with the mechanisms needed to get those Americans coverage. Much of the Republican plan deals with changing that market.

In total, about 22 million consumers are insured by what most folks call Obamacare – some 8 million via state exchanges, and another 14 million through expansion of traditional Medicaid, according to The Heritage Foundation. Nearly all of them enjoy some kind of government subsidy.

The Obamacare exchanges, which tend to dominate headlines, are in reality a small portion of the health care insurance market. Many Americans get insurance through their employers. There are another 10 million or so who directly buy their own insurance in the private market, outside the Obamacare exchanges. And 15 million get coverage through small-employer plans, according to Heritage.

Because the health insurance market has these very distinct elements, discussion about health care coverage can be confusing. Take the individual mandate and its associated tax penalty for those who don’t get insurance, which is incredibly unpopular with conservatives. It obviously doesn’t directly impact those who already get insurance at work. Also, the large premium increases that Obamacare exchange consumers experienced last year, which were indeed painful, only directly impacted the consumers getting Obamacare subsidies.

On the other hand, anything that happens to one end of the health insurance market is bound to have impacts on the rest of the market. Those who purchased individual plans directly — not on the exchanges — saw increases that were in line with Obamacare increases, leading to a lot of sticker shock.

Other popular Obamacare provisions, like a list of minimum coverage requirements or the elimination of pre-existing condition rejections, naturally led to increased health insurance premiums for all. Bottomline: Even if you aren’t using Obamacare exchange insurance, any changes to health care coverage will impact you. (If you’re looking for an Obamacare refresher, we’ve got one here.)

What’s in the Current Republican Health Care Plan?

Here are some elements that might directly affect your wallet.

1. Mandates Gone, But Not Really

Mandates, which conservatives impulsively dislike, are gone. Individuals will not face a tax penalty if they fail to get insurance, as they do under Obamacare. The House GOP plan does have a similar provision, however. Consumers who let their insurance lapse but then decide to get it later will pay a 30% surcharge. So while Americans are free to forgo insurance, that becomes a lifetime commitment — at least in order to avoid something that’s an awful lot like the old Obamacare penalty.

Employer mandates are gone, too. Under Obamacare, firms with more than 50 full-time employees must offer insurance. That requirement would be removed by the Republican plan. Depending on your perspective, that will either lower costs for business owners or hurt small business workers who might lose coverage they receive at work.

2. Subsidies Gone, But Not Really

Some say Obamacare helped middle-class and poor insurance shoppers afford high premiums with monthly subsidies. The subsidies, which could cover most of the monthly payment, were determined by a complex calculation involving income and regional costs. (Health care is more expensive in states like Alaska.)

The income cap for getting aid is about $48,000. With the Republican plan, subsidies are being “replaced” by tax credits and would be far more widely available. Families with incomes up to $150,000 would be eligible for as much as $4,000 toward health care costs. The tax credit amount, which will not be adjusted for geography, will likely be less than the Obamacare subsidy in most cases. The new tax credit would be $1,700 less on average than under Obamacare, according to the Kaiser Family Foundation.

A word about the Republican tax credit. It will be “advanceable,” meaning consumers can use the money as they pay their premiums, rather than wait until the end of the year when the money might be returned as a tax refund. If that sounds a lot like the way Obamacare’s subsidies work, that’s because they are essentially the same thing.

Health Savings Accounts

Republicans have long liked the idea of Health Savings Accounts, so the GOP proposals dramatically increases their limits. Consumers with high-deductible plans can twin these with health savings accounts, which are a little bit like 401(k) plans. HSAs let consumers put aside their own pre-tax income, invest it and use it for any health care cost. Supporters think HSAs support consumer choice; opponents are worried about health care funds being placed at risk in the stock market.

Right now, HSAs are capped at around $3,400 for individuals. The GOP plan would increase that limit. It would also lower penalties for the health care equivalent of early withdrawal – spending the money on non-health care costs. HSAs act a bit like a second IRA, because the money can ultimately be used for retirement, so this is a very good thing for workers who already max out other retirement plan options. It doesn’t help other groups who aren’t that lucky, however.

We explained how HSAs work earlier this year.

How Older Americans Lose

Older Obamacare consumers will almost certainly see their premiums rise under the GOP plan. Obamacare allows insurers to charge older consumers up to three times more than younger consumers. With the GOP health care bill, that jumps to a factor of five. This would likely lower costs for young buyers and raise it for older buyers.

Taxes May Be Lower, But Who Will Pay? 

The other politically attractive element of Obamacare is that it allows Republicans to say they’ve repealed most of the new taxes associated with it, not just the individual mandate penalty but other taxes that are unpopular with businesses, like a medical device tax. The tanning salon tax would disappear, too.

That raises an obvious question, however: Who pays? Either a whole bunch of people have to lose coverage, or money to pay for it has to be found somewhere. There simply is no way to repeal taxes but keep giving consumers coverage without exploding the deficit.

The Big Picture

It’s important to note that, Paul Ryan’s protestations aside, the American Health Care Act really is just a first offer in a negotiation that is sure to take many twists and turns. That means none of the specifics in this story are carved in stone. Still, when Republicans in the Senate have their say, you can expect these same concepts to come up over and over again — mandate elimination, tax credits, swelling the ranks of the uninsured.

Will your wallet win or lose when the final version is signed? Time will tell.

Are you concerned how your budget or even your credit score will be affected GOP health care reform? Share your thoughts with us in the comments section below. 

Image: FatCamera

The post What GOP Health Care Means for Your Wallet appeared first on Credit.com.

Will Trump’s Big Health Care Plan Give You Money Trouble?

Here's how to prepare your funds for a Trump presidency.

On Monday, President Donald Trump addressed a joint session of Congress (and the nation). In his speech, he shared his blueprint for the country’s future.

Many of his remarks centered on national security, jobs and taxes, but the item on many minds was health care.

Following a spate of town hall meetings in which angry constituents confronted their Republican representatives, Trump laid out his vision for replacing the Affordable Care Act (ACA, also called Obamacare).

Trump’s health care plan, if enacted by the Republican-controlled Congress, is likely to have an impact on your bottom line. Here’s how.

5 Health Care Principles in Donald Trump’s Speech

Trump’s speech to Congress included five principles he wants to see in the ACA’s replacement plan.

1. Keep Coverage for Pre-Existing Conditions

Trump insists that any replacement of the ACA should keep the coverage requirement for pre-existing conditions. If you’re staring down a medical condition, you should still be covered, assuming Trump gets his way.

2. Continue Tax Credits & Expand HSAs

Trump wants to continue offering tax credits to those who need help paying for health insurance (something that’s currently offered under the ACA). He also wants to expand the use of Health Savings Accounts (HSAs).

3. Offer States ‘Resources and Flexibility’ for Medicaid

One of the key points of the ACA was its Medicaid expansion. However, when the Supreme Court upheld the ACA in 2012, it ruled that states didn’t have to participate in Medicaid expansion. As a result, some states have “gap” populations, where tens of thousands aren’t covered by the ACA but still can’t get Medicaid.

Trump has promised “insurance for everybody,” and Medicaid expansion is probably a part of that. House Speaker Paul Ryan is a proponent of the use of block grants for Medicaid, and that could change the way Medicaid is administered in some states.

4. Pass Legal Reforms & Reduce the Price of Drugs

Trump’s health care plan champions legal reforms to protect patients and doctors from “unnecessary costs.” He hasn’t offered a lot of information about how to go about that, though.

A more interesting part of that principle is the idea of reducing drug prices. President Trump has been focused on the cost of prescription drugs since his campaign and insists that negotiation can bring down the cost of drugs. If this tactic is adopted, it could help many people on life-saving medications save money.

5. Create a National Insurance Marketplace

One of the sticking points many people have is that, for the most part, you can’t buy insurance across state lines. The ACA allows for multi-state exchanges, but they haven’t been used very much and success has been dubious.

Trump hopes a national marketplace will force insurers to compete more and offer additional choices for consumers, driving down the price.

What Trump’s Health Care Vision Means for Your Wallet

President Trump’s proposed health care policies would likely have an effect on your insurance costs. Here’s what to watch for.

Tax Credits for Coverage

The ACA currently offers tax credits for purchasing insurance through an exchange. Donald Trump’s speech to Congress last night indicates that tax credits for coverage will still be part of the plan.

But for millennials, that could actually mean paying more for coverage, thanks to a re-jiggering of how these tax credits would work.

A draft ACA replacement bill has been circulating, and presumably, the Trump Administration approves (Trump health secretary Tom Price is in favor). In this bill, tax credits are based on age instead of income.

If that policy is passed, older Americans would see more help under a new health care plan and younger Americans would see less. For some millennials getting subsidies under the ACA today, premium costs could go up due to a smaller tax benefit.

Expansion of HSAs

Details about the expansion of Health Savings Accounts haven’t been released, but their use is supported by both Trump and GOP members of Congress. This provision could be a good thing for younger Americans with few health care needs.

With an HSA, you receive a tax deduction for your contribution, and the money grows tax-free as long as you use it for qualified medical expenses. Under the ACA, you need a high-deductible plan to qualify. A high-deductible plan comes with a lower monthly premium, so users can save money each month that way.

If you don’t spend a lot on health care, the expansion of HSAs could be an advantage, depending on how the expansion is accomplished. If contribution limits are raised or the requirement for a high-deductible plan is eliminated, the HSA piece of “repeal and replace” could have a net benefit on your pocketbook.

National Health Insurance Exchange

The theory behind a national health insurance exchange is simple: Buying across state lines would give consumers more choices and cheaper coverage.

However, this might not actually work as intended. A study from Georgetown University looked at a six-state exchange under the ACA and found that it didn’t bring in new options, or even reduce costs.

On a national scale, though, the results might be different. If insurers are forced to compete by offering different plans, it’s possible that costs could decrease. However, state regulation will still be an issue, and no one has addressed how state-level regulation fits into a national health exchange.

Continuous Coverage

In his speech to Congress last night, Trump insisted that the government shouldn’t mandate coverage. But what’s the alternative?

According to the draft ACA replacement plan, Americans would need to have “continuous coverage” for a set period of time in order to take advantage of coverage for pre-existing conditions. In addition, those who don’t maintain continuous coverage would be subject to higher rates if they decide to re-enroll with an insurance plan.

If you don’t maintain coverage, you could see a significant uptick in your premiums as a result.

What Happens If You Receive Insurance Through Work?

One thing Trump didn’t address was the issue of what happens to those who receive insurance through work.

It isn’t clear how tax credits, Medicaid block grants and other items would be paid for, since the latest proposals are mum about the taxes the ACA imposes on those with higher incomes.

Ideas circulating among GOP members of Congress include a provision that caps the tax exclusion on coverage from employers. That means if your employer-sponsored health coverage exceeds the cap, you could pay higher tax costs.

The Bottom Line on Trump’s Health Care Plan

For now, it’s mostly speculation. Trump’s speech set forth principles for an ACA replacement, some of which protect the more popular aspects of Obama’s health plan.

Of course, it’s actually up to Congress to decide how to proceed. President Trump can outline his preferences, but that doesn’t mean Congress will follow his lead.

As with any policy, there will be winners and losers. Whether you end up paying more or less for insurance depends on what happens next in Congress.

Image: BasSlabbers 

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Trump’s Congressional Speech Debrief: 5 Changes He Has in Store for Obamacare

In his first speech to Congress Tuesday night, President Donald Trump outlined the overhaul he and his administration plan to make to the Affordable Care Act, known as Obamacare.

The proposed new health care plan now heads to the Congressional Budget Office and could face more changes as Democrats and Republicans battle over it in the House and Senate.

Trump urged Congress “to save Americans from this imploding Obamacare disaster.”

The president promised to repeal and replace Obamacare. Here are five key ways he plans to dismantle the current health care system.

You could be in a high-risk pool if you have a pre-existing condition

“First, we should ensure that Americans with pre-existing conditions have access to coverage, and that we have a stable transition for Americans currently enrolled in the health care exchanges,” Trump said in his speech Tuesday night.

A draft of revisions to the Affordable Care Act leaked to Politico on Feb. 24 references high-risk pools, although Trump did not discuss them in his speech.

States would have the ability to create high-risk pools for people with pre-existing conditions who are searching for health care. According to the draft, states would receive $100 billion over nine years in “innovation grants” that would be used to fund high-risk participants, news outlets such as CNN reported.

“High-risk pools would need a lot of taxpayer funding to work properly, experts say,” the Commonwealth Fund, a private nonpartisan foundation that supports independent research on health and social issues, tweeted after Trump’s speech.

You could receive a tax credit — even if you don’t deserve one

Tax credits and expanded health savings accounts could help Americans purchase their own coverage. It should be “the plan they want, not the plan forced on them by our government,” Trump told Congress.

Tax credits based on age, with the elderly receiving higher tax credits, would take the place of Obamacare’s income-based subsidies.

“For a person under age 30, the credit would be $2,000. That amount would double for beneficiaries over the age of 60, according to the proposal,” reported Politico prior to the speech.

The credits were also heavily criticized by some GOP members.

“So the headline is that the GOP is reducing subsidies to needy individuals when in fact, the growth of the taxpayer-subsidized reimbursements will actually increase,” Rep. Mark Meadows (R-N.C.) told CNN. “The total dollars that we spend on subsidies will be far greater. So you can be a millionaire and not have employer-based health care and you’re going to get a check from the federal government — I’ve got a problem with that.”

“What are tax credits & savings accounts going to do for those who don’t have money to spend on healthcare in the first place?” tweeted Advancement Project, a national civil rights organization.

Chris Rylands, a partner in the Atlanta office of Bryan Cave LLP, says many people are worried that the tax credits will make it difficult for low-income participants to afford coverage.

Under the current system, many individuals eligible for a subsidy are immune to price hikes in insurance because the government picks up such a large portion of the cost. The proposed Republican system might make them better consumers, says Rylands, whose practice focuses on employee benefits.

“However, given the complexity of health insurance plans and the opacity of the pricing of health care services, it’s not clear whether individuals can really become well-informed consumers,” Rylands says.

You could lose Medicaid

Trump said his changes would give governors the resources and flexibility they need with Medicaid “to make sure no one is left out.”

Under the Trump administration’s revisions, Medicaid would be phased out within the next few years. Instead, states would receive a specific dollar amount per citizen covered by the program. States would also receive the ability to choose whether or not to cover mental health and substance abuse treatment.

“Medicaid is the nation’s largest health insurer, providing coverage to nearly 73 million Americans,” tweeted the Commonwealth Fund after Trump’s speech. In a follow-up tweet, it said capping spending for Medicaid will reduce coverage rates and increase consumer costs and the federal deficit.

However, the Center for Health and Economy, a nonpartisan research organization, reported in 2016 that block-granting Medicaid in the states will lead to additional savings. H&E projects that the decrease in the use of Medicaid funds, by block-granting Medicaid in the states and the repeal of the Medicaid expansion, would be an estimated $488 billion from 2017 to 2026.

Rylands points out that this will not be a popular provision in Congress.

“What I heard here — although [Trump] didn’t say so in so many words — is that they want to try to turn Medicaid into a block grant program, similar to what was done with welfare reform in the 90s,” Rylands says. “However, I suspect many governors from both parties will not like this because it could mean states will pick up more of the tab for Medicaid.”

You could pay less for drugs

Trump proposes legal reforms to protect patients and doctors from unnecessary costs that make insurance more expensive and bring down the “artificially high price of drugs.”

Alongside medical device manufacturers and insurers, the pharmaceutical manufacturing industry is obligated by the Affordable Care Act to pay a yearly fee. It was determined the industry would pay $4 billion in 2017, $4.1 billion in 2018, and $2.8 billion each year after. However, proposed revisions to the Affordable Care Act include repealing the tax.

Some consumer advocacy groups are hopeful that repealing the taxes will reduce drug prices.

“From life-saving cancer drugs to EpiPens, high Rx prices push critical care out of reach for those who need it,” tweeted AARP Advocates, a nonprofit advocacy group for senior citizens.

You could purchase cheaper health insurance across state lines

“Finally, the time has come to give Americans the freedom to purchase health insurance across state lines — creating a truly competitive national marketplace that will bring costs way down and provide far better care,” Trump told Congress.

Under the current law, many states have the choice whether or not to allow insurers to sells plans between states. However, even when allowed, there isn’t much incentive for health care providers to do so.

Difficulty building a network and attracting enough customers to create a large enough risk pool makes this option unappealing to insurers, the Center for Health and Economy reported.

Whether this proposed change will result in a healthy competition in the industry or in a race to the cheapest offer remains to be seen, says Rylands.

“This has the potential to undermine traditional state regulation of insurance … since it would allow insurance companies to sell into a state without having to comply with that state’s particular insurance laws,” Rylands says.

The post Trump’s Congressional Speech Debrief: 5 Changes He Has in Store for Obamacare appeared first on MagnifyMoney.

5 Ways Your Obamacare Coverage Could Change This Year

 

Humana’s announcement last week that it is dropping out of the Affordable Care Act (also known as Obamacare) exchange and President Donald Trump’s tweet Friday that the Obamacare repeal is “moving fast” capped a frenzied week for the embattled law.

The proposed rule the Trump administration issued last week could mean major changes and increased costs for those who have Obamacare as well as other coverage. Congress would have to act to change Obamacare.

Amid the uncertainty about what will happen to Obamacare, here are five potential ways you and your health care spending could be impacted if the changes succeed.

The main changes would include:

  • Giving insurers the ability to offer more products that also cost more.
  • Removing the federal government’s oversight of insurers’ hospital and doctor networks.
  • Cutting in half the open enrollment period.
  • Requiring paperwork in advance that proves eligibility for enrolling outside of the open period.

    1. You might need to find a new health plan

Humana last week announced it will drop out of the exchange, saying it would no longer provide individual plans in 2018.

“That’s been a pretty consistent phenomenon for the last two years, where you might have a particular insurance provider and then they pull out of the exchange, and so now you’ve got to go find another one,” says Chris Rylands, a partner in the Atlanta, Ga., office of Bryan Cave LLP, an international law firm. His practice focuses on employee benefits.

Humana analyzed the customers who had signed up through the exchange and found too much risk

2. Your costs for women’s health benefits could rise

With the Trump administration’s vow to overhaul Obamacare, some American women are feeling insecure about their birth control options.

In one example, Cecile Richards, president of Planned Parenthood, told CNN’s Christiane Amanpour in January that Planned Parenthood’s patient requests for IUDs has jumped by 900%.

Sneha Bhakta, 22, is among the women who plan to look into requesting an IUD.

She and her parents pay about $500 each month for the three of them to have insurance through Obamacare.

“I follow the news extremely closely. Yes, my parents are concerned about the changing policies. Mostly because it’s all up in the air,” Bhakta says.

Bhakta, who lives in Atlanta, Ga., attended the Atlanta March for Social Justice and Woman in January, which was among hundreds of events the same weekend as the Women’s March on Washington. She says she’s scared about the possibility of losing coverage, especially the reproductive health care benefits, such as free birth control and pap exams.

3. Your deductible could go up

Proposed changes to the Affordable Care Act will create more leniency in how plans are classified. The greater leniency will allow for more diverse choices in the health care market, but could increase co-payments and deductibles for consumers.

All participating insurance plans have to cover 60% of out-of-pocket costs to qualify as a bronze-level plan, 70% for a silver plan, and 80% for gold. While the insurance plan pays for 70% of out-of-pocket costs for a silver plan, consumers would pay the remaining 30% through a combination of deductibles, co-pays, and co-insurance. Under the Obama administration, a two-point disparity was permitted, meaning that a plan could cover 68% of the costs and still qualify as a silver plan.

With Trump’s proposed changes to the Affordable Care Act, the disparity has been increased from 2% to 4%. Plans with only 66% coverage would still qualify as a silver plan.

It gives insurers a little more room to vary their plan terms,” Rylands says.

He adds that although there’s the potential for higher deductibles or out-of-pocket costs, the fact that the proposal extends it by only 2 percentage points means those increases will not be significant.

Already, Americans are showing they’re willing to pay for a plan with high deductibles in order to save money on premiums.

Over the last two years, enrollment in high-deductible health plans with a savings option by workers with employee-sponsored health insurance has increased 8 percentage points, to 29%, according to the 2016 Employee Health Benefits Survey by Kaiser Family Foundation and the Health Research and Educational Trust.

The survey found average premiums for those plans were “considerably lower” than the average for all plan types, at $5,762 for single coverage and $16,737 for family coverage.

4. You may have to be a bit more on the ball to enroll

The Trump administration’s proposal would cut the open enrollment period, typically three months, in half.

Under the new guidelines, those who need to enroll in health care for 2018 would have from between Nov. 1 and Dec. 15, 2017. Insurance coverage will end on Dec. 31, 2017, for all participants, no matter their enrollment date.

Not only would the open enrollment period be shorter, but the president has already slashed the advertising budget for Obamacare. Upon taking office, Trump cut $5 million in advertising days before the Jan. 31, 2017, enrollment deadline.

Enroll America, a nonprofit, nonpartisan organization that serves as the nation’s leading health care enrollment coalition, criticized the decision and its timing during the critical final days of the enrollment period for 2017. In a January statement, Anne Filipic, president of Enroll America, said, “their decision to halt outreach will have real impact on real people’s lives.”

Also last week, the Trump administration announced plans to place more stringent guidelines for the special enrollment period, in an effort to reduce the number of consumers registering outside the open enrollment period. For 2017, the enrollment period ran from Nov. 1, 2016, to Jan. 31, 2017.

The special enrollment period was originally meant for people who experience unexpected changes, such as unemployment, a new baby, or moving states. The Affordable Care Act allows consumers to enroll and submit proof later that they qualify for the special enrollment.

Insurance agencies have found that people signing up under the special enrollment period have higher health care costs, leading agencies to believe that Americans are signing up when already sick.

Under the proposed revisions, consumers will be required to provide proof before signing up for special enrollment.

Your providers could change

Proposed changes to the Affordable Care Act will also remove federal review of insurance networks. The networks were created by the Obama administration in response to complaints that there were too few providers accepting insurance policies purchased in the exchange.

The requirement for a minimum number of providers within a set distance from enrollees could be removed.

While this could reduce consumers’ access to health care within a reasonable distance, Rylands is hopeful it could allow more health insurance companies to continue providing services on the exchange.

“We’ll just have to wait and see if that happens though,” Rylands says.

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The Issue With Nixing the Affordable Care Act That No One Is Talking About

Without a replacement, millions Americans will lose health insurance — and that creates a moral hazard. Here's how.

Never mind his crowd-favorite pledge to build the Great Wall of Mexico with a “big, fat door,” President Donald Trump’s cornucopia of campaign promises included many a forgettable vow. But you had to be whale-spotting from a lily pad on Loon Lake to miss the president’s pledge to repeal the Affordable Care Act (ACA).

What may not be as obvious is the effect that such a move could have on crime — specifically medical identity theft.

Promises are often downgraded to “ideas” post-victory, but now that Candidate Trump is leader of the free world, it’s time to revisit this major pledge. One of the first things our new president did Friday was sign an executive order urging his administration to fight the ACA.

The executive order has no teeth. It simply states the Trump administration’s position, and, sure, that carries with it all the heft brought to bear by the Oval Office. But what is worrisome for proponents of the ACA is that the executive order follows current legislative efforts in Congress to obliterate the centerpiece of President Barack Obama’s legacy. With a newly installed majority, Republicans are poised to dismantle the historic law that helped 20 million uninsured Americans get affordable healthcare. Most recently, in a 227 to 198 vote, members of the House approved a budget that would kill major provisions of the ACA.

“This is a critical first step toward delivering relief to Americans who are struggling under this law,” House Speaker Paul Ryan said last week.

It’s hard to say exactly how many Americans would lose their health insurance should Obamacare go away, since Republicans have yet to outline a plan to replace it. However, a recent study from the non-partisan Congressional Budget Office (CBO) found a straight-up repeal would leave about 18 million people uninsured the following year.

It goes without saying the majority of those affected will not resort to a life of crime in order to acquire healthcare. In fact, it is unlikely, but should Congress, in concert with the Trump administration, repeal the ACA without providing a viable alternative, the sheer number of uninsured people will create a moral hazard — crimes will become a possibility where they would not have been — and this can only result in an uptick in the medical identity theft numbers.

What Is Medical Identity Theft?

As I explain in my book, Swiped: How to Protect Yourself in a World Full of Scammers, Phishers and Identity Thieves, medical identity theft is widespread, and potentially deadly.

While there is a long and sordid history of organized crime running healthcare-related scams whereby crooked doctors and garden-variety crooks team up to defraud insurers or get prescriptions for controlled substances that are then sold for recreational use, the theft of one person’s healthcare by another is a very real thing, and it can be life threatening.

Your medical records provide information that can be used in a variety of ways. For instance, once a criminal has your personal information and insurance details, he or she can use it, or enable another person to use it to gain access to the healthcare system in your name, and the result could be the contamination of your medical records with his or her co-mingled information.

Nothing is more dangerous than going to a hospital and having “your” medical records, as used by an identity thief or his/her “customer,” reflect an inaccurate blood type, medical history, or the existence or absence of certain allergies when you are receiving medical care, particularly in an emergency situation.

Another result of medical identity theft can be denial of service. If an impostor uses your insurance to gain access to healthcare, it can affect your own ability to access care: Many insurance plans have annual caps on certain types of procedures and treatments — and obviously no insurance company is going to pay for one person to have an appendectomy twice. An identity thief with access to your insurance could drain your coverage before you even know it’s happened and leave you in the lurch when you need it.

How to Prevent Medical Identity Theft

There are ways to defend against medical identity theft. Most involve proactive monitoring of your medical files. Many larger medical providers permit you to review your medical records by way of a secure website. If your doctor doesn’t offer such a service, you should sit with him, her or their staff at least once per year and review your files to confirm their accuracy. In addition, you should intently review any correspondence you receive from your health insurer, particularly Explanation of Benefit Notices, which will be the most immediate way to discover theft of services.

You should also review your credit reports at least once a year at AnnualCreditReport.com to make sure that all information is accurate. If you notice anything involving medical debt or a collection relating to a medical bill that is news to you, confirm its accuracy and that it’s not an indication you are a victim of medical identity theft.

You might also wish to keep track of your credit scores. Any sudden, unexplained drop could indicate a problem, and that issue might stem from medical identity theft. (You can view two of your free credit scores, updated every 14 days, on Credit.com.)

As for threats to the ACA, nothing has happened … yet. Lawmakers are still trying to figure out how to approach their stated goal of repealing Obamacare, and it won’t be easy. If you have concerns, you can call Speaker Ryan and other lawmakers who have vowed to do away with the ACA. As for the stated goal of repealing the ACA: An ounce of caution may be worth a pound of cure.

This story is an Op/Ed contribution to Credit.com and does not necessarily represent the views of the company or its partners.

Image: PeopleImages

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10 Myths About Obamacare and the Affordable Care Act

confused thinking woman with question mark

Like many politically divisive issues today, when it comes to the Affordable Care Act and Obamacare, it can be hard to separate fact from fiction.

The cornerstone of the ACA (aka Obamacare) is Healthcare.gov, home of the new health care marketplace. Nov. 1 marks the beginning of open enrollment for 2017. Americans have until Jan. 31 to choose a plan. We developed an in-depth guide to shopping on the marketplace, which you can find here. We also figured there could be no better time to revisit some of the misconceptions about the health care law that created it.

Below, we list 10 common myths associated with Obamacare.

1. I have to sign up for health insurance in the federal marketplace

The marketplace exists for people who do not receive health benefits through their employer, or a public program like Medicare, Medicaid, or the Children’s Health Insurance Program.

The ACA does require all Americans to have a qualified health plan, but that hasn’t stopped millions of Americans from going without. Just know that if you do not enroll in a health plan, you may face a tax penalty. There are exemptions for some groups of people. Some consumers choose to forego insurance for financial reasons — sometimes it costs more to pay for a health plan than to incur the tax penalty for not having insurance.

Before you give up on finding an affordable plan, check to see if you are eligible for a tax subsidy, which can drastically reduce the cost of your Obamacare premium.

2. Obamacare hasn’t changed the health care landscape all that much

The percentage of uninsured Americans fell to 10.5% from 16.6% since the implementation of the Affordable Care Act back in 2013. The U.S. is currently experiencing its highest rate of insured people ever in history, according to a report released by the Centers for Disease Control and Prevention in September. As of February 2016, 12.7 million Americans received health coverage through the marketplace.

There are five other big advantages of Obamacare:

  • Obamacare made it mandatory for insurers to cover certain preventive services such as cancer screenings and immunizations. Those services cannot count toward a patient’s deductible or require a co-pay.
  • The law also allows young adults to stay on a parent’s health insurance plan until they turn 26 years old — even if they get married, go to college, move away from home, or aren’t claimed on their parent’s taxes as a dependent anymore.
  • No lifetime caps on how much the insurance company will pay if you get sick.
  • Insurers can’t cancel your coverage midterm if you made a mistake on the paperwork.
  • The company can’t deny anyone because of pre-existing conditions like asthma or diabetes.

3. If I lose my insurance, I will have to pay a fee

It is true that some people will face tax penalties if they do not sign up for a qualifying health plan in a given year. But there are exceptions to this rule.

If you lose your job, you can purchase a plan in the marketplace outside of the open enrollment period. This applies even if you quit or get fired. If you can’t afford insurance and will be uninsured for a bit, you may qualify for a short-gap exemption and avoid the tax penalty. To qualify, you can be uninsured for no longer than two consecutive months. If you don’t qualify for any exemptions, you are then subject to a tax penalty for each month that you are uninsured.

4. I’ll have to wait longer to see my doctor if I have Obamacare

When the health care exchange opened, people worried that Obamacare patients would encounter the same service delays common among Medicaid and Medicare recipients. But evidence points to the contrary. The Commonwealth Fund, a private foundation that supports independent research on health care issues, found in its 2016 ACA Tracking Survey that wait times for those with Medicaid or marketplace coverage were similar to wait times for other insured adults. The survey found that 58% of adults with Medicaid or marketplace coverage who looked for a new primary care physician found it easy or somewhat easy to find one, and more than half of those surveyed waited less than two weeks to see a primary care physician. About 41% of those surveyed needed to see a specialist. Out of those, 60% got an appointment within two weeks.

5. If I sign up for Obamacare, I have to agree to a home inspection

This myth arose after a widely circulated August 2013 blog post claimed that the health care law would allow forced home inspections. There are no forced home inspections, or home inspections at all.

That blogger misinterpreted the Maternal, Infant, and Early Childhood Home Visiting Program (MIECHV), which was created with the ACA.

The program allows “at-risk” pregnant women or families to enroll in an optional home health care program that sends nurses to their homes. It gives moms who wouldn’t normally have access to prenatal advice access to advice and care in the comfort of their homes.

6. My boss might decrease my hours to avoid paying for Obamacare coverage

The ACA provision that requires employers with 50 or more full-time equivalent employees to offer health benefits went into full effect in 2016. There was worry that employers would decrease employee hours to reduce the number of full-time employees and avoid having to pay full health benefits (under the provision, employees are considered full time if they work 30 hours per week or more).

According to a report from the Kaiser Family Foundation earlier this year, only 2% of employers said they were going to change job classifications from full-time to part-time so that employees would not be eligible for health benefits, while 7% said they had changed or planned to switch part-timers to full-time so that they could qualify. The report also said 12% of employers were extending or planned to extend eligibility for health benefits to workers who were not currently eligible.

7. Only very poor people qualify for tax credits

Under the ACA, the majority of those who get health care through the marketplace are eligible for tax credits that can make the plans more affordable. About 8 in 10 people are eligible for $290 average monthly subsidies that can bring monthly payments down to less than $100. Some small businesses that offer health benefits to employees could be eligible for a credit as well to help with affordability.

It is true, however, that eligibility for the tax credit is determined by a host of factors, primarily household size and income. The IRS has a flow chart you can use to quickly see if you’d be eligible for the tax credit.

Premiums overall are getting more expensive, however, even for those with employer-sponsored health coverage. The rise is fueled by the rising cost of services, medicine, and other medical treatments. However, as premiums rise, subsidies rise, too, which can help offset the increase in cost.

8. I won’t be able to choose my own doctor anymore

Simply enrolling in a health plan through the exchange won’t mess with your choice of doctors. Your provider determines which doctors are accessible through your insurance plan. When policy conditions change — as they are apt to do when employers switch plans, people change or lose jobs, or when insurers alter plans — you’re not guaranteed that your doctor will still be in-network. Even when that happens, you may still be covered, but may have to pay more to go to a doctor outside of your network. If you’re concerned about this, ask your doctor which insurers they accept, and see if you can sign up for one of those plans through your employer or the marketplace.

9. If I like my plan, I can keep it no matter what

You can keep your plan as long as it complies with the ACA or was grandfathered in. However, nothing in the ACA promises that you can keep your plan no matter what. Your employer could switch plans, or you could lose or switch your job and lose your current plan, as it’s always been.

When the ACA went into effect, some insurance plans didn’t meet the minimum requirements of a Qualified Health Plan. Those plans were eventually phased out and replaced with ACA-compliant plans.

10. Most people were better off without Obamacare

The Affordable Care Act added important consumer protections that cannot be ignored. Before the act, insurers were able to deny coverage to people because they had a pre-existing condition. Now they can’t. Certain preventative care such as obesity, depression, domestic violence screening, and birth control, among many others now must be covered by insurance without a co-pay. Overall, more people are insured, and more services are being provided.

In its 2016 report, the Commonwealth Fund asked 4,802 working-age adults with Medicaid or marketplace coverage about the ACA. Of those, 881 were new to marketplace or Medicaid coverage. Only 11% of those new to the marketplace and 4% of those new to Medicaid said their ability to get care had worsened.

It is true that Obamacare patients are seeing higher premiums year after year, but they are not alone. Premiums are also becoming more expensive for people who receive employee benefits. According to a report released this year by the Kaiser Family Foundation, the average health care premium for an employer-provided family plan has jumped 58% over the past 10 years, while employee contribution toward the total premium has also risen 78%.

Some states will be especially hard hit by price hikes in 2017. The largest decrease in available plans was in Arizona, which lost six insurers. The state’s enrollees will see an average 116% price increase in 2017.

 

The post 10 Myths About Obamacare and the Affordable Care Act appeared first on MagnifyMoney.

Guide to Enrolling in an Obamacare Plan on Healthcare.gov

   obamacare Affordable Care Act paper family

Health insurance protects millions of Americans from paying full price for their medical expenses. But buying the right insurance isn’t an easy task for people looking to sign up for an Obamacare plan through the federal health insurance marketplace (Healthcare.gov). This year, the average consumer will have to wade through 30 unique plans from several different insurers to make their choice.

In this guide, we will cover the facts that you need to know when selecting an insurance plan through the federal health care exchange.

What terms should I know before I apply?

Understanding basic health insurance terminology can help you make a more informed decision about your options. These are the common terms you should know.

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Health care costs

Monthly premiums. The amount you pay each month for your health insurance.

Deductible. The amount you pay for covered health services before your insurer begins to cover part of your costs.

Out-of-pocket maximum/limit. The highest amount you will pay for covered services in a year.

Co-insurance. Your share of the costs of a covered health care service. This is the percentage you must pay out of pocket after you have met your annual deductible. You pay a specific co-insurance amount until you meet your out-of-pocket maximum.

Co-payment. A fixed amount you pay for a covered medical service, typically when you receive the service or prescription.

How these costs work together. Consider a scenario where you purchase an individual insurance policy with a $368 monthly premium, a $2,000 deductible, 20% co-insurance, and a $5,000 out-of-pocket maximum.

You will pay $4,416 in monthly premiums ($368 every month).

If you receive a $20,000 medical bill, you will pay:

  • $2,000 to cover your annual deductible (100% of costs up to $2,000)
  • $3,000 in co-insurance (20% of costs over $2,000 deductible until you hit your out-of-pocket maximum of $5,000)
  • $0 in medical costs after you hit your out-of-pocket maximum (in this case the additional $15,000 is covered by your insurance)

Total annual cost:

$5,000 to cover medical bills + $4,416 in monthly premiums = $9,416

Plan Types

Metal Levels. The health care exchanges — both federal and state-run exchanges — classify health insurance plans into four metal categories. The levels are bronze, silver, gold, and platinum. Metal categories are based on how you and your plan split the costs of your health care.

Bronze. Bronze plans offer the least amount of estimated coverage. Insurers expect to cover 60% of health care costs of the typical population. These plans feature the lowest monthly premiums, the highest deductibles, and high out-of-pocket maximum expenses.

Silver. Silver plans offer moderate estimated coverage. Insurers expect to cover 70% of health care costs, and plan members cover the remaining 30%. If you qualify for cost-reduction subsidies, you must purchase a silver plan to access this extra savings. In 2014, 67% of people who were eligible for a subsidy chose a silver plan.

Gold. Gold plans offer high levels of estimated coverage. Insurers expect to cover 80% of health care costs, while plan members cover the remaining 20%. These plans feature high monthly premiums, but lower deductibles and out-of-pocket maximums.

Platinum. Platinum plans offer the highest level of protection against unexpected medical costs. Insurers expect to cover 90% of medical costs, and plan members cover the remaining 10%. These plans have the highest monthly premiums and the lowest deductibles and out-of-pocket maximums.

EPO: Exclusive Provider Organization. Medical services are only covered if you go to doctors, specialists, or hospitals in the plan’s network (except in an emergency).

PPO: Preferred Provider Organization. You pay less for medical services if you use the providers in your plan’s network. You may use out-of-network doctors, specialists, or hospitals without a referral. However, there is an additional cost.

POS: Point of Service. You pay less for medical services if you use providers in the health plan’s network. You need a referral from your primary care doctor to see a specialist.

HMO: Health Maintenance Organization. These plans focus on integrated care and focus on prevention. Usually coverage is limited to care from doctors who work for or contract with the HMO. Generally, out-of-network care isn’t covered unless there is an emergency.

Provider Network. Most insurance plans have preferred pricing with a group of health care providers with whom they have contracted to provide services to their members.

Cost Savings

PTC: Premium Tax Credit. The federal subsidy for health insurance that helps eligible individuals or families with low or moderate income afford health insurance purchased through a health insurance marketplace.

APTC: Advance Premium Tax Credit. This credit can be taken in advance to offset your monthly premium costs. The subsidy is based on your estimated income and can be taken directly from your insurer when you apply for coverage. You must repay credits if you qualify for a smaller subsidy once taxes have been filed. You can learn more about repayment limitations here.

Cost Reduction Subsidies. If you earn between 100% and 250% of federal poverty line, you may qualify for additional savings. This extra savings reduces your out-of-pocket maximum, and it offers assistance with co-pays and co-insurance.

Individual Mandate (Tax Penalty). If you can afford to purchase health insurance and choose not to, you will be charged an individual shared responsibility payment, in the form of a tax penalty. There are a few qualified exemptions, but if you don’t meet those, you will be fined.

For the 2016 tax year, the individual mandate will be calculated two ways:

  • 2.5% of household income (up to the total annual premium for the national average price of the marketplace’s bronze plan)or
  • $695 per adult and $347.50 per child (up to $2,085)

You are responsible for the greater of the two.

Catastrophic Plans. People under age 30 or with hardship exemptions may purchase catastrophic health insurance plans. These plans offer very high deductibles (over $6,850) and high out-of-pocket maximums. Catastrophic plans may offer savings above the metal grade plans, but you can’t use a premium tax credit to reduce your monthly cost.

Preventative Care. All health insurance plans purchased through the health care exchange cover some preventative care benefits without additional costs to you. These benefits include wellness visits, vaccines, contraception, and more.

Government Health Plans

Medicaid. A joint federal and state program that provides health coverage to low-income households, some pregnant women, some elderly, and people with disabilities. Medicaid provides a broad level of coverage including preventative care, hospital visits, and more. Some states provide additional benefits as well.

Medicaid Expansion. The Affordable Care Act (ACA) gives each state the choice to expand Medicaid coverage to people earning less than 138% of the federal poverty line. The primary goal of the ACA is reducing the number of uninsured people through both Medicaid and the health insurance marketplace. The Kaiser Family Foundation keeps track of expanded Medicaid coverage by state.

CHIP: Children’s Health Insurance Program. This program was designed to provide coverage to uninsured children who are low income, but above the cutoff for Medicaid eligibility. The federal government has established basic guidelines, but eligibility and the scope of care and services are determined at the state level. Your children may qualify for CHIP even if you purchase an insurance policy through the health care exchange. You can learn about CHIP eligibility through the marketplace or by viewing this table at Medicaid.gov.

Who can buy insurance through a health care exchange?

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Since the introduction of the Affordable Care Act (ACA), most Americans can purchase health insurance through a health care exchange. However, incarcerated people and those living outside the United States cannot purchase insurance through the marketplace.

Most long-term, legal immigrants to the United States may purchase insurance. Healthcare.gov maintains a comprehensive list of qualified immigration statuses for purchasing insurance through the marketplace.

Just because you’re eligible to purchase insurance through the health care exchange doesn’t mean it’s the most cost-effective. That’s why it’s important to weigh all available health insurance options.

Will I qualify for a health care subsidy?

One major factor to consider when weighing the options is your expected subsidy. 85% of people who purchased insurance through a health care exchange qualified for a health insurance subsidy. The subsidy, or premium tax credit, brought average monthly premiums down from $396 to $106.

To qualify for a subsidy, you must meet three standards:

  1. You must not have access to affordable insurance through an employer (including a spouse’s employer).
    1. Affordable insurance for 2017 is defined as individual coverage through an employer that costs less than 9.69% of your household’s income.
    2. You can check that your insurance offers minimum value coverage by having your human resources representative fill out this form.
  2. You must have a household Modified Adjusted Gross Income between 100% and 400% of the federal poverty line.
    1. You can calculate Modified Adjusted Gross Income using this formula:
      Adjusted Gross Income (Form 1040 Line 37) +
      Nontaxable Social Security benefits (Form 1040 Line 20a minus Line 20b) +
      Tax-exempt interest (Form 1040 Line 8b) +
      Foreign earned income and housing expenses for Americans living abroad (Form 2555)
  1. You’re not eligible for coverage through Medicaid, Medicare, the Children’s Health Insurance Program (CHIP), or other types of public assistance. Some states have expanded Medicaid to anyone who earns up to 138% of the federal poverty line.

How can I calculate my subsidy?

The easiest way to calculate the subsidy you will receive is to use a subsidy estimator from Healthcare.gov or the Kaiser Family Foundation. Both calculators estimate your subsidy based on the information you provide. They also help you understand what factors affect your subsidy estimations.

Your income, household size, and the cost of premiums in your state factor into your subsidy. Premium tax credits can help reduce the amount that you will spend on monthly premiums to a set percentage of your income. This subsidy can bring the marketplace’s silver plan into the affordable range set by the Affordable Care Act.

The price of your silver plan determines the subsidy you receive, but you can use this same subsidy for other plans as well. For example, if you purchase a gold plan, you will spend no more than 9.56% of your income on premiums.

Below you can see the maximum amount you will spend on insurance premiums based on your income.

For an Individual

% of Poverty Line (2016) Income (Based on 2016 Federal Poverty Line) Max Silver Premiums as a Percent of Income Max Monthly Silver Plan Premium Cost after Subsidies Special Notes
100%-138% Lower 48 States:
$11,880-$16,394
Alaska:
$14,840-$20,479
Hawaii:
$13,670-$18,865
2.03%-3.35% Lower 48 States:
$20.08-$45.77
Alaska:
$25.10-$57.17
Hawaii:
$23.13-$52.66
Check if you qualify for expanded Medicaid.
139%-250% Lower 48 States:
$16,513-$29,700
Alaska:
$20,627-$37,100
Hawaii:
$19,001-$34,175
3.41%-8.18% Lower 48 States:
$46.93-$202.45
Alaska:
$58.62-$252.90
Hawaii:
$54-$232.96
You may qualify for cost-reduction subsidies if you purchase a silver plan.
251%-400% Lower 48 States:
$29,819-$47,520
Alaska:
$37,248-$59,360
Hawaii:
$34,312-$54,680
8.21%-9.66% Lower 48 States:
$204.01-$382.54
Alaska:
$254.84-$477.85
Hawaii:
$234.75-$440.17
If you earn more than 400% of the poverty line, you will not qualify for subsidies.

For a Family of Four

% of Poverty Line (2016) Income (Based on 2016 Federal Poverty Line) Max Silver Plan Premiums as a Percent of Income Max Monthly Silver Plan Premium Cost after Subsidies Special Notes
100%-138% Lower 48 States:
$24,300-$33,534
Alaska:
$30,380-$41,924
Hawaii:
$27,950-$38,571
2.03%-3.35% Lower 48 States:
$41.11-$93.62
Alaska:
$51.39-$117.04
Hawaii:
$47.28-$107.68
Children will qualify for CHIP. Check if you qualify for expanded Medicaid.
139%-200% Lower 48 States:
$33,777-$48,600
Alaska:
$42,228-$60,760
Hawaii:
$38,851-$55,900
3.41%-6.41% Lower 48 States:
$95.98-$259.61
Alaska:
$120-$324.56
Hawaii:
$110.40-$298.60
Children in 46 states will qualify for CHIP. You may qualify for extra savings if you purchase a silver plan.
201%-250% Lower 48 States:
$48,843-$60,750
Alaska:
$61,063-$75,950
Hawaii:
$56,180-$69,875
6.45%-8.18% Lower 48 States:
$262.53-$414.11
Alaska:
$328.22-$517.73
Hawaii:
$301.96-$476.31
In some states, children will qualify for CHIP. You may qualify for extra savings if you purchase a silver plan.
251%-400% Lower 48 States:
$60,993-$97,200
Alaska:
$77,383-$121,520
Hawaii:
$70,155-$111,800
8.21%-9.66% Lower 48 States:
$417.29-$782.46
Alaska:
$529.43-$978.24
Hawaii:
$479.97-$899.99
In a limited number of states, children qualify for CHIP up to 375% of the poverty line. If you earn more than 400% of the poverty line, you will not qualify for subsidies.

What circumstances might affect my eligibility for a subsidy?

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Your subsidy can change if your circumstances change. It’s important to plan ahead if any of these special circumstances apply to you.

Families with kids. In most states, if you earn less than 200% of the poverty line, your kids will qualify for the Children’s Health Insurance Policy (CHIP). If your children qualify for CHIP, you cannot purchase subsidized insurance for them, but your individual coverage may still be subsidized.

Families where one spouse has work coverage. Some employers only offer health insurance to their employees. Spouses and children cannot get coverage through work. In that case, you can purchase insurance with a subsidy through the marketplace exchange.

Families with expensive employer coverage. If you can purchase family coverage through your or your spouse’s employer, then you will not qualify for subsidies. The tax code states that if an employee can gain individual coverage for himself or herself for less than 9.69% of total household income, then the insurance is considered affordable. Coverage for the family isn’t factored into the affordability calculation.

The so-called “family glitch” traps 2-4 million people and requires them to pay high prices for premiums. If you are caught in this situation, your children may qualify for CHIP. However, uncovered spouses and children must purchase insurance or pay the individual mandate penalty.

Minnesota Senator Al Franken has proposed a Family Coverage Act that may rectify the tax code, but it has not been passed.

Getting married in 2017. If you’re getting married in 2017, your subsidy depends on your combined income. In the months preceding your marriage, your income is one-half of your and your spouse’s combined income. Once you get married, your subsidy is based on your joint income and your qualifying family.

You need to report a marriage to be eligible for a special enrollment period on Healthcare.gov or your state’s insurance exchange.

Getting divorced in 2017. If you get divorced or legally separated in 2017, you must sign up for a new health insurance plan after you separate. Your subsidy will be based on your income and household size at the end of the year. However, you will need to count subsidies received during your marriage differently than subsidies received when you’re legally separated.

For the months you are married, each spouse divides advanced subsidies received to each new household. If spouses cannot agree on a percentage, the default is 50%. If the plan only covered one taxpayer and his or her dependents, then the advanced tax credits apply 100% to that spouse.

Divorce reduces your income, but it also reduces your household size. These factors change your estimated subsidy in opposite directions. Your subsidy changes will depend on the magnitude of each change.

Reporting a divorce makes you eligible for a special enrollment period. When you enroll in a new plan, the exchange website will help you estimate your new subsidy for the remainder of the year.

Giving birth or adopting a child. You have 60 days from the birth or adoption of your child to enroll them in a health care plan. If you miss this window, your child will not have health coverage, and you will pay a penalty. However, if you enroll your child in a timely manner, you can expect your subsidy to increase.

Report the birth or adoption of a child to be eligible for a special enrollment period on Healthcare.gov or your state’s insurance exchange.

Turning 26. If you’re on your parents’ insurance, generally you can stay until you have turned 26, but you should check your plan to be sure. You will have a 60-day special enrollment period to get your own plan from the health care exchange when you turn 26.

You may also be eligible for a special enrollment period from an employer-sponsored health plan. If you fail to have health insurance for more than three months, you will pay a penalty.

Losing employer coverage. If you lose employer-based health coverage, you can either enroll in COBRA or purchase a plan through the health care exchange. Once you enroll in COBRA, you become ineligible to purchase subsidized coverage through the exchange.

You need to report job status changes to be eligible for a special enrollment period on Healthcare.gov or your state’s insurance exchange.

Changes in income. Premium tax credits are based on your annual income. If you increase your income, you will be expected to pay back some or all of the advanced premium you received. If you earn more than 401% of the federal poverty line, all premiums need to be repaid. If you earn less than 400% of the federal poverty line, you may have to pay back $2,500 of advanced premiums per family or $1,250 for individuals.

You need to report income changes to avoid under- or overpaying your premiums throughout the year.

Moving. Most insurance plans that you purchase through the marketplace are state and county specific. If you move, you need to report the move through the insurance exchange.

Moving may affect your subsidy (if you move to or from Alaska or Hawaii), but it does affect the plans available to you.

How do I apply for insurance?

Applying for insurance takes 30-60 minutes if you have all the necessary information ahead of time. This is what you should gather before you apply:

  • Names, birthdates, and Social Security numbers for all members of the household
  • Document numbers for anyone with legal immigration status
  • Information about employer-sponsored health plans
  • Tax return from previous year (to help predict income)
  • Student loan documents
  • Alimony documents
  • Retirement plan documents
  • Health Savings Account documents

The website interface for the federal exchange is simple, but answering the questions may be confusing. It’s important to fill out the application as accurately as possible so you can enroll in the best health insurance plan for you.

We’ve done our best to clarify the confusing portions in our step-by-step process below.

A note on state-run health care exchanges

Each state has the right to choose whether to run their own health care exchange, or to use Healthcare.gov, the federally run exchange. Seventeen states run their own health insurance exchanges.

The state-run exchanges perform the same functions as the federally run exchange. They allow you to estimate your tax credit and to purchase insurance. As a consumer, you must provide the same information to your state as you would on the federal exchange.

While the online user experience will vary when states adopt their own online marketplace, the Affordable Care Act is a federal law and a federal program. This means that the requirements and benefits do not change from state to state even if the exchange platform changes. If you have trouble navigating either the state or federally run health care exchange, you can get free help from knowledgeable experts.

Family and Household Info

Start the application by filling out contact information and basic information about members of your household. Even if a member of your family will not need coverage, include them in your application.

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The website will help you determine if a member of your household has insurance options outside of the health care exchange. It will also help you determine if a person is a dependent. For the purpose of the health care exchange, your family includes all the people included on your income tax filing.

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You need to know Social Security numbers, birthdates, immigration status, disability status, and whether each household member can purchase health insurance through an employer plan.

Income and Deductions

Next, you’ll estimate your income for the upcoming year. Include all the following forms of income:

  • Jobs
  • Self-employment income (net)
  • Social Security benefits
  • Unemployment income
  • Retirement income
  • Pensions
  • Capital gains
  • Investment income
  • Rental/royalty income
  • Farming and fishing income
  • Alimony received

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Afterward, you’ll enter deductions. The application calls out student loan interest and alimony paid, but you should estimate all “above the line deductions” that should be included. These include:

  • Retirement plan contributions: 401(k), 403(b), 457, TSP, SEP-IRA, simple IRA, traditional IRA
  • Contributions to a Health Savings Account
  • Self-employed health insurance premiums
  • Tuition and fees paid
  • Educator expenses (up to $250 per teacher)
  • Half self-employment tax
  • Moving expenses
  • Early withdrawal penalties from a 1099-INT

Do not double-count income or deductions since you’ll fill out these forms for each person. If you make a mistake, you can edit it when you review your household summary.

Additional Information

Finally, you’ll fill out a few other miscellaneous details that will allow the application to confirm that you are eligible for subsidies or marketplace insurance.

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It’s especially important that you have accurate information about job-related coverage for you and your family. This information will determine your eligibility for subsidies and other government programs.

Completing Enrollment

After you complete the application, you can review and submit it. At this point, the system will suggest which members of your household should complete CHIP or Medicaid applications. The remaining family members can enroll in a health insurance plan.

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How do I decide what plan type is best for me?

Before you choose a plan, you’ll decide whether to receive advanced or deferred subsidies. Most people with predictable income and household size should take most or all of the subsidy upfront. However, if you expect to undergo a major life change (such as an increase in income, a marriage, or a divorce), consider taking less of your subsidy in advance.

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Then you can look for a plan. For people shopping for 2017 coverage, the average number of plans available is 30. Rather than comparing every plan, we recommend creating criteria around the following variables:

  1. Monthly cost. Consider how the monthly premium will affect your budget. This does not mean you should choose the plan with the lowest premiums, but you should consider the price. People without chronic conditions who have adequate emergency savings may consider opting for low monthly premiums.
  1. Deductible and co-insurance. Do you have the emergency fund or income you need to cover a small medical emergency? A broken arm, stitches, or an unexpected infection can lead to hundreds of dollars in medical costs. If you have a high-deductible plan, you’ll need to cover these costs without help from the insurance company. If possible, choose a plan with a deductible that you could comfortably cover out of your savings or income.
  1. Maximum yearly cost. Add the annual cost of your premiums plus your out-of-pocket maximum to determine your maximum yearly cost. In a worst-case scenario, this is the amount you will pay out of pocket. People with chronic conditions that require heavy out-of-pocket fees should try to limit their maximum yearly cost. A plan with a higher maximum yearly cost may represent a higher risk.
  1. Services and amenities. All insurance plans from the marketplace cover the same essential health benefits, but some plans will offer unique services such as medical management programs, vision, or dental coverage. High-deductible health plans allow you to contribute to a tax-advantaged Health Savings Account.
  1. Network of providers. It’s important to be sure that your preferred medical providers contract with the plan you choose. Not every doctor is “in network” with every insurance plan. You can check each plan’s provider directory before you choose the plan.

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Once you determine your criteria, look for plans that fit your needs and ignore the rest.

Using the exchange website, you can filter and sort plans based on these factors. Most people need to balance cost and coverage to find a plan that works for them.

Where do I get help for free?

Due to the complex nature of the marketplace exchange, the exchange provides marketplace navigators. Marketplace navigators are professionals who provide free, unbiased help to consumers who want help filling out eligibility forms and choosing plans. You can find local marketplace navigators through the health care exchange website. Most of the time you can find someone who speaks your language to meet you in person.

Outside of the exchange, nonprofit organizations are working to help people gain coverage by teaching them about their insurance options. Enroll America offers free expert assistance to anyone who makes an appointment with in-person application assistance. You can use the connector below to make an appointment with one of their experts.

Insurance brokers can offer another form of help. Brokers aim to make it easier for consumers to apply for and compare insurance plans. Insurance brokers have relationships with some or all of the insurance companies on the marketplace. Using a broker will not increase the price you pay for a plan, and it will not affect your subsidies. However, online brokers may not have 100% accuracy regarding a plan’s details. It’s important to visit a plan’s website before you enroll in a plan.

If you want to work with a broker, consider some of these top online brokers. PolicyGenius compares all the plans that meet criteria that you establish, and they serve up the top two plans that meet those criteria. HealthInsurance.com makes applications quick and easy, and the site specializes in special enrollment help.

What happens if I don’t apply for insurance?

In most cases, you must enroll in health insurance or you’ll have to pay a penalty.

The penalty for 2017 hasn’t yet been released, but the 2016 penalty was calculated as the greater of 2.5% of your income (up to the national average cost of a bronze plan) or $695 per adult and $347.50 per child (up to $2,085). This steep penalty means that most people will be better off purchasing some health insurance.

However, under certain circumstances you can avoid buying insurance and dodge paying the penalty. These are a few of the most common exemptions:

 

  • Member of a qualifying health care cost-sharing ministry (501(c)(3) whose members share a common set of ethical or religious beliefs and have shared medical expenses in accordance with those beliefs continuously since at least December 31, 1999.
  • Low income, no filing requirement: If you do not earn enough income to file taxes, then you are automatically exempt from paying a noncoverage penalty.
  • Coverage is unaffordable. For 2017, if you cannot obtain individual employer coverage or a bronze plan for less than 9.69% of your income (after applicable subsidies), you may opt out of coverage.
  • Joint individual coverage is unaffordable. For 2017, if you and your spouse combined cannot obtain individual employer coverage or a bronze plan for less than 9.69% of your income (after applicable subsidies), you may opt out of coverage.
  • Short coverage gap (you went without insurance for less than three months).
  • Lived abroad for at least 330 days.
  • General hardships such as homelessness, eviction, foreclosure, unpaid medical bills, domestic violence, and more (exemption must be granted through a marketplace exemption).
  • Unable to obtain Medicaid because your state didn’t expand Medicaid (exemption must be granted through the marketplace).
  • Received AmeriCorps coverage (exemption must be granted through the marketplace).
  • Members of qualified religious sects who do not obtain government benefits (exemption must be granted through the marketplace).

Although you will not pay a penalty, you may still want to seek out catastrophe insurance or some other insurance to help you deal with high potential health costs.

What happens if my plan was canceled?

Recently, some insurers dropped their insurance plans from the health care exchange. As a consumer, you cannot assume that the plan you chose in the past will be around next year. Unlike previous years, you will not qualify for an exemption if your plan dropped in 2017. This means that you may need to purchase new insurance or pay a penalty.

Even if your plan remains in place, important variables like the deductible, the premiums, or the coverage may have changed.

Whether you’re shopping for a new plan, or reviewing an old plan, take these steps before open enrollment ends.

  • Update your personal information on your application. Your income, household size, where you live, and more will affect plan and subsidy eligibility. It’s important to keep your application up to date. The plan that fit you last year may no longer be appropriate, but you won’t know unless you keep the information current.
  • Review your plan before you re-enroll. You should receive a notification in the mail if your plan has been changed or canceled. Take the time to understand if the changes affect you.
  • Compare plans that fit your needs. Consider enlisting free help from a health care navigator, a nonprofit, or a broker to help you decide.
  • Choose the plan that best fits your needs and your budget.

Work to make the most informed decision possible

Choosing a health plan seems like a daunting task, but you can get all the help and information you need to make an informed decision. Your health and your pocketbook matter, and we want to help you protect both.

The post Guide to Enrolling in an Obamacare Plan on Healthcare.gov appeared first on MagnifyMoney.

Here’s How Much More Your Obamacare Plan Will Cost in 2017

Cost of healthcare medical bills doctor

As widely expected, millions of Americans who rely on Obamacare for health insurance will face higher premium costs going into 2017. Premiums will rise 25% on average, according to a new report released by the U.S. Dept. of Health and Human Services. That’s the one of the largest year over year spikes premiums have seen since the marketplace opened in 2013.

A 27-year-old woman who paid $242 for a benchmark silver plan in 2016 will now face a premium of $302 before tax credits. The silver lining here is those three words: before tax credits. Roughly 85% of Obamacare customers currently qualify for tax credits that can offset the cost of their premiums. The average subsidy in 2016 was $290/month. Tax credits can help offset rising premium costs, but they depend largely on household size and income. Beginning in November, consumers can calculate their tax credit for 2017 here.

How much premiums will rise depends largely on the state where consumers are shopping. In states where major insurers have exited the federal marketplace, premiums will see much higher gains. Further contributing to rising premiums, insurers are now raising prices in order to recoup losses they’ve incurred since entering the Marketplace in 2013. For example, BlueCross BlueShield reversed its decision to exit the marketplace in parts of Arizona in September. But as a condition of its decision to stay in the marketplace, the company said it would raise premiums by more than 50%. The company will have very little competition this year. Arizona lost a total of 6 major insurers this year, bringing the total number of insurers offering plans on the marketplace from 8 to only 2.

Arizona customers will feel those price hikes now. A 27-year-old in Arizona will pay a whopping 116% more for a benchmark silver plan in 2017, according to HHS.

Minnesota consumers relying on Blue Cross Blue Shield for coverage were also unlucky this year. Citing losses of $500 million over its three year run on the state’s exchange, BCBS decided in June to pull all but one plan from Minnesota’s state-run healthcare marketplace, leaving more than 100,000 Minnesotans without plans. The benchmark silver plan will rise an average of 59% for a 27-year-old in Minnesota going into 2017.

The silver lining

The government report focused largely on positive news for Obamacare consumers going into 2017.

Three-quarters of Marketplace customers in states using the federal health care exchange (Healthcare.gov) will be able to find plans with a monthly premium under $100 after factoring in tax credits. On average, these consumers will have 30 different insurance plans to choose from.

But the number of individual insurers offering plans in states has decreased in many states. Pennsylvania and Ohio each lost five insurers. Arizona lost six, the largest loss of any state. In several states, including Alaska, Arkansas, Wyoming, and South Carolina, only one major insurer offers plans on the marketplace. When there are fewer insurers operating in a given state, there is less competition and, as a result, potentially higher rates for consumers.

The Bottom Line:

This all means one thing for Obamacare consumers facing open enrollment Nov. 1: It is more important than ever to shop around and compare plans. If customers don’t shop around, they will simply be re-enrolled in their 2016 coverage. And if their 2016 plan is no longer available, the marketplace will stick them in a similar plan that could cost much more.

“In 2017, more than 7 in 10 (76 percent) current Marketplace enrollees can find a lower premium plan in the same level by returning to the Marketplace to shop for coverage rather than re-enrolling in their current plan,” according to the report.

MagnifyMoney has several tips for people who found out that their Obamacare plan has been dropped.

The open enrollment period of marketplace health plans is a crucial time to save and select the right coverage for your family’s needs. Open enrollment for Obamacare consumers begins November 1 and ends January 31. You can shop for plans in advance right now by visiting Healthcare.gov or your state insurance marketplace.

Source: HHS
Source: HHS

The post Here’s How Much More Your Obamacare Plan Will Cost in 2017 appeared first on MagnifyMoney.

Stuck With a High Deductible Health Plan? Here’s How to Save

child and doctor talking in clinic
The majority of Americans receive health care through an employer-provided health plan, new Census Bureau data shows. But thanks to rising premium costs and ever-increasing deductibles, health coverage — even if your employer covers part of your tab — can easily feel more financially burdensome than beneficial.

Annual premiums rose most significantly for employer-provided family plans in 2016, according to a survey released Wednesday by the Kaiser Family Foundation. The average annual workplace family health premium rose to $18,142 in 2016, a 3% increase. This is a slowdown from last year’s 4% hike, but family premiums are still 58% higher than they were just a decade ago.

But sticker prices on annual health plan premiums — $18,142 for families and $11,480 for individuals — only tell half the story.

Employers commonly make contributions toward their workers’ health care premiums. But employers have contributed less and less to annual premium costs over the last decade, leaving families footing larger portions of their coverage. For example, workers now pay 78% more in annual premium contributions for family coverage than in 2006, according to Kaiser.

Here are other ways rising health costs are impacting consumers:

Out-of-pocket costs continue to soar. In 2016, 29% of all workers were in high-deductible plans, up from 20% in 2014. The average annual deductible for individuals climbed 12% year-over-year to $1,478. Families endured even higher out-of-pocket costs.

Premiums have also outpaced inflation and earnings increases over the past five years, 6% and 11%, respectively, according to Kaiser’s report.

What you can do to save if you have a high-deductible health plan.

Look at more than just the sticker price

Plan premiums can be deceiving. Even if a plan’s premium looks more affordable, it will likely have a higher deductible, meaning your out-of-pocket costs could be much more in the long run. Sophie Stern of Enroll America, a health care advocacy nonprofit, recommends reading plan offerings closely before you sign up.

“First and foremost employees should reach out to their employer to gain a better understanding of their plan options and covered benefits, including how much they will have to pay out of pocket for their health care,” Stern says. “If already enrolled in coverage, employees can also contact their insurance company directly.”

Take advantage of health savings accounts

If your deductible is higher than $1,250 for individuals or $2,500 for families, you likely have access to a health savings account (HSA). HSAs let workers set aside pre-tax dollars for medical expenses. Some employers provide Health Reimbursement Arrangements (HRAs), in which case the employer would reimburse its employees for out-of-pocket medical expenses and individual health insurance premiums.

Sign up for a health risk assessment or biometric screening

Many large firms offer financial incentives like cash, reduced premiums, and other benefits for undergoing a health risk assessment or biometric screening. Kaiser found that most large firms offer health risk assessments (54%) and biometric screenings (53%) for workers. Health risk assessments ask questions about your medical history, health status, and lifestyle, while biometric screenings measure things like body weight, cholesterol, blood pressure, stress, and nutrition.

Some things in health care are free

Under the Affordable Care Act, many preventative care services are free to you. Be certain to make sure they are coded properly at your doctor’s billing office so you are not incorrectly billed.

Pay cash

Some health care providers offer to charge a lower fee for some treatments if patients pay cash upfront. You can also ask for a low- or no-interest installment plan if you can’t afford the full cost upfront.

Plan ahead

One of the nastiest surprises at the doctor’s office can be an unexpected bill because your physician is not covered by the insurer’s network. Verify that a provider accepts your insurance before you go, either by calling or by checking your plan provider’s website. Once you find a provider that accepts your insurance, Stern recommends calling before you visit to get a sense of how much your treatment will cost.

Be proactive. Ask how much services will cost before your appointment. Make sure to ask about cheaper options and the pros and cons of comparable services before you get there and about the price of drugs before leaving with a prescription.

Compare and save

Prices for medical treatments are notoriously opaque. Sites like cms.gov and clearhealthcosts.com have made it easier to shop around for certain routine treatments (such as an MRI or teeth fillings). Some services, like smartshopper.com, will even pay you to shop around for lower cost treatments.

Lower your medication costs

Ask for a generic prescription if you’re getting medication. Generic prescriptions cost anywhere from 80% to 85% less than brand name medications, according to the FDA. You can also browse sites like GoodRX.com and needymeds.org to compare and save when it comes to your prescriptions.

If you aren’t covered by your employer and you’re shopping for health coverage, there are resources that can help. Through Enroll America’s Get Covered Connector, you can schedule an appointment with an expert near you who can walk you through the process.

 

 

The post Stuck With a High Deductible Health Plan? Here’s How to Save appeared first on MagnifyMoney.

The $600 Savings Some Americans Are Getting From Obamacare

obamacarelowincome

Love it or hate it, Obamacare seems to be working, at least for low-income Americans who otherwise wouldn’t have access to healthcare.

That’s according to a working paper published Monday by the National Bureau of Economic Research, which found that offering health insurance to these consumers helped them avoid insurmountable debt. For those newly covered by Medicaid since 2014, the study says, their medical debt was reduced by about $600 to $1,000 each year.

Credit.com has extensively covered the damage medical debt can wreak on one’s credit profile. Some hospitals or medical providers offer expensive credit cards with introductory rates that quickly ramp up to over 20% and patients can get taken to court over bills they can’t afford to pay. In some cases, spouses of patients have been pursued for payment even though they didn’t live in a common law state.

“I just turned 26, and I can’t even get a new contract with AT&T without a $750 security deposit, let alone finance a new (used) vehicle,” Richard Barnes told the New York Times recently. He was reportedly uninsured when he was diagnosed with appendicitis three years ago. “When I was moving in May 2015, I had extreme trouble finding someone who would rent to me.”

Inside the Study

As the Times reported, the new study examined credit reports on a sample of Americans across the country. Researchers then compared debt incurred by people in two different sets of states: “those that expanded Medicaid to provide free insurance to those earning under about $16,000,”and those that either “chose not to cover that population or had expanded their programs earlier.”

The researchers honed in on the 25% of ZIP codes with the highest percentage of low-income, uninsured people before 2014 to compare debt incurred by those in the unchanged states with the debt of those in states offering new insurance options.

Turns out, Medicaid expansion did affect how many bills were sent to collections and the amount they were for. Researchers arrived at their $600 to $1,000 estimate by using the American Community Survey to approximate that 17% of individuals in the measured areas were uninsured and had incomes below 138% of the federal poverty level.

“If we assume that half of this group gained coverage as a result of the Medicaid expansions and scaled our estimates by this figure, the implied treatment-on-treated (TOT) estimates range between -$600 and -$1,000,” the report said.

The study did have two caveats: It could only examine those with credit reports and couldn’t pinpoint exactly who got Medicaid. As the Times put it, “Instead, it tracked everyone in the places where researchers anticipated the biggest changes in Medicaid enrollment.”

If you have outstanding medical bills, it’s a smart idea to review your free annual credit reports for accuracy and dispute any errors you find. You can also view two credit scores for free, updated monthly, on Credit.com.

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Image: Jupiterimages

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