On Tuesday I posted the first part of, “When Obama Tried To Pick Up The Pieces, Did He “Fumble” Again?” In that post I offered two reasons why his “Administrative Fix” may not work.
Americans who have gotten policy cancellation notices may not have any choice but to buy a government approved health insurance plan.
SUBSIDY ELIGIBILITY REQUIREMENT #1
Those middle-class Americans, who have been relatively successful as an entrepreneur, may not qualify for a federal tax-credit to help with their health insurance premiums.
Neither will those middle-class Americans who are employed by small businesses who do not offer group health insurance, if their household, taxable income is too great.
If you are in either group, I encourage you to review this chart to see if you will even qualify for a federal subsidy. Just remember that the financial qualifications are not based on your gross household income for 2014 but on your Modified Adjusted Gross Income (MAGI).
If you do not know how to calculate your MAGI, my recommendation is that you call you tax advisor for a more accurate definition than the one I am about to share with you.
As I understand things, the way you calculate your MAGI is to estimate the total Adjusted Gross Income (taxable income) for your household and add to it any non-taxable income, like Social Security payments. If the total is greater than 400% of the federal poverty level for your household, you are not eligible for federal tax subsidies.
SUBSIDY ELIGIBILITY # 2
You are also not eligible for federal subsidies if you are a dependent who is eligible for group health insurance on someone else’s plan, provided the total cost of the family’s health insurance is less than 9.5% of the household income.
There is an exemption to that rule for young adults up to age 26. Even though they are able to remain on their parent’s group health insurance plan, if they file their own tax return, they are still eligible for federal subsidies if they elect to buy an individual health insurance plan.
People who are not eligible for federal tax-credits, are not required to purchase their health insurance through any government exchange or “Marketplace.” They are allowed to purchase an approved plan directly from an insurance company, outside of the exchange. Those websites are working just fine.
If that is what you elect to do, and you live in TX, you will find links to 4 different insurance companies on the left of this site. You will be able to get a rate quote, plan description and even submit your enrollment application whenever you want.
INDIVIDUAL MANDATE WARNING
In spite of all of the political hype in the last month the law has not changed. You are still required to have approved health insurance by January 1, 2014. If you elect to buy your health insurance outside of the government “Marketplace” you must do so by the end of 2013 or be willing to pay extra with your 2014 tax return.
However, things are different for Americans who do qualify for federal subsidies or eventually use the federal “Marketplace” to purchase their approved health insurance. They have until March 31 to buy a plan or be subject to Obama’s “Shared Responsibility Payment” (penalty).
“VAST MAJORITY OF AMERICANS”
Those Americans who live in states that have working exchange websites, should not have problems with their shopping and enrollment.
Unfortunately, the “vast majority” of states relied on the federal government to build a website with all the links that are required by the PPACA. That site has become the source of national derision and the butt of jokes around the country.
If the way the Obama administration has handled Healthcare.gov is not the biggest flop in presidential history, it definitely has to be in the top 10 presidential blunders.
If you live in one of the 36 states, including TX, who have relied on the federal government to provide a website that will allow you to enroll in an approved health insurance plan and get help from the IRS to pay the increased premium, it is likely that you have not yet been able to enroll in a plan.
I understand if you have tried to do your civic duty and enroll through Healthcare.gov, you have probably experienced nothing but frustration. Fewer than 3000 Texans were able to successfully manage that site in October.
Even though HHS has known since March 23, 2010, that they would need to build and operate exchanges for every state that elected not to build their own, they waited for over a year to even start working on the project. When October 1, 2013 arrived, and they were not ready, they crossed their fingers and gave America a site that is plagued with problems. The site they gave us is one small step above “inoperable.”
A week ago, after over a month of frustration, congressional hearings and finger-pointing, President Obama finally admitted that his Department of Health and Human Services “fumbled” the website.
He has appointed another individual, Jeffery Zients, to identify and correct the problems with the federal website. Mr. Zients has promised that Healthcare.gov will be fully operational for “the vast majority of Americans” by the end of November.
Yesterday, I learned what the Obama administration means by, “vast majority of Americans.” They mean that 80% of the people who use Healthcare.gov by the end of November will be able to successfully enroll in an approved health insurance plan.
That sounds great for those who are in the 80%. However, it also means that 1 in 5 Americans are going to continue to experience problems with that site.
The good news, at least if your goal is to avoid the “Shared Responsibility Payment” is that on October 28, HHS added an automatic exemption that will allow you to avoid the “Penalty” for not having health insurance for a few months.
According to the most recent rule change from HHS, if you eventually purchase your approved health insurance plan through the government-run “Marketplace,” you can wait until March 31, if you want, to get an approved health insurance plan.
Just be careful, if that is what you elect to do. The HHS exemption does not mean that you do not still have to pay doctors and hospitals for health care during January, February and March if you elect not to pay premiums during those months.
BOYCOT OBAMACARE ?
If you are accidentally injured and you are rushed to the closest Emergency Room for treatment, if you have no health insurance, you are still responsible for those doctor and hospital charges.
Some people have erroneously recommended that people not pay their health insurance premiums until they need hospital services and then enroll at the hospital. That is NOT good advice!! Rules have been established to counter that strategy.
There is a minimum 2 week delay from the time you actually enroll before your health insurance is effective. Not only does that give time for all the clerical work that is required to set up your account to take place, it also prevents you from waiting until you are injured of diagnosed with a disease to buy approved health insurance.
In light of all the fumbling associated with the transition to Obamacare, here are my recommendations.
- If you already have health insurance, even though the rates might increase, do not cancel it until you have something else.
- If you do not already have health insurance, get some ASAP!
- If you will not be eligible for, or want to claim, a federal tax credit, buy your approved health insurance outside of the federal “Marketplace.” Do not involve the federal government any more than you have to in the process.
- If you are eligible for, and want to claim, a federal tax-credit to help with your increased health insurance premiums, your only option will be your state’s health insurance exchange. If your state relies on www.healthcare.gov, I recommend that you wait as long as possible before you use that site. If you must have health insurance by January 1, 2014, you have no choice but to try it before December 15. However, if you already have acceptable health insurance, I recommend that you wait until after the first of the year. The longer you can delay using www.healthcare.gov, the more time you give CMS to make needed corrections.