With little more than a month to go before the March 31 deadline to enroll in insurance through the health exchanges many Americans are still confused about Obamacare, including how to sign up and how it could affect their pocketbooks.
The Affordable Care Act began providing insurance coverage to people at the beginning of the year. So, far some 3.3 million people have signed up for health insurance through the state and federal exchanges through February. Though it is still unclear how many people have paid their premiums, the Obama administration says they are on track to enrolling their goal of 7 million people by the open enrollment deadline at the end of March.
A new poll from the Urban Institute found that about a third of Americans are still unfamiliar with the health care law, and a Bankrate poll shows the majority have no idea what the deadline is to enroll. Since the law is aimed at only 15 percent of the adult population in the U.S. (85 percent of Americans have health care insurance through their employers or individually), these statistics are not out of line.
On top of that, the administration has made numerous changes in the rules and deadlines, adding to consumer confusion.
To help consumers get a better understanding of the Affordable Care Act, The Fiscal Times has assembled a user guide to Obamacare. If your questions weren’t answered, feel free to submit them in the comment section below.
How do I sign up, and is the website working better? Consumers can visit either the federal exchange website—HealthCare.gov, or, if you live in a state with its own marketplace you will be redirected to that website. There, you can shop around for coverage, look at the different plans offered and determine whether you qualify for financial assistance. Despite months of technical issues, officials say the websites are working for the vast majority of users. However, if you encounter a problem or wish to use an alternative, you can sign up via the call centers, or in-person through navigators.
When is the deadline to sign up? The open enrollment period ends on March 31. So, consumers have until then to sign up for coverage this year. Those who do not have health insurance before then--whether it was purchased on the marketplace or through their employer-- will be required to pay a penalty. The next open enrollment period opens November 14.
Consumers must sign up by February 15 to have coverage take effect on March 1. You can still enroll after that deadline; you just won’t have health coverage until April 1. Originally, those without active coverage on March 31 would pay a penalty, but now, as long as you’ve signed up and paid for your plan before then, you will avoid the tax penalty.
How much is the penalty? Under the ACA’s individual mandate, the penalty in 2014 for not having health insurance is $95 per adult and $47.50 per child. The alternative is 1 percent of your total household income, whichever is greater up to a maximum equal to the national average annual premium for a “bronze” health insurance plan. The CBO estimates this to be approximately $5,000 for an individual in 2016 and $12,000 for a family. If you fail to obtain coverage, the fee will be applied to your annual taxable income for each month you don't have health insurance beginning after March 31. In 2015, the penalty increases to 2 percent of your income. In 2016, it’s 2.5 percent of your income; by 2017, it will increase by the rate of inflation.
There are exemptions to the penalty, however. Including those who pay more than 8 percent of their household income for health coverage. As well as people with incomes below the threshold required for filing taxes--$9,750 for an individual and $27,100 for a family of four in 2012. There is also the ACA’s so-called “hardship exemption” that exempts people from the penalty. (This is made on a case-by-case basis and ruled through the marketplace.)
What kinds of plans are offered under the new exchanges? There are four types of plans available. The bronze plan pays 60 percent of medical costs and has the lowest premiums; the silver plan—the standard plan-- pays 70 percent of costs; the gold plan pays 80 percent; and the most robust plan, the platinum, pays 90 percent of costs and has the highest premiums. In all cases, the lower the premium, the higher the deductible. There’s also the catastrophic plan offered only to those 30 and under or those with the hardship exemption. These plans contain very barebones coverage and have very narrow provider networks.
Do I get to keep my doctor? That depends. Many plans purchased under Obamacare contain narrow networks in order to keep the cost of premiums relatively low. This means plans have limits on the doctors and hospitals available. According to a study by McKinsey and Co, approximately 70 percent of the exchange plans are either narrow or ultra-narrow plans. Insurers narrowed network plans before Obamacare. As The Washington Post’s Sarah Kliff points out, narrowed networks grew from 15 percent of employer-based plans in 2007 to 23 percent in 2012.
I heard some of the top hospitals aren’t accepting Obamacare, is that true? Yes. Since Obamacare offers more inexpensive plans, insurers will also be providing less money to hospitals for their services. So, some of the nation’s best hospitals, which would have to provide their more expensive care for much less, are simply opting out of Obamacare. A report by Watchdog.org found that 11 out of the top 18 hospitals in the country are not accepting plans purchased through the exchanges.
How expensive are Obamacare plans compared to employer-based coverage? Though it depends on which plan you select, several studies have found that premium prices on Obamacare policies are generally cheaper than employer-based coverage. However, deductibles on these plans tend to be more expensive. A report by PwC’s Health Research Institute, found that the average cost of premiums sold on ACA exchanges are about $5,844 annually —or 4 percent less than the average cost of $6,119 for an employer-provided plan with comparable benefits. However, a study by HealthPocket Inc. found that the average individual deductible for Obamacare’s bronze plan was $5,081 a year—42 percent higher than the average deductible of $3,589 for an individually purchased plan.
Who qualifies for subsidies? Consumers earning up to 400 percent of the federal poverty level, or about $46,000 for an individual or $94,000 for a family of four, may qualify for financial assistance. The amount of the subsidy depends on income and the type of plan consumers select. People eligible for subsidies must be United States citizens and are not eligible for coverage through and employer-based plan or through Medicare or Medicaid.
So far, 82 percent of the total Obamacare enrollees have qualified for some sort of tax credit or subsidy.
Where can you find out if you qualify for a subsidy? The state or federal exchange websites have calculators that determine whether you qualify for a subsidy and how much it would be, based on your income level. This is part of the online enrollment process. The Kaiser Family Foundation also has a helpful subsidy calculator hereà
How does the subsidy work? If you qualify for a subsidy during the application and enrollment process, you will be asked whether you want your subsidy applied toward your health insurance premiums on a month-to-month basis or you can claim it on your 2014 federal tax return.
Some people may qualify for an additional subsidy in order to lower copayments or deductibles. These would be provided directly to the health insurance company from the government.
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