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Why You Need to think About Health Insurance – Now

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.)

time to think about health insurance is now

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.

Obamacare take action

8 Responses to Why You Need to think About Health Insurance – Now

  1. Great information. I am surprised by how little people are talking about the coming changes. I think many people are not going to know what hit them and I am afraid that costs will go way up. As a young person, I am not happy about what is going to happen to premiums. I am healthy, but am probably going to pay more than I do now. So far, my company has held pretty strong with our plan and kept the premium low. I suspect that, at some point, premium paid by employers will end up getting taxed as additional income.

  2. When I was in my early 20’s I went without health care because I just couldn’t afford it. I’m very thankful that my job provides it to both myself and my spouse at no cost to us. I’m curious to see what changes will be implemented from my employer end.

  3. I am in the health insurance industry, so this is an interesting time. The more government program expertise you have, the more valuable you are.

    Personally, I am not a fan because I am young and healthy yet my premiums will likely go up. I do have coverage through my employer, but I think at some point, the amount your employer pays towards your premium will become taxable income.

    Put on top of that the new “fees” on top earners and it seems very demotivating. Based on what I have heard from the doctor community, costs will go up with the implementation, not down.

  4. I’ve never had a “real” job that didn’t provide health coverage. None of my friends, nor their families are any different, so it’s hard for me to comprehend something like not having insurance, particularly if you have children. At the same time, I find it curious that people would reject such a “deal” since society leans toward favoring having things done for them and this, to me at least, fits perfectly.

  5. Being employed with a good benefit plan ensures that we don’t have to worry much about health insurance, expect the fact that I have to pay high premium. We are going thru IVF procedure so premium health plan was recommended by our in-house insurance experts.

  6. I never thought that I would be without insurance, but after having health insurance for my entire life, it’s exactly where I find myself. Thanks for the article – have to start planning!

  7. That’s the hard part — getting people to realize that whatever they think about health insurance, the time is shortly coming when it won’t matter. You don’t have it, you pay a penalty!

    I figure there will be all sorts of widespread panic (and probably some active scams) once all this sinks in. Look for it late October or November.

    thanks so much for contributing, all of you.

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