Health-care reform, known either as Obamacare or the Affordable Care Act, is big news this week.
Congress can’t pass a federal budget, with health-care reform on the firing line, and the impasse shut down most of the federal government while Republicans and Democrats point fingers at each other.
While Congress stoked political games, on Oct. 1 federal and state health care marketplace exchanges still opened to allow millions of Americans to buy insurance, in many cases with federal subsidies. About 2.8 million Americans tried. As they opened accounts online, the computer system crashed, causing delays or error messages for hundreds of thousands.
In the ruckus you might be wondering what you should be doing about insurance.
The answer depends very much on your individual circumstances, said Mike Sanders, president of Heritage Companies and Jeff Williams, a benefits consultant with Heritage and a Lee’s Summit Chamber of Commerce board member. They agreed to give The Journal a few tips on the basics of what individuals should know.
The law mandates that everyone have health insurance by Jan. 1, 2014. Don’t and you’ll pay a penalty later.
“There are many people who mistakenly believe that because Obamacare passed, they’re automatically covered, but they’re not,” Williams said.
If you have coverage through work, your parents, Medicaid or Medicare, you’re good. There’s no reason to rush to buy, however, because people have until Dec. 15 to enroll if they want coverage that begins on Jan. 1.
“Relax. Be patient and talk to someone who knows what they’re talking about and fact check,” Sanders said.
Ask a certified enrollment counselor (many insurance brokers have the certification) to help you.
The official federal website for information or to buy subsidized insurance is www.healthcare.gov, where people can buy a variety of plans.
Another good source of factual information is the non-partisan Kaiser Family Foundation, Sanders said.
Its website is www.kff.org.
They’ve warned to be careful because there are also scam websites, however.
They said that to buy insurance through the federal exchange you must complete a three-step procedure:
• create an account
• apply for the subsidy.
• third select your plan and pay for the insurance
Sanders and Williams warn consumers that income guidelines for the subsidies can be confusing. It’s called a modified adjusted gross income.
Williams said that when buying insurance through the federal site, consumers need to be accurate when filling out the application for subsidies.
For example, if a sales person underestimates their income, after the government cross checks records, it might money back for the subsidywhen that person files a tax return, Williams said.
“Uncle Sam will come calling back for the subsidy you took,” Williams said. “That’s not going to be fun for anyone.”
Sanders also gave an instance of a client whose husband died and in settling his estate had a capital gain.
Her regular income was low enough that she qualifies for a subsidy, but when counting the capital gain she thought she was ineligible for the subsidy. However, that capital-gain income isn’t included in modified adjusted gross income, so in fact she is eligible for the subsidy.
So be sure to understand the rules for calculating the income, or find advice from someone like a certified public accountant who does, they said.
Williams said it is also good idea to be sure to have your financial information on hand when going online, such as last year’s tax return, a payroll stub and employers tax I.D. number.
Basically, a single person making $11,500 a year is eligible for a full subsidy for a basic plan. However, a large number of people who make less than $11,500 won’t qualify for any subsidy.
The federal law included money to expand Medicaid coverage for them, but many states, including Missouri, chose not to broaden its coverage for poor people who are low-income but still above the current Medicaid guidelines.
“That gap was unintended, the federal government expected the states would choose to expand Medicaid,” Sanders said.
Williams and Sanders said healthcare reform is clearly a boon to some who have pre-existing conditions. People who were previously uninsured, like hemophiliacs, now can buy insurance and can’t be turned down.
Other people will see disadvantages or advantages.
For example, young men buying on an individual plan will see higher premiums while young women will see their premiums drop, because gender no longer is used in calculating premiums, Sanders said.
There are twists and turns for the subsidies, which are based on family size, income, and whether a person is eligible for coverage at work.
Willams and Sanders emphasize going to professionals or the websites to learn about how all this affects your situation before making decisions.
Remember the Obama administration and Congress are tinkering or even hammering the law as it rolls out over the next few years, so a person is wise to stay informed.
Now the fight is whether to delay the mandate forcing individuals to buy insurance.
“Things are fluid and constantly in a changing state,” Sanders said.