Victor Hazy: Obamacare will mean changes big and small
Published: Sunday, July 7, 2013 at 6:01 a.m.
Last Modified: Wednesday, July 3, 2013 at 11:35 p.m.
The federal Affordable Care Act means that your health insurance will change in 2014. Exactly how will depend on who you are.
I will briefly cover the changes for a variety of groups, concluding with a broader explanation of the changes in the law that will affect everyone.
1. If you are young and single, the act really is all about you. If the young invincibles who rarely go to doctors and hospitals do not purchase health insurance, it is difficult to see where the money to pay the claims of older and sicker people will come from.
On the one hand, you will be subject to a penalty ($95 in 2014, $695 and more for higher incomes in 2016), if you do not carry health insurance. On the other hand, many young people do not make a lot of money and can qualify for subsidies by getting their insurance through the exchanges.
The exchanges will start Oct. 1 with a Jan. 1 effective date. You can get help from an experienced independent agent to help you find the appropriate plan for your situation. It will cost the same whether you try to figure it out on your own or if you have an agent of record who is paid by the insurance company.
2. Families with current insurance may see additional cost increases as policies will be required to cover juvenile dental and have a maximum family deductible of $4,000, among other mandates. But subsidies, for up to 400 percent of the federal poverty level, will be available on the exchanges. This comes to $94,200 for a family of four.
3. Older people (You know the old joke about what is old age? It’s 15 years older than your current age.) who are currently paying the highest rates and people with pre-existing conditions who are paying a rate that higher than that lowest preferred rate may find future rate increases moderated by the 3-to-1 rule.
This says that you can’t be charged more than three times the rate that younger people pay. Actuaries say claims in this group are more than four times higher.
4. Folks who currently have employer group coverage should not see major changes, since groups already do not underwrite for health issues and include coverage for many of the mandates under Affordable Care Act such as maternity coverage.
5. Those with Medicare and Medicaid and in large employer group plans will be precluded from going on the exchanges and will be largely unaffected by the new law.
6. Those with pre-existing conditions that have prevented them from obtaining coverage will be the big winners, since companies will no longer be allowed to ask medical questions. These folks can get coverage effective Jan. 1 and have their ongoing medical bills paid by the insurance company.
7. Small business owners with under 50 full-time equivalent employees will not have to offer health insurance, but if they do, they may qualify for tax credits of 35 percent of the health insurance premiums in 2013 and 50 percent in 2014, if they meet certain guidelines. So, only employers with more than 50 employees will be subject to a penalty for not offering health insurance, but all employees of small and large businesses will be subject to the individual mandate penalties.
8. Smokers will be socked with a 50 percent surcharge, but will have free smoking cessation programs as part of their health insurance coverage.
How does this affect you? Are you in more than one of the above categories?
Some broader effects will be felt by everyone. Health insurance for folks under age 65 will look a lot more like what people on Medicare currently have. People on Medicare can get insurance with no health questions.
If they don’t get it when they qualify, they have to wait for open enrollment. Open enrollment for folks under age 65 will start Oct. 1 for a Jan. 1 effective date. For this initial period, open enrollment will end March 31, 2014; for 2015, it will end Dec. 31, 2014.
Health insurance exchanges will be available for people who qualify for a subsidy starting Oct. 1. The federal poverty level is $11,490, plus $4,020 for each additional family member. Up to four times the federal poverty level will qualify for some level of subsidy. This is an adjusted gross income of $110,280 for a family of six.
It is estimated that two thirds of families will qualify for a subsidy. So, it is well worth your time to sit down with a Florida licensed independent insurance agent to find out what you can qualify for.
If you do not qualify for a subsidy, you can find a qualified health plan with any of the major insurance companies. Most importantly, everyone should get established with a doctor today, while they are still taking new patients.
About 1.7 million people in Florida are expected to get health insurance in 2014 who are currently not insured out of a pool of 5.2 million uninsured. And remember to keep informed, since the Department of Health and Human Services is currently writing the rules that go into effect Oct. 1.
Victor Hazy is a Gainesville insurance agent who has been in the industry for 33 years.