Last week one of my clients contacted me about something she heard on the news.
(I have been closely following Obamacare since candidate Obama first declared the frustration of rising health insurance rates a national crisis during his first presidential campaign. I feel as if I have a fairly good understanding of what congress intended with the PPACA. Unfortunately, I have no way of knowing what alterations to the plan that congress gave the White House to implement will be made in the future.)
The lady who called me was looking forward to being able to get guaranteed issue health insurance through Obamacare but when she heard the TV news media say, “Texas does not participate in Obamacare” she got, justly, scared.
If she is scared because of something she saw on the news, I know that others, who saw the same broadcast, can also be confused or frightened. In this post I want to assure readers, who saw that broadcast, that there is nothing to be scared about.
The phrase, “Texas does not participate in Obamacare,” is a bit misleading. It is referring to Texas government and not individual citizens.
When Harry Reid wrote the PPACA, he anticipated that some state politicians would not “buy into” a federal take-over of health insurance.
The law, as signed by Barack Obama, is a federal law. It is NOT a state law.
(Whether it is an infringement on “state’s rights” is a different argument that is best left to politicians and constitutional lawyers. The federal government may not be able to force state governments to obey their laws but it can enforce it’s will on all citizen of the United States, regardless of the state in which they reside. On June 28, 2012 the U.S. Supreme Court, in a 5-4 decision, said that it was not.)
When you hear, “Texas does not participate in Obamacare.” Remember that you must listen to the context in which the user says that. There are, at least 3, ways in which this statement can be legitimately said.
In all 3 cases, the speaker is going to be talking about the use of state funds. The politicians in D.C. have done their best to anticipate and close any loop-holes that would allow private citizens to fail to participate in Obamacare, regardless of where they live.
Although the PPACA makes arrangements to help states build their own health exchanges, it says that in the event a state elects not to build a health insurance exchange, the federal government will build one for the citizens in that state.
When you hear, “Texas does not participate in Obamacare,” remember that Texas is just one of 36 states who elected not to build their own health insurance exchange. Texans, who want to claim a federal “subsidy” have no option but to use the flawed website built by CMS.
Allegedly, www.healthcare.gov will be fixed by the end of the month. During an exchange in the Senate last week between Senator Baucus (D – Montana) and Secretary of HHS, Sebelius, Senator Baucus warned her that “We don’t want to get to December 1 and hear, ‘We still need more time.’ ”
My advice is two-fold.
- If you are responsible for your own health insurance and do not qualify for a federal subsidy, buy your health insurance outside of the federal “Marketplace” at www.healthcare.gov. If you live in TX, you can use the links on the left side of this blog to shop for, and buy approved health insurance. If you live in a state other than TX, you should contact an insurance professional in your state to find out how you can buy health insurance outside of the federal “Marketplace.”
- If you do qualify for a federal subsidy and wish to claim it, your only option is your state’s exchange. If you live in a state that built its own health insurance exchange, I am not aware of any major problems they are having. You are probably safe to buy your health insurance through them. However, if you live in one of the 36 states who opted to let the federal government build health insurance exchanges, wait until. at least December 1 to try to enroll. If you already have health insurance, consider waiting until March. Yes, your premium for the first few months of 2014, may be higher than you expected to pay, but your experience with www.healthcare.gov will be smoother, the longer you wait.
Not only did the politicians effectively tell the Obama Administration, “If you want a health insurance exchange in TX, you need to build one,” they also informed them that state resources would not be required to enforce the PPACA on citizens.
The Texas Department of Insurance has continued to over-see state laws regarding health insurance, but they have left it up to the federal government to follow-up on any new federal mandates.
What that means to you is that it is highly unlikely that you will be bothered by state law-enforcement if you elect to boycott Obamacare. However, federal law-enforcement could still talk with you. (Keep in mind that about the same time that the PPACA was signed, the IRS was given authority to add 16,000 additional agents.)
The third way in which TX has elected not to participate in Obamacare is in the Medicaid Expansion.
The PPACA authorized the joint program between states and the federal governments to provide health insurance to the poor, known as Medicaid, to loosen up the qualification rules to 133% of the federal poverty level. The federal government would use taxpayer’s money to pay any additional costs the states would have for a handful of years, but eventually, the states would have to take over.
Texas is just one of several states who challenged to Constitutionality of the PPACA. On June 28, 2012, the U.S. Supreme Court ruled that congress did not have the authority to coerce any state to expand Medicaid and be liable for any additional enrollees.
Texas is one of the states that have opted not to expand Medicaid roles. That does not mean that low-income Texans must do without health insurance.
What it means is that they must enroll in private health insurance through www.healthcare.gov in order to get federal help with their health insurance premiums.
LESSONS TO BE LEARNED
There are two lessons that can be learned from this client’s communication.
Just because a state government has chosen not to “participate in Obamacare” does not mean that you are exempt. It just means that the state has elected not to use state resources for Obamacare. You are still exposed to the federal Individual Mandate.
The person, who contacted me about this issue, elected to go without health insurance a couple of years ago. Unfortunately, an unexpected, serious illness, has struck her.
I know that there have been millions of Americans who are preaching that Americans should go without health insurance in order to protest Obamacare. That is the equivalent of cutting off your nose to spite your face.
Although I am fully aware that people will say that as an insurance agent, I am biased, I want to warn Americans to think twice before they protest against Obamacare by going without health insurance.
The idea of not having health insurance and enrolling in it at the hospital may be viable during the first quarter of next year. However, the National Open Enrollment only lasts, under current law, until March 31. (While there is bi-partisan support for extending that deadline, the president is on record saying that he is against any extensions, even if his HHS did build a faulty website.)
The problem is that after March 31, unless you qualify for a Special Election Period, you will not be able to buy health insurance. This rule was established specifically to prevent Americans from going without health insurance until they need it and then getting a guaranteed issue policy.
The bottom line is that unless you have been uninsured for less than 63 days, you are screwed if you try to get health insurance after March 31, 2014 for any medical bills you have for the rest of the year.