Can You Save on Healthcare this year?

*** Updates – wow, since I posted this summary of the Affordable Care Act almost 3 months ago, quite a bit has changed.  Firstly, today is the “deadline” to sign up for health insurance if you don’t have it through your employer.  Note that I put deadline in quotes… why?  Because the March 31 deadline has been extended, sort of.  Today, you may have seen reports of the healthcare.gov website crashing throughout the morning and afternoon.

Well… the administration saw this coming and prepared a solution for those who had begun the process but were hung up due to technical delays.  They said that the new deadline is mid-April, and all you would have to do is check a box claiming that you began the process but couldn’t finish.  But the administration has also said that they will not verify whether or not you actually started the process prior to March 31.

How are Lauren and I doing with all of this?  Fine.  We are participating in a faith-based healthcare sharing program called Christian Healthcare Ministries, and all is going well so far.  These types of programs are available and can be a very affordable alternative, particularly for the self-employed.

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Whether or not you are for or against the Affordable Health Act (ACA), 2014 is here; and healthcare is different this year.  It might affect you in a big way, and it might not affect you at all.  You may have heard about huge premium increases, people getting dropped from their insurance, news about the Martketplace enrollment (formerly called the Exchange)… I will try to sort it all out for you (leaving the politics out of it!) and help you determine how you can expect to be financially impacted in 2014 and beyond.

Firstly, people have been asking Lauren and me what we are doing for health insurance since I have recently left my job.  [Speaking of which, my previous job was as a healthcare consulting actuary, and I’ve spent literally hundreds of hours over the past couple  years reading regulations and discussing the ACA with clients and how to prepare for it].  Yes, my previous employer had a great group health insurance plan, and no, ‘I am THAT Lady’ currently doesn’t offer coverage.  That was obviously a huge consideration for us when we made this decision.  Throughout the post, I’ll share what we are doing.  But yes, we are certainly covered.

 

Now that the boring stuff is out of the way, here are some common questions:

So how does the ACA affect me?

That depends on your situation:

• If you are currently employed and receive coverage through your employer, you will probably not be impacted much this year.  Political opponents of the ACA warned that employers would drop coverage en mass in 2014… but that didn’t occur.  Employers (with more than 50 employees) will pay huge penalties if they don’t offer coverage (not to mention bad press).  So most are staying the course.  Even with relief offered that will allow employers to offer coverage to only 70% of full-time employees in 2015, most employers are keeping coverage, but making adjustments.
• If you do not receive coverage through your employer, or are self-employed, then you WILL be affected.  All individual insurance policies are now being funneled through the Marketplace.  So if you wish to purchase insurance, you will need to enroll through the Marketplace in your state.  Depending on your household income and how many dependents you have, you may be eligible for government subsidies to help pay for the premium cost.

Will my costs go up or down?

Again, that depends.

• If you are currently employed and receive coverage through your employer, some of the increase is undoubtedly directly because of the ACA.  There are some fees that insurers and group plans have to pay starting in 2014.  Much or all of these fees are passed on though the premium cost.  But there are also some mandated improvements in the level of coverage that apply to all health plans in 2014.  These benefit improvements slightly increase the premium cost as well.
• If you do not receive ‘affordable’ coverage through your employer, or are self-employed… now it gets a little tricky.  It’s based on both income and age.
  • It depends on your income:
    • If your household income is less than 133% of the federal poverty level, then your family should be eligible for Medicaid.
    • If your household income is more than 133%, but less than 400% of the federal poverty level, then your family is eligible for subsidized coverage through the Marketplace.
    • If your household income is more than 400% of the federal poverty level, then you are not eligible for any subsidized coverage, but are still required to be covered in 2014.
  • It also depends on how old you are:
    • There are new rules governing how insurance companies can price their products based on age.
    • In general, absent of any income-based subsidies, younger people will see higher costs in 2014 for a comparable health plan, and older folks (but not yet eligible for Medicare) will see lower costs.
  • Don’t forget about point-of-service costs!!!  Many of the plans in the marketplace (typically the bronze-level plans) have very high deductibles of several thousand dollars.  So don’t simply pick a plan on premium cost alone, look at the cost-sharing specifications as well.

What if I decide to go uninsured?  I’ve heard that the penalty is really low.

• If you fail to enroll in a health insurance plan in 2014, there is a penalty that will be assessed when you file your 2014 taxes.  Many have heard that this penalty will be only $95 for the year… and that is only partially true.  It is actually the maximum of $95 plus $47.50 for each child, or 1% of your taxable income.  So if you make $60,000 in 2014, the penalty will actually be $600, not $95.  Furthermore, this penalty gets much greater in future years.
• Also keep in mind that you must be enrolled by March 31, 2014 in order to be considered covered for the year.

Are there other options?

• Yes, depending on where you live, there are other options.
  • In New York State for example, there is a program called Child Health Plus that covers children through age 18 – ALL children regardless of household income.  The premium cost that you pay is dependent on your income, and the plans are insured through Blue Cross Blue Shield, United, MVP, etc.  It is not Medicaid, nor is it a Marketplace insurance plan.  However starting in 2014, you will have to enroll in the Marketplace to access these plans.
  • As mentioned above, there are also co-op’s available.  Lauren and I have participate in a medical cost sharing plan through Samaritans Ministries.  We have just started, so I can’t really comment on how well it works in practice, but so far so good.  It is a Christian organization, so you are required to have your pastor sign part of the application.  And the sharing arrangement is quite different from the typical insurance plan.  We must pay out-of-pocket for the first $300 of every claim (doctor appointment, prescription, procedure, etc.) and amounts above this are shared among the members.  We know people who have been members for a while and give Samaritans a high recommendation.

What did we do?

We enrolled our children in Child Health Plus, and are paying a very reasonable amount per month for all 4 children.

Lauren and I are using Samaritan’s Ministries since we do not go to the doctor very often.  Lauren opted to pay out of pocket for her monthly medication that will cost us around $50.00 per month.  We are working on an article about how to save on medications that should be up shortly.

Sorry for the long-winded post!  This is a very complicated issue, and a new landscape for everyone this year.

How have your health insurance costs and/or coverage changed in 2014, if at all?