Time to discuss the glamorous, exciting subject of…
Health insurance. As in “Obamacare.”
More specifically, the Patient Protection and Affordable Care Act, along with the Health Care and Reconciliation Act, signed into law by President Obama in 2010. This act actually has 10 different sections. Some went into effect immediately or soon after, like giving companies the right to produce some drugs for 12 years before they go generic. No lifetime limits on dollar amounts for benefits. Dependents can stay on their parents’ plans through their 26th birthday. A ‘temporary high-risk’ pool was formed, for would-be recipients with preexisting conditions. And a slew of institutes, research groups and task forces were put into place, as well.
Health Insurance Exchanges
As of October 1st of this year, U.S. citizens will be able to choose from a variety of subsidized healthcare plans, according to the Act, to go into effect Jan. 1, 2014. Health insurance exchanges, or marketplaces, will be set up by the states or privately for people to purchase insurance. They must be in operation by Jan. 1, by federal law. Payment is set by the OPL, or ‘official poverty level,’ which currently stands at nearly $12,000 for a single person, and about $24,000 for a family of four. Those with incomes 133-400% of the official poverty level can take advantage of subsidies in the form of tax credits. (Specific amounts are suggested, but may change — it should be on a sliding scale.)
The goal is to have it not only easier, but more affordable for every person in the U.S. to have health insurance, whether company or self-funded. Take this chart, as an example, for how out-of-pocket premium payments are being figured. (Notice that Alaska and Hawaii are not included, in this, at least.)
Taxes and Fee
Who’s going to pay for this? We are, in the form of higher taxes and fees.
Why is this important to know? Because as of January 1, “Individuals who are not covered by an acceptable insurance policy will be charged an annual penalty of $95.” This penalty increases to 1% of income over the filing minimum, whichever is greater, by 2016. (That means a minimum of $695, or a little over $2000 for families — 2.5% of income over the filing minimum. Exemptions will be granted for ‘religious reasons,’ members of “health care sharing ministries,” or those whose policies would exceed 8% of their income.)
This upcoming deadline is going to affect a lot of people. The 2009 U.S. census estimated that 50.7 million in the country (about 16.7% of the total population) had no health insurance. This was an increase from 2008, when about 46.3 million people were uninsured. And the government estimates that current figures are probably following the same pattern. The percentage of elderly and younger uninsured members is increasing faster, in proportion to their share of the population.
Many People are Uninsured
Even if you and your partner are enrolled in an insurance plan, chances are good that your young adult children are not. A recent article at SmartMoney.com pushes home the point that many twenty-somethings are still uninsured: about 30% for people in the 19-25 range, and more than 28% for 26-34 year olds, according to the nonprofit Kaiser Family Foundation. Sometimes this is by choice, otherwise known as the ‘Superman’ or ‘Live Forever’ complex: “I don’t have a home or mortgage, and I can use the extra money for my car payment. I’m young and feel great. What’s going to happen to someone like me?” Both our daughters, ages 24 and 26, used to subscribe to this — until Daughter #1 was hit by a car, late on a stormy night, and broke her nose. (Suddenly insurance was a much higher priority.)
More Changes to Come
The new health care act continues to implement changes and requirements into 2016. It is so complicated that most probably few people have read it through completely. (House Minority Leader Nancy Pelosi said in 2010, “We have to pass the bill, so you can find out what is in it…” She later said that was taken out of context: “We read the bill.”)
If you’re curious — and you should be — this site gives a whole laundry list of interesting things the new health care plan will be providing. Did you know that everyone in the country will get a National Health ID card — no exceptions? And we as taxpayers will be automatically subsidizing all sorts of union retiree health plans, including the UAW? My personal favorite: a government committee will decide what benefits and treatments individuals get. Some treatments will be rationed. (No appeals, either.)
Questions to Ask Yourself
As of this writing, the House of Representatives voted to repeal the Obamacare plan, 229-195. (There have been some court challenges, too.) However, that bill was not expected to pass in the Senate. That means you need to start asking some serious questions:
- Do I have a suitable insurance plan in place? If not, what are my plans to get one?
- How will I pay for it?
- Will the plan I can afford cover my actual needs?
- Are the people I care about — especially family members– covered?
It’s easy to ignore this. But changes are coming — soon.
President Obama’s “Organizing for Action” plan description is here, along with a ‘how it’s going to work’ app. Helpful FAQs are included, along with a variety of scenarios.
Time to take action.