Undoubtedly, you are starting to hear about the new Covered California Marketplace Exchange for individuals on TV, radio and in print ads. It is part of the massive changes being brought about by the Federal Affordable Care Act (ACA), also known as “ObamaCare.” I have been actively following the slow implementation of the ACA, knowing great changes in health insurance are about to take effect. I am delighted to educate Desert Health® readers on some of the key changes most people will face.
It is important to note that seniors on Medicare will not be affected by the coming fall and winter implementation of ObamaCare, and the ACA has already added a Medicare expanded annual preventive physical exam – at no cost, no deductible, no co-pay – as of 2012.
If your current health plan took effect before March 23, 2010, it is a “Grandfathered Plan.” This means you may be able to keep it (unchanged) for at least another year (possibly two) and its premiums may be lower than all the new ACA-compliant plans.
If your current health plan took effect after March 23, 2010, it is not a “Grandfathered Plan” in which case, you will have to replace it with a new ACA-compliant health plan next year – likely by January 1, 2014 – and surely by March 31, 2014 which is the end of the new Annual Open Enrollment Period for individual health insurance in the US. After that, you will have to wait until late Fall 2014 to enroll in or change your plan for January 1, 2015.
Applications for new ACA plan enrollments will be taken starting October 1, 2013, with January 1, 2014 effective dates. All individual health insurance plans will be available to everyone who wants one….with no health questions, no medical review, no pre-existing condition exclusions or concerns, and no premium rate-ups due to health history. This is great news for many. And ACA’s “Individual Mandate” requires all Americans to have ACA-qualified health insurance or to pay an annual tax penalty. Enrollment in the state Medi-Cal program, or in Medicare, counts as ACA-qualified health insurance.
What are the premiums for these new ACA-compatible plans? Well, at the time of this writing (late July), we don’t yet know. The many new requirements added to health insurance regulations by the ACA will make some people’s rates much higher, some modestly higher, and for some – modestly lower. Since enrollment in the new January 1, 2014 (effective date) plans is expected to begin on October 1, we hope to know plan benefit designs and premiums on or before that date.
Should I buy a new plan from the Covered California Marketplace or from the private market? Most likely, it will only make sense for you to buy your new 2014 health insurance through the Covered California Marketplace if your income level (AGI) as shown on your 2012 IRS tax return is below 400% of Federal Poverty Level (FPL) which equates to about $46,000 (for a single income tax filer). If you qualify, your annual premium payment for a “Silver Level Plan” (the second lowest benefit plan level of ACA’s 4 defined levels of benefit plans) would be 9.5% of your 2012 AGI or lower.
So if you made $46,000 annually, your monthly premium could be about $364, with the Federal “Annual Premium Tax Credit” paying the balance of your premiums (not available when purchasing health insurance from the private market). Plus you may also be eligible for a “Cost Sharing Subsidy” which will lower your share of the deductible, co-pays and annual maximums.
For more information on the ACA, I invite you to visit the following link to view a 7 minute video created by the non-profit Kaiser Family Foundation (not connected with Kaiser Permanente) that gives a comprehensive and low-key overview of many of ACA’s coming changes: http://kff.org/health-reform/video/youtoons-obamacare-video/. Or give me a call as I am glad to answer your individual questions.
Bill Robinson has been a licensed agent for 31 years, and he is owner of Palm Canyon Insurance Agency in Palm Springs.