How To Survive Obamacare


Photo by Jessica Rinaldi of REUTERS
Photo by Jessica Rinaldi of REUTERS

Like it or not, Obamacare is the law.  Now that it has reached its zenith, the time for argument is over.  Some people love the new law.  I don’t.

I have made my living as an insurance agent for 27 years.  I have heard all the arguments in support of Obamacare.  However, in the past 5 years, since the plight of the uninsured was declared a national crisis, I have not heard of one politician offer to pay for health insurance for anyone other than their immediate family.

Until a politician, a member of the media or a bleeding heart Hollywood actor “puts their money where their mouth is” and pays for health insurance for someone, other than family, I am not willing to listen to them.  As far as I am concerned, they are not interested in the uninsured.  They are interested only in their own publicity.

In this post, I want to try to avoid the political arguments and provide you with specific advice for How To Survive Obamacare.

1.  BE CAREFUL WITH WWW.HEALTHCARE.GOV

Computer Problems

People who live in one of the 16 states who have used the time since the PPACA are having an easier time accessing and using their states health insurance exchange.  They are only having problems occasionally that are consistent with well-tested web sites.

However, those Americans who do not live in states that adopted state-based exchanges early, are not having similar experiences.  Their state politicians, for whatever reasons, have elected to allow the federal government set up the exchanges necessary to implement a federal program.

Unfortunately, the federal website, www.healthcare.gov, has been plagued with problems from the first day it was released to the public.   It is far from having the functionality that the politicians in D.C. envisioned.

Like good politicians, the people in D.C. who brought you www.healthcare.gov are claiming innocence and pointing fingers to blame someone else.  Unfortunately, while they are playing the “Blame Game” millions of Americans are unable to enroll in an Obamacare approved health insurance.

Click the graphic to read the entire HHS memo.
Click the graphic to read the entire HHS memo.

Last Monday, October 28, the Department of Health and Human Services addressed the problem of the “Shared Responsibility Payment” (penalty) for not having approved health insurance by January 1.

The result of the HHS rule is that Americans, who eventually buy health insurance through the federal “Marketplace” are not required to have approved health insurance by January 1, 2014 in order to avoid the Obamacare penalty.

However, avoidance of the Obamacare penalty is only a political issue.  With doctors and hospitals charging as much as they do for health care, you should also consider the practical wisdom behind having health insurance.

Since not having health insurance can cost you thousands of dollar in the event of an accident or unexpected illness, going without health insurance is not the most wise way to protest against the new rules from Washington D.C.

Regardless of who is in the White House, if you are injured or ill, you will still be liable to pay your doctor or hospital.

If you are not happy about the way the White House is implementing Obamacare, rather than protesting by not buying health insurance, of any kind, avoid www.healthcare.gov and buy your approved health insurance outside of the federal “Marketplace.”  Just remember to do it before January 1, 2014.

That way you avoid Obama’s “Shared Responsibility Payment” to the IRS at the same time you are providing protection against the financial impact associated with accidents or unplanned illness.

Premium Timing

The PPACA requires Americans, who enroll in health insurance through an exchange, to send their portion of the first month’s premium to their chosen insurance company within 30 days of enrollment.

There is a problem for Americans who already have health insurance but elect to change to an Obamacare plan as of January 1.  If you enroll in a plan during November, you will not only have to pay your regular health insurance premium in November, you will also have to pay your premium for January within 30 days.

The result is that you could find yourself making payments for two months worth of health insurance during the holiday season when many people prefer to have more spending cash.

There are two possible solutions to this potential problem, other than doing without.

  1. If you must enroll in a health insurance plan in November, use a credit card, rather than a check, to pay your first premium, if it is possible.  That way, you are able to maximize your cash during the holidays.  (Just remember, you are still responsible to pay that premium in January.)
  2. Avoiding the danger of double health insurance payments in December is relatively simple.  If you do not wish to use a credit card for your first premium, simply wait until after December 2 to enroll.  That way your first premium is not due until January.  Just remember to mail them a check during the last week of December.

2.  MIND YOUR SUBSIDIES

Many Americans are eliminating themselves from eligibility for federal subsidies under Obamacare because they do not understand exactly what the criteria is for getting a tax-credit.

Below are two variables that you need to understand before you rule yourself out of subsidy eligibility.

MAGI

Many Americans have the mistaken idea that their household income is too large to qualify for federal tax-credits.  That is not necessarily true.

Federal tax-credits will be based on MAGI (Modified Adjusted Gross Income) and not your gross income, for 2014.

The MAGI is calculated by adding back to your Adjusted Gross Income any non-taxable income that comes into the house.

In other words, talk to your tax preparer before you say, “We earn too much money to qualify for an Obamacare tax-credit.”

Group Health Insurance

In addition to the income qualifications, Americans can also be disqualified for federal help with their health insurance premiums if they are eligible for approved, affordable group health insurance.

The thing to remember is that eligibility for tax-credits is based on whether you are eligible for group health insurance and not if you are enrolled in a group plan.

Already, I have been approached by people asking if they can get some federal help with their health insurance premium if their spouse and children are not added as dependents on their group plan.

Unfortunately, I have to tell them, “No.”

Many employers help with the premiums for employee’s dependents.  However, many employers do not.  They allow employees to add their family members to their group health insurance plans but the employee is required to pay the full price of health insurance premiums for them.

The new rules for Obamacare do not require employers to subsidize the cost of health insurance for anyone but the person who is actually employed.  However, the rules also eliminate dependents, who can be enrolled in a group health insurance plan, whether or not their premiums are subsidized, from receiving federal tax-credits to help with their health insurance premiums.

3.  UNDERSTAND YOUR ESSENTIAL BENEFIT OPTIONS

On The “Marketplace”

If you qualify for, and wish to claim a federal tax-credit to help pay your health insurance premiums in 2014, you do not have an option.  The only place you can claim a tax-credit subsidy to help with your health insurance premiums in 2014 is either your state’s health insurance exchange or the federal “Marketplace” at http://www.healthcare.gov.

There is much that I can say about that site that is not flattering.  However, I have no desire to defend myself from politically minded trolls on the internet for stating facts.

You can decide for yourself if the plans that are offered through the federal “Marketplace” are simpler to understand, offer better coverage than what you had and are “affordable.”  Good people, on both sides of the controversy, are having different experiences.

One of the few things that everyone agrees about, is that the exchange that was built by, and offered to the public by HHS on October 1, falls short of expectations.

The best advice that I can give to any American who must use www.healthcare.gov is that they should wait until the first two weeks of December before they try to enroll on that site.

That will give CMS an extra month to correct their problems.

Off The “Marketplace”

Someone else will need to worry about getting you an Obamacare approved plan if you have group health insurance, Medicare, Medicaid or some other form of government sponsored health insurance.

However, if you must get your own health insurance you have an option other than www.healthcare.gov.

Many insurance companies will allow you to by-pass the federal website if you do not qualify, or do not wish to claim, a federal tax-credit subsidy.

You will find links to some of the top health insurance companies, with whom I am contracted, in Texas, on the left-hand side of this blog.  If you are not eligible for federal “subsidies” all you need to do is click on the link for the company that interests you.  In most cases, you will be able to see what plans are available, how much they cost and submit your application without having to deal with the frustrations and red-tape of the federal “Marketplace.”

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