Monday, September 09, 2013

More on the Affordable Care Act

... Especially since open enrollment for the pup starts in less than three weeks.

1. Thanks to Obamacare regulations on insurers, the “sticker price” of coverage will go up. Non-group coverage today is usually pretty cheap. One reason is that it frequently has big gaps in coverage — no benefits for maternity or prescription drugs, for example, or deductibles that reach into five figures. Another reason is that insurers charge more, or deny coverage to, people with pre-existing medical conditions.

Obamacare prohibits those practices. Under the law, all plans will include a basic, essential set of benefits—and must be sufficiently generous to cover at least 60 percent of the typical person’s medical bills. (That’s the standard for "bronze" plans. "Silver," "gold," and "platinum" insurance options would cover a greater share of expenses.) Insurers must also sell coverage to anybody who wants it, regardless of medical condition, without raising prices or withholding benefits. These and other requirements make insurance more comprehensive and more widely available, which is what reformers promised to do. But the regulations also make it more expensive.

2. Thanks to Obamacare’s subsidies for poor and middle-class Americans, relatively few people will pay the full sticker price. Under the law, subsidies are generally available to anybody with income that is less than four times the poverty line—which is about $46,000 a year for an individual and $94,000 a year for a family of four. Most Americans make less than that. The amount will vary by income, with poorer people getting more assistance. But among those families receiving assistance, the subsidies will be worth an average of $2,600 per year, according to another recent Kaiser Family Foundation study. That's a lot of money. And remember the subsidies act as discounts: If you are eligible for a subsidy, you don’t have to wait until you file your tax return to get your money back. Instead, the government will calculate your subsidy when you apply for insurance, and then show you coverage prices that reflect that difference. Ideally, that will all happen online, through the new websites state and federal authorities are building, though we'll have to see whether it works that way at the ouset. ...

3. Expect some "premium joy" and some "rate shock." Older and sicker people will tend to pay less money in premiums next year, because the law limits the ability of insurers to charge these people more. People who can barely pay their premiums now may also pay less next year, because they'll be getting those subsidies. These people will experience what Princeton economist Uwe Reinhardt has dubbed "premium joy." People who benefit from today's pricing practices—younger, healthier, and generally male—will tend to pay higher premiums in the new system. And at higher incomes, they won't get big subsidies to offset the price.

4. So far, Obamacare premiums appear lower than experts predicted. This (among other things) is what the Kaiser report showed. And it’s a legitimately big deal, for a few reasons. When the Congressional Budget Office calculated how much the law as a whole would cost, its experts made an assumption about how much insurance would cost—and then used that to figure out how much the federal government would have to spend on subsidies. If the real cost of insurance turns out to be lower than CBO expected, then the federal government won’t have to spend as much on subsidies, and it will end up saving more money. So far, that’s precisely what has happened. ...

For TAG members (and others in the animation biz) who freelance and don't earn enough money or contribution hours to qualify for MPI health coverage, they'll have a number of options for individual health coverage:

1) If you are a single person under thirty, you can purchase catastrophic insurance (the least-expensive coverage available. No subsidies available for catastrophic insurance.)

2) If you're a married person with a spouse and two dependents making less than $94,000 per year, you will be eligible for tax credits/insurance subsidies:

• Tax credits reduce the amount of the premium paid for insurance.
• Tax credits are available to individuals and families who meet certain income requirements.
• Tax credits can be applied to the cost of your health plan when you enroll – you do not need to wait until you file a tax return at the end of the year.
• You must enroll in a health plan through Covered California if you want to use your tax credits.
• Tax credits are paid by Covered California to your health plan to keep your costs low.
• Tax credits may be adjusted if your income is different than you anticipated. This means that you will want to notify Covered California if your income changes.

3) If you are single person with no dependents earning $50,000 per year, your estimated premium would be $3,984 annually – $332 per month – for a Silver plan. (No tax credits/premium subsidies.)

There's a lot of variations to coverage options, so it might be useful to visit the Covered California website play with the premium calculator.

It's not my intention here to get into a spitting match about whether the ACA is the Worst-Thing-Ever or A-Step-In-The-Right-Direction. My purpose is to provide info so you can make some informed choices on your own. Because the one thing I've learned is, the more knowledge and information you have, the more intelligent your choices and the better your outcomes.

Sitting around saying "ACA is horrible! ACA is horrible! ACA is HORRIBLE!! is as useful as whining about your crappy job. It wastes energy and it doesn't get you anywhere.


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