Health Insurance Navigator

By Lisa Zamosky

A few weeks ago I wrote a blog post about the various ways in which people who choose to retire early may benefit from the Affordable Care Act.

Starting in 2014, you can no longer be turned down by insurers for a pre-existing health condition, and new limits on how much you can be charged because of your age will also be in place. That means those who have delayed retirement for fear of losing health benefits, will once again be able to consider stepping back from work.

In my earlier post, I discussed that under the law, early retirees may have access to less expensive coverage as a result of new subsidies that will be available to help people better afford insurance. You’ll qualify for subsidies in the form of tax credits, if you make less than about $46,000 annually.

One reader left a comment in response to the blog that I thought was important and worth addressing.

Here’s what he had to say:

Overall the author has written an informative article. However, the following point is not clear.

The article is addressing the situation of early retirees. But Point #3 says, Government subsidies are available to people earning less than $46,000 annually.

Retirees may not have earned income. They may have pensions or withdraw funds from IRA accounts totaling less than $46,000 annually. Are they eligible for a subsidy?

What about the retiree who withdraws less than $46,000 per year, but can afford to withdraw more, but doesn’t want to because they want their savings to last longer?

What Counts as Income?

The reader asks a very important question. Particularly in talking about retirees, I should have included the various types of income that counts when determining whether or not you’re eligible for a tax break under the health reform law.

Aside from salary or money earned from your own business, here are the sources of income that will count toward the tax credit calculation:

• Unemployment insurance
• Pensions
• Social Security income
• Funds pulled from retirement accounts
• Alimony
• Rental income
• Royalties

It’s only income – not one’s assets – that will be factored when determining whether or not you qualify for financial assistance from the federal government to help pay for the cost of your insurance. That means even if you’re able to pull more than $46,000 out of retirement accounts, you’ll still qualify for help as long as you keep your withdrawals and income below that threshold.

What questions do you have about the new health insurance marketplaces? Please sound off in the comments section below.

By Lisa Zamosky

Paying for Benefits You Don’t Use

A growing number of Americans are insured through what are called consumer-directed health plans (CDHP). These are insurance policies that come with a high deductible, meaning you pay a lot out of pocket before getting help from insurance. They are also paired with some kind of a tax-preferred health savings account.

The idea behind these plans is to encourage people to become more aware of their medical costs, and therefore, better health care consumers. The goal, of course, is to save money. If you know what your health care costs, you’re more likely to shop for the best care you can get based on price and quality. Of course, a major flaw of these plans is the fact that obtaining firm prices and information about the quality of your health care provider is about as doable as turning back time. But we’ll save that for another blog post.

The fact is, a growing number of employers are adopting CDHP to keep their own costs in check. The expectation is that the trend will only continue to grow, in part because these plans will help employers keep costs below thresholds included in the Affordable Care Act that trigger additional taxes. 

Higher Deductibles Lower Use of Medical Services

New research by the Employee Benefit Research Institute (EBRI) found that, in fact, these health plans have been successful at reducing the long-term use of outpatient physician visits and prescription drugs. However, the study also found that hospital visits were not lower among those covered by CDHP, and in fact, trips to the emergency department increased at a rate higher than those with more traditional health plans.

What the EBRI study also found is that people covered by these plans have a lower likelihood of receiving recommended cancer screenings.

Know Your Benefits

What many people covered by plans with high out-of-pocket costs either forget or simply don’t know is that as a result of the Affordable Care Act, they have access to preventive health services with no cost at the time of the visit. As a result of not understanding their benefits, many people are missing out on their right to services that they’re paying for through their insurance premiums each month.

That means seeing your primary care doctor once a year for a wellness visit and screenings such as colonoscopies, mammograms, high-blood pressure, diabetes or colorectal cancer are available to you now without charge.  Co-pays, co-insurance and payment toward your plan’s deductible are all waived.

You can see a full list of available services at Healthcare.gov.

Are you skipping care? Do you have a high-deductible health plan? If so, did you realize that you had access to preventive care without cost at the time of the visit? Do you ever skip going to the doctor or filling a prescription because of cost? Share your experience in the comments section.

By Lisa Zamosky

In a country where employment is so intertwined with health insurance, it’s not surprising that many people delay retirement for fear of losing health benefits. Those interested in retiring before they are eligible for Medicare at age 65, often find their plans thwarted by a shortfall of affordable insurance options outside the workplace.

As I discussed in this previous post, a recent industry survey found that 53% of workers say they would continue working longer than they’d like to in order to hold on to health insurance.

In 2014, when the Affordable Care Act is fully implemented, the Census Bureau projects that there will be 39.1 million Americans between the ages of 55 and 64.

If you’re in this age group and plan to buy health insurance on your own, here are 4 things you should know about the Affordable Care Act and the changes likely in store for you.

1. Coverage is guaranteed: A central feature of the law is a guarantee of health insurance for everyone who applies.  Insurers will no longer be able to turn people away because they have a pre-existing health condition.  Even something minor in today’s market can lead an insurer to turn down an applicant – and how many people make it to their mid-fifties with absolutely no medical history to speak of? For health plans that take effect January 1, 2014, no matter your health condition, fear of going without coverage because insurers turn you down will become a thing of the past.

That’s expected to give many people previously afraid to leave their jobs and their health insurance plans the freedom to retire before they reach Medicare age.

2. The cost of insurance may go down: If you buy insurance on your own now, you’ve no doubt experienced rising costs for a host of reasons, including your advancing age. In today’s market, insurers frequently charge older members up to 10 times more than those in younger age brackets.

The health reform law puts a cap on that. While the law does allow insurers to charge older people more than younger folks, the difference can be no more than three times higher. That means starting in 2014, a 64-year-old person cannot be charged more than three times the amount that a 21-year-old person pays for the same coverage.

With insurers prohibited from varying prices based on age, many older consumers are expected to see a reduction in their rates.

3. You may get a break on price: Government subsidies available to people earning less than $46,000 annually (roughly $94,000 for a family of four), means people ages 55 to 64 may save even more on the cost of a health plan. In fact, a recent report by the health consumer organization Families USA found that more than 3.2 million people age 55 and older could be eligible for premium tax credits.

Let’s take the example of a 56 year-old adult making $40,000 per year.  For a health insurance policy that costs roughly $7,041 per year (about $583 per month), this individual would qualify for an annual subsidy of more than $3,200. That reduces the cost of the insurance policy from $7,041 to $3,800 (about $316 per month).

4. Benefits may look different: Whether you buy your own health insurance today or get it at work, you’re likely to see some differences in the plans available through the marketplaces.

For example, the law requires all new plans to include a core package of benefits within 10 categories of care. If you buy your own coverage now that may mean you’re benefits will be richer. Those leaving their jobs and buying health insurance on their own for the first time are likely to see a benefit package similar to what they’re familiar with.

However, you may find fewer choices of doctors and hospitals. Last week, California released information on the plans being sold through its marketplace starting this fall. To keep costs down, many high-priced and popular hospitals and medical groups were not included in the provider networks. That’s a trend expected around the country.

Have you continued working for fear of losing health insurance? Share your thoughts in the comments section below.

By Lisa Zamosky

As the full implementation of the Affordable Care Act approaches, readers of this blog have asked questions about what’s to come.

Today, I respond to two questions about Medicaid – the government health insurance program for people with limited income. Readers are interested to know how the health reform law will impact the program and their particular situations.

Reader Question: My gross income places me in the federal Medicaid eligible group, however, in my state, Texas, I do not qualify since I am single with no children and am not disabled. I work in the healthcare field and would not want to see any of the Medicaid providers that I am familiar with anyway.  Will I be allowed to participate in the Health Insurance Marketplaces if I am willing to pay?  Will any of the premium assistance programs be available to me?

Answer: There’s a good chance you will be able to buy a health insurance policy through your state’s marketplace, and qualify for a tax credit. The tax credit will reduce the cost of your insurance premium (the monthly payment you make each month for a health insurance plan).

Under the health reform law, states have the option to expand their Medicaid programs and to extend insurance to many more people. If they do, people like this reader will, for the first time, have access to Medicaid. But not all states are choosing to expand their program.  And, Texas is among the states declining the option to do so.

Whether or not you will be able to buy insurance through your state’s marketplace and get help from the federal government to lower your costs will depend on two things:

1.      Whether or not your state expands its Medicaid program

2.      Your household income

In states that do expand, if you are a single person making $15,856 or less a year, you will qualify for Medicaid.

But let’s say you live in a state such as Texas, and the Medicaid program will not be expanded. If your income is at the poverty level — $11,490 in 2013– and you have no other access to an affordable health plan through an employer, Medicaid or Medicare, you can buy coverage on the marketplace starting October 1 and get a tax credit.

Reader Question: If someone does not sign up for insurance during the open enrollment period, pays the penalty and then gets sick and runs out of money to pay their medical bills, will Medicaid then be on the hook for their bills?

Answer: No, the person on the hook for the medical costs in this situation is you. This is exactly why the choice to not buy coverage is never one’s best option.

If you can afford to purchase a health plan, it’s advisable for you to do so. And remember, most people who buy a health plan through the marketplaces will be eligible for steep tax credits that will lower the cost of coverage.

If you miss the open enrollment period, which will run from October 1, 2013 through March 31, 2014, you will have to wait to buy an insurance policy until the next open enrollment period comes around. If you have an accident or become ill during that time, you’ll be left to pay the penalty for failing to have health insurance as well as any medical bills you incur.

What questions do you have about the Affordable Care Act and how it might impact you and your family? Please ask your questions in the comments section below.

By Lisa Zamosky

Earlier this week, actress Angelina Jolie made headline news when she announced in a New York Times Op-Ed she’d undergone double mas­tec­tomies to reduce her risk of devel­oping breast cancer.

Jolie wrote that she carries the BRCA1 gene, which sharply increases her risk of developing breast cancer and ovarian cancer.

She explains  that her doctors estimated she had an 87% risk of developing breast cancer and a 50% risk of developing ovarian cancer like her mother, who died of ovarian cancer at the age of 56.

No doubt women with a family history of breast cancer have taken notice of Jolie’s announcement and medical decision. Many may  consider following in her footsteps, at least when it comes to undergoing genetic testing to determine their own risk for breast and ovarian cancers.

Naturally, the decision is a very personal one that needs to be made thoughtfully with one’s doctor.

But once you move beyond the medical consideration, financial realities also come into play. Few of us have the financial means Jolie has at her disposal. And, the total cost of her medical procedures has been estimated around $20,000.  Genetic testing alone can run between $300 and $3,000.

Is it Covered?

Due to changes brought about under the Affordable Care Act, new health plans are required to pay for genetic counseling and testing for women at high risk of having the BRCA gene. In addition, mammography screening for breast cancer risk is now paid for by insurers without you having to kick in a co-pay, co-insurance or meet your health plan’s deductible. You can read more about the preventive services available to women under the law at Healthcare.gov.

However, should you take the genetic test and discover that you have the BRCA gene(s) and are at high risk of developing cancer, you likely would be on your own if you also decided to undergo mastectomy as a preventive measure.

It’s worth noting, however, that the health reform law also puts in place new options for appealing your insurer’s decision when it refuses to pay for a medical procedure. One could make the argument — with the support of her doctor — that preventive measures to head cancer off at the pass are not only potentially better for one’s long-term health but also less costly. Cancer treatment, after all, can easily run into the hundreds of thousands or even millions of dollars.

What do you think about Jolie’s decision? Would the high cost of treatment stop you from undergoing care you thought could extend your life? Please comment in the section below.

By Lisa Zamosky

By the end of 2012, more than 50 parts of the Affordable Care Act had already taken effect. Yet, a number of the law’s benefits are being overlooked. It’s no surprise, given that a recent poll conducted by the Kaiser Family Foundation found that 42% of Americans don’t realize that the Affordable Care Act is law.

Here are three rights now available under the law that you may not realize you have.

1. You don’t have to pay for preventive care

I talk to a lot of people who have high-deductible health plans who put off going to the doctor to avoid paying the full cost of care.

What most people don’t realize, however, is that the law allows them to get preventive care – services such as annual flu shots, screenings for blood pressure, cholesterol and colorectal cancer, mammograms and well-woman visits – at no cost. That means your visit is not subject to your plan’s deductible and you won’t be required to pay a co-payment, or co-insurance.

View a full list of no-cost preventive services at Healthcare.gov.

2. Your kids can’t be turned down

Many people are aware that young adults are now allowed to remain on their parents’ health plan until they reach age 26. This is one part of the law that’s gotten a lot of media attention.

But what many people don’t realize is that if you have a child younger than 19 who has a health condition and he or she isn’t covered by your employer’s plan, you can buy a new policy on the private insurance market without the threat of your child being turned down.

Insurers selling new policies are no longer allowed to deny any child younger than the age of 19 a health plan, even if he or she has a pre-existing medical condition.

3. If you’re 65 or older, you may save money on your drug costs

If you have Medicare coverage and take a lot of medications, you may be familiar with the Medicare donut hole—the gap in prescription drug coverage that starts once you’ve spent $2,970 on your medications and ends only once you’ve spent $4,750.

Because of health reform if you enter the donut hole you’ll now receive a 52.5% discount on name brand drugs and an 11% discount on generics. The government estimates that in 2013, Medicare recipients who reach the prescription drug donut hole will save $766 as a result of the law.

What’s more, the discounts grow over time. By 2020, if you hit the donut hole you’ll pay just 25% of the cost of both name brand and generic prescription drugs.

Are you taking full advantage of the benefits available to you? Share your thoughts in the comments section below.

By Lisa Zamosky

Keep it simple: that was the government’s goal in creating one application to sign up for health insurance starting this October. That’s when online health insurance markets being set up under the Affordable Care Act will open across the country for people who don’t get health insurance at work.

Several months ago, the government came out with a 21-page application to fill out when applying for a new health insurance policy. Needless to say, the criticisms were sharp.

In an effort to make good on the promise of a simplified application process, The Centers for Medicare & Medicaid Services (CMS) just announced a revised three-page version for individuals applying for coverage.

Once filled out, consumers will be able to see all of their coverage options, based on income.

Options will include:

• Plans in the Health Insurance Marketplace (insurance exchanges), which in many cases will include tax credits to help you pay your insurance premiums
• Medicaid (for people with lower incomes)
• The Children’s Health Insurance Program (CHIP)

Details of the Forms

There will be three different forms available to apply for a health insurance policy through the state Marketplaces, and which one you use will depend on your circumstances:

1.      There’s a three-page version for single adults who don’t currently get health insurance at work.

2.      Families will have to fill out a 12-page application.

3.      A third application is for people who want to buy an insurance plan through the Marketplaces, but who won’t be getting a tax credit to help pay for it.

Laying out Your Finances

A shorter form doesn’t mean the process will be a cake walk. You’ll still have to gather up your financial information, along with some other documents, such as tax returns, pay stubs and other records. If you receive income from Social Security, retirement accounts, pensions, unemployment or alimony, you’ll be required to report that as well.

Also required will be information about one’s citizenship and immigration status. All of this will be verified through a central data ub that will tap into Social Security, Homeland Security and the Internal Revenue Service to determine a person’s eligibility for coverage and tax credits.

You can apply for an insurance policy online through Healthcare.gov starting October 1, 2013. But you’ll also have the option of filling out the application in paper form and mailing it into an address provided within your state, as well as filing out an application in person or with someone by phone. The details of how to do so will be coming in the months ahead.

Simple or Just Too Complicated

Filling out an application for health insurance today, or a credit card, or any number of other financially related goods or services, requires us to gather a lot of financial information to complete the process.  In that way, this is really no different.

Still, some say the application process remains too complicated, particularly when you consider a Kaiser Family Foundation poll just out that finds that 42% of Americans are still unclear that the Affordable Care Act is the law of the land.

What do you say?

Share your thoughts in the comment section below.

By Lisa Zamosky

A central feature of the Affordable Care Act is that it provides tax credits to help people afford health insurance.

A new report by the health consumer organization, Families USA, finds that nearly 26 million Americans will qualify for financial help to lower the cost of their health benefits. Will you be among them?

Tax Credits in Action

There are a few requirements for receiving a premium tax credits.

Income: If you’re an individual with an annual income of $47,100 or less, or if as a family of four you earn up to $94,200 a year, you’ll meet the income requirements to qualify for a tax credit.

Where you buy matters: You’ll need to buy insurance through the new online health insurance marketplace being set up in your state. These markets are scheduled to be operational by October 1 of this year for coverage that takes effect January, 2014. If you haven’t heard much about the marketplaces yet (also called exchanges) or how to access the one where you live, don’t worry; a big advertising push by federal and state governments to educate the public is headed your way this summer.

No work-based coverage: You won’t qualify for tax credits if you’re offered affordable health insurance at work. Under the law, “affordable” means your health plan won’t cost you more than 9.5% of your annual income (whether or not you find that affordable is a separate issue!). If you have access to coverage through work, and you buy insurance through the marketplace anyhow, you won’t get the tax credit, even if your income falls within the eligibility range.

Monthly price breaks: The tax credits will be sent directly to the health plan in which you’ve enrolled, which will offset the total cost of your plan’s premiums, thereby lowering your monthly expenses.

Who is Getting Help?

In addition to finding that 26 million Americans will be eligible for financial help under the law, the Families USA report, “Help is at Hand: New Health Insurance Tax Credits for Americans,” found the following:

• Nearly 9 in 10 people eligible for a tax credit will be part of a working family
• Over one-third of those eligible – 36% — will be young adults between the ages of 18 and 34
• 56% will be people earning between $47,100 per year and $94,300 for a family of four
• The majority will be white and non-Hispanic (58%), about 11% will be African American, 23% will be Hispanic.

The states with the most citizens eligible for tax credits are:

• Texas
• New York
• Florida
• California

You can see how many people will qualify for the premium tax credit, broken down by employment status, age and ethnicity in each state by checking out the report.

And to see if you personally qualify for a premium tax credit, visit the ACA calculator on the Kaiser Family Foundation website.

By Lisa Zamosky

As the implementation of the Affordable Care Act marches on, readers have questions about how the law is going to play out.

Although the number of Americans with employer-based insurance has dropped over the last decade from nearly 70% in 2000 to about 60% in 2011, according to a Robert Wood Johnson Foundation report released this month. Even so, most people with health insurance still get it at work. It’s not surprising, then, that I regularly receive questions about how the health reform law will impact employer-sponsored coverage.

Today’s question comes from a reader named Bud:

If you are currently employed by a large employer (over 50 employees), and are on that employer’s health care plan, and have a second job with a small employer (under 10 employees), is the small employer required to offer you a health care plan if he employees you over 30 hours per week?

Not All Employers on the Hook

In this case, it’s only the employer with more than 50 workers that has any responsibility under the Affordable Care Act to offer you health insurance coverage. Small businesses with fewer than 50 workers have no obligation to do so, meaning your employer with just 10 employees is off the hook, no matter how many hours a week you put in there.

Here’s what the law says about the requirements employers will face under the law:

• Starting in 2014, any company employing more than 50 employees will either have to provide workers with health insurance or pay a penalty of $2,000 for each employee that works an average of 30 hours or more each week.

• The health plan has to include a set core of benefits, called Essential Health Benefits.

• The insurance coverage cannot cost more than 9.5% of your annual income. If it does, your employer could be on the hook for a penalty. And, you, the worker could then buy insurance through one of the new state-based marketplaces and possibly get financial help from the federal government to reduce the cost. If your employer’s plan costs less than 9.5% of your income, you will not qualify for the federal subsidies.

• The plan must cover at least 60% (on average) of your healthcare expenses.

More Questions?

As the full implementation of the law comes closer (January 1, 2014), you may find yourself wondering how you and your family will be impacted. I invite you to send in some questions of your own, and to look for an answer here at the Health Insurance Navigator.

By Lisa Zamosky

How much do you know about the kind of health insurance plan options that will be available to you through new health insurance Marketplaces being set up under the Affordable Care Act? If you’re like most people, not much.

HealthPocket.com, a website that allows you to compare health insurance plans in your area, side-by-side, conducted a recent survey that highlights just how much education the public needs in the six months left until the Marketplaces are scheduled to open for business.

The survey of nearly 1,000 people found that more than 85% had no idea how the new Affordable Care Act health plans will differ from one another.

“The survey results suggest that the Act’s pending impact to the health insurance market is still a mystery to the average American,” the report said.

Four Health Plan Types

The health reform law creates four health insurance plan types that are referred to as the “metal plans” (each one is named after a different type of metal).

All health policies sold through the Marketplaces must include a basic benefits package, called Essential Health Benefits that include coverage for services such as outpatient and emergency services, hospitalization, maternity and newborn care and oral and vision care for children, among other things.

The single difference among the four plan types is the percentage of medical expenses each pays. Here’s how it breaks down:

• Bronze – The insurer covers 60% of medical expenses (you pay the remaining 40%)
• Silver – 70% of costs are covered
• Gold – 80% of costs are paid by the insurer
• Platinum – 90% is covered.

Individuals must carry a bronze-level plan or higher in order to meet minimum requirements for insurance coverage under the Affordable Care Act.

Only 4% of those polled in the Health Pocket survey correctly identified the differences among the various plans as the percentage of medical costs paid by insurance.

Getting Ready

The Marketplaces are scheduled to open around the country in October. As I’ve discussed before, previous polls have shown that the majority of people who will be newly eligible in 2014 for insurance coverage because of the law don’t know a thing about the new marketplaces. Now we know not much is understood about the plans that will be sold on them either.

What questions do you have about the kind of health insurance that will be available to you? Ask your questions in the comment section and look for an answer in upcoming posts.