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What Happens if Republicans Repeal the Obamacare Individual Mandate?

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

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Senate Republicans on Tuesday proposed to repeal the individual mandate under the Affordable Care Act by 2019 as a part of their tax reform plan.

With open enrollment for 2018 Obamacare coverage well underway, and after two failed attempts earlier this year to repeal the ACA, the Senate’s proposal has reignited feelings of uncertainty over the health care law’s future.

The Senate’s proposal also came a couple of days before House Republicans’ planned Thursday vote on their own tax reform bill. (The House’s version does not propose to touch the insurance coverage requirement.)

Part of the reason behind the Senate’s proposal to cut the individual mandate is to help free up federal dollars and partially offset a sweeping $1.5 trillion tax cut proposal. Without the mandate, fewer people would likely sign up for coverage and that would mean less money the government would need to spend on the tax subsidies it offers to balance out the cost of premiums for millions of Obamacare enrollees.

The Congressional Budget Office estimates that if the individual mandate is eliminated, it will save the federal government $338 billion, and 13 million more people — mostly the young and healthy — will be uninsured by 2027.

Here is what you need to know about the individual mandate and what it means if it goes away:

What is the individual mandate?

The individual mandate is a provision under the ACA that requires most U.S. citizens and noncitizens who lawfully reside in the country to have health insurance. It was signed into law in 2010. Consumers who can afford health insurance but choose not to buy it have to pay tax penalties unless they are otherwise insured or meet certain exemptions.

The purpose of the mandate was partially to ensure that even healthy and young Americans would sign up for health coverage, balancing the so-called insurance risk pool and helping to keep premiums affordable.

Why is the mandate unpopular?

The provision has been widely unpopular since its introduction. The Kaiser Family Foundation’s latest poll suggests that 55 percent of Americans supported the idea of removing the individual mandate as part of the Republican tax plan.

More than 27 million people in the United States remained uninsured in 2016, the foundation reported, down from 47 million prior to the implementation of the ACA.

How does the individual mandate work?

The tax penalty for nonexempt individuals who do not sign up for health coverage is calculated as a percentage of household income or as a fixed amount per person. You’ll pay whichever is higher.

For 2017 the penalty was either:

  • $695 per adult and $347.50 per child, up to $2,085 per family, or
  • 2.5 percent of household income

The maximum penalty can be no more than the national average price of the yearly premium for a Bronze plan (the minimum coverage available in the individual insurance market) sold through the insurance marketplace.

HealthCare.gov hasn’t yet published the 2018 guidance, but Kaiser has launched a calculator using 2018 projections from Bloomberg BNA. For 2018, the calculator estimates the amount of penalty is $3,816 for a single person and $19,080 for a family of five or more, according to the foundation.

2018 Individual Mandate Penalty Calculator

Some people are exempt from the penalty

You meet exemptions if coverage is considered unaffordable based on your income — under the ACA, “unaffordable”’ is if you would have had to pay more than 8.05 percent of your household income for the annual premium amount for health coverage in 2015 or 8.13 percent last year.

If you have experienced economic hardships or difficult domestic situations, such as homelessness, the death of a family member, bankruptcy, substantial medical debt or the toll of a disaster that damaged your property badly, you may apply for a hardship exemption.

People who are ineligible for Medicaid because their state hasn’t expanded that program also qualify for a hardship exemption. Those whose incomes are at or below 138 percent of the federal poverty level are eligible for Medicaid. That 138 percent means a little over $16,600 every year for a single person and nearly $34,000 for a family of four.

See more examples of people who qualify for penalty exemptions at IRS.gov.

You can find out if you are exempt from health care coverage using this tool:

What does it mean if the individual mandate is lost?

The immediate concern is that without fear of a tax penalty, not enough young, healthy people would get covered. When these low-risk people drop out of the market, coverage is skewed toward older, sick people who really need coverage. And that can lead to rapid increases in premium costs and even induce some insurers to drop out of the market.

Larry Levitt, senior vice president for special initiatives at the Kaiser Family Foundation and senior adviser to the foundation president, summarized his thoughts on the loss of the mandate in a series of tweets Wednesday, saying he’s “doubtful” insurers would remain in the marketplace if the mandate were removed:

Senate Majority Leader Mitch McConnell, R-Ky., defended the proposed repeal in a statement on Wednesday.

“We can deliver even more relief to the middle class by repealing an unpopular tax from an unworkable law,” he wrote. “It just makes sense.”

Shen Lu
Shen Lu |

Shen Lu is a writer at MagnifyMoney. You can email Shen at shenlu@magnifymoney.com

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The Ultimate Guide to Obamacare (Updated for 2018)

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

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Since Obamacare (or, as it’s officially known, ACA, the Affordable Care Act) created the first federal health insurance marketplace in 2013, some 20 million Americans have become newly insured.

Consumers who don’t qualify for Medicaid or Medicare or who don’t have private insurance through their employer can shop for health coverage either through the federal marketplace — HealthCare.gov — or by way of their state’s exchange.

This year, ACA applicants will have to wade through an average of 30 plans from two or three different insurers to make their insurance choice. The open enrollment period for Obamacare coverage begins Nov. 1 and ends Dec. 15, with coverage due to begin Jan. 1, 2018.

That’s where this guide will come in handy. We will explain exactly what it’s like to enroll, what documents you should have on hand, and, of course, how to sort through all the health insurance options you may find.

Have any burning Obamacare questions? Send us a note at info@magnifymoney.com.

Part I: What is Obamacare?

Most people use the blanket term “Obamacare” when they talk about President Barack Obama’s signature health care legislation, 2010’s Patient Protection and Affordable Care Act (ACA). The ACA touched almost every aspect of the health insurance industry. It had implications for employer-run health insurance plans. For government health plans, too.

One of the most visible features of the ACA was the creation of federal and state health care exchanges that sell health insurance to people who don’t have affordable coverage through other means. Many people who buy health insurance through the exchanges say they purchased Obamacare plans.

Some of the important features of these plans include:

  • Accessibility: All Americans may purchase health insurance through a federal or state-run health exchange even if they have a pre-existing condition.
  • Standardization: All health insurance plans must cover preventive care at 100 percent, and they must cover the costs associated with most medical procedures.
  • Affordability: The ACA offers tax credits and cost-reduction subsidies to limit the monthly premium costs for people earning less than 400 percent of the federal poverty line. Insurers may use age and smoking status to set monthly premium costs, but no other factors may be considered.

It’s also important to note that the ACA has a requirement called the individual mandate. You must get health insurance coverage, or you will most likely pay a penalty at tax time. You can get qualified health insurance through your employer or a government program. However, if you don’t get it there or through some other source, you will need to purchase an Obamacare plan or pay that penalty.

Who can buy insurance through a health care exchange?

Most Americans can purchase health insurance through a health care exchange. If you do not receive insurance through your employer and you don’t qualify for Medicaid or Medicare, then you are likely eligible.

Most long-term, legal immigrants to the United States may purchase insurance. HealthCare.gov maintains a comprehensive list of qualified immigration statuses for purchasing insurance through the marketplace.

Most large employers and some midsize or small companies offer health insurance benefits to their employees. If your employer offers affordable health insurance to you (costing less than 9.56 percent of your total income), you will not qualify for health insurance subsidies through the exchanges.

Incarcerated people and those living outside the United States cannot purchase insurance through the marketplace.

Part II: Obamacare costs and tax subsidies

One major factor to consider when weighing the options is your expected tax subsidy. Most people buying insurance through the health care exchanges will qualify for a health insurance subsidy. This subsidy is applied in the form a credit that immediately reduces the cost of your Obamacare plan coverage.

According to a study from the Centers of Medicare and Medicaid Services, 84 percent of people who purchased insurance through a health care exchange qualified for a health insurance subsidy in 2017. The average subsidy was about $371 in 2017.

With the subsidy applied, nearly eight out of 10 (77 percent) health insurance purchasers paid less than $100 a month for their health insurance premiums in 2016.

To qualify for a subsidy, you must meet three standards:

  1. You must not have access to affordable insurance through an employer (including a spouse’s boss).
    1. Affordable insurance for 2018 is defined as individual coverage through an employer that costs less than 9.56 percent of your household’s income.
    2. You can check that your insurance offers minimum-value coverage by having your human resources representative fill out this form.
  2. You must have a household modified adjusted gross income between 100 and 400 percent of the federal poverty line.
    1. You can calculate modified adjusted gross income using this formula:
      1. Adjusted gross income (Form 1040 Line 37) +
        Nontaxable Social Security benefits (Form 1040 Line 20a minus 20b) +
        Tax-exempt interest (Form 1040 Line 8b) +
        Foreign earned income and housing expenses for Americans living abroad (Form 2555)
  3. You’re not eligible for coverage through Medicaid, Medicare, the Children’s Health Insurance Program (CHIP) or other types of public assistance. Some states have expanded Medicaid to anyone who earns up to 138 percent of the federal poverty line.

How can I calculate my subsidy?

The easiest way to calculate the subsidy you will receive is to use a subsidy estimator from HealthCare.gov or the Kaiser Family Foundation. Both calculators estimate your subsidy based on the information you provide. They also help you understand what factors affect your subsidy estimations.

Your income, household size and the cost of premiums in your state factor into your subsidy. Premium tax credits can help reduce the amount that you will spend on monthly premiums to a set percentage of your income. You will receive the same subsidy, no matter which plan you ultimately choose.

Below you can see the maximum amount you will spend on insurance premiums (for a silver plan) based on your income.

Income (based on 2017 federal poverty line)

Max monthly Silver Plan premium cost after subsidies

Special notes


Lower 48 states:
$12,060-$16,702



Alaska:
$15,060-$20,857



Hawaii:
$13,860-$19,195


Lower 48 states:
$20.20-$46.21



Alaska:
$25.23-$57.70



Hawaii:
$23.22-$53.11

Check if you qualify for expanded Medicaid.


Lower 48 states:
$16,703-$30,209



Alaska:
$20,858-$37,724



Hawaii:
$19,196-$34,718


Lower 48 states:
$47.05-$203.91



Alaska:
$58.75-$254.64



Hawaii:
$54.07-$234.35

You will qualify for cost-reduction subsidies if you purchase a silver plan.


Lower 48 states:
$30,210-$48240



Alaska:
$37,725-$60,240



Hawaii:
$34,719-$55,440


Lower 48 states:
$203.92-$384.31



Alaska
$254.65-$479.91



Hawaii:
$234.36-$441.67

If you earn more than 400% of the poverty line, you will not qualify for subsidies.

Income (Based on 2017 federal poverty line)

Max monthly Silver Plan premium cost after subsidies

Special notes


Lower 48 states:
$24,600-$34,069



Alaska:
$30,750-$42,587



Hawaii:
$28,290-$39,179


Lower 48 states:
$41.21-$94.26



Alaska:
$51.51-$117.82



Hawaii:
$47.39-$108.39

Children will qualify for CHIP. Check if you qualify for expanded Medicaid.


Lower 48 states:
$34,070-$49,200



Alaska:
$42,588-$61,500



Hawaii:
$39,180-$56,580


Lower 48 states:
$95.97-$259.94



Alaska:
$119.96-$324.93



Hawaii:
$110.36-$298.93

Children in 46 states will qualify for CHIP. You may qualify for extra savings if you purchase a silver plan.


Lower 48 states:
$49,201-$61,621



Alaska:
$61,501-$77,027



Hawaii:
$56,581-$70,864


Lower 48 states:
$259.95-$415.94



Alaska:
$324.93-$519.92



Hawaii:
$298.94-$478.33

In some states, children will qualify for CHIP. You may qualify for extra savings if you purchase a silver plan.


Lower 48 states:
$61,622-$98,400



Alaska:
$77,028-$123,000



Hawaii:
$70,865-$113,160


Lower 48 states:
$415.96-$783.92



Alaska:
$519.94-$979.90



Hawaii:
$478.35-$901.51

In a limited number of states, children qualify for CHIP up to 375% of the poverty line. If you earn more than 400% of the poverty line, you will not qualify for subsidies.

What circumstances might affect my eligibility for a subsidy?

Your subsidy can change if your circumstances change. It’s important to plan for such circumstances.

(Read ahead: “What happens if I don’t qualify for a subsidy?”)

Families with children:

Instead, they will receive free or low-cost insurance through CHIP. You can enroll your children in CHIP through the health insurance marketplace, or by calling 1-800-318-2596. You may need to speak with a Medicaid agent in your state to see if you qualify. You can also learn more about CHIP through InsureKidsNow.gov.

Your children may qualify for CHIP even if you and your spouse qualify for an employer-sponsored health insurance plan, though this rule varies by state. In some states, families that have children and employer-based coverage may receive financial assistance to purchase the coverage.

CHIP does not have enrollment deadlines, so you can apply at any time.

Families where one spouse has work coverage:

Some employers only offer health insurance to their employees. Spouses and children cannot get covered. In that case, you can buy insurance with a subsidy through the marketplace.

Families with expensive employer coverage:

If you can purchase family coverage through your or your spouse’s employer, then you will not qualify for subsidies. If an employee can gain individual coverage for himself or herself for less than 9.56 percent of total household income, the insurance is considered affordable. Coverage for the family isn’t factored into the affordability calculation.

This so-called “family glitch” affects two million to four million people and requires them to pay high prices for premiums. If you are caught in this situation, your children may qualify for CHIP. However, uncovered spouses and children must purchase insurance or pay the individual mandate penalty unless coverage for the family costs more than 8.05 percent of your household income. Even in those cases, you will still not qualify for premium assistance.

Senator Al Franken, D-Minn., has proposed a Family Coverage Act that may rectify the tax code, but it has not been passed.

Individuals getting married in 2018:

If you’re getting married next year, your subsidy depends on your combined income. In the months preceding your marriage, your income is one-half of your and your spouse’s combined income. Once you get married, your subsidy is based on your joint income and your qualifying family.

You need to report a marriage to be eligible for a special enrollment period on HealthCare.gov or through your state’s insurance exchange.

Individuals getting divorced in 2018:

If you get divorced or legally separated in 2018, you must sign up for a new health insurance plan after you separate. Your subsidy will be based on your income and household size at the end of the year. However, you will need to count subsidies received during your marriage differently than subsidies received when you’re legally separated.

For the months you are married, each spouse divides advanced subsidies received to each new household. If spouses cannot agree on a percentage, the default is 50 percent. If the plan only covered one taxpayer and his or her dependents, then the advanced tax credits apply 100 percent to that spouse.

Divorce reduces your income, but it also reduces your household size. These factors change your estimated subsidy. How much will depend on the magnitude of each change.

Reporting a divorce makes you eligible for a special enrollment period. When you enroll in a new plan, the exchange website will help you estimate your new subsidy for the remainder of the year.

Giving birth or adopting a child:

You have 60 days from the birth or adoption of your child to enroll him/her in a health care plan. If you miss this window, your child will not have health coverage, and you will pay a penalty. However, if you enroll your child in a timely manner, you can expect your subsidy to increase.

Report the birth or adoption of a child to be eligible for a special enrollment period on HealthCare.gov or via your state’s insurance exchange.

A newborn or adopted child may be eligible for CHIP rather than subsidized health insurance.

Turning 26:

If you’re on your parents’ insurance, generally you can stay until you have turned 26, but you should check your plan to be sure. You will have a 60-day special enrollment period to get your own plan from the health care exchange when you turn 26.

You may also be eligible for a special enrollment period from an employer-sponsored health plan. If you fail to have health insurance for more than three months, you will pay a penalty.

Losing employer coverage:

If you lose employer-based health coverage, you can either enroll in COBRA or purchase a plan through the health care exchange. Once you enroll in COBRA, you become ineligible to purchase subsidized coverage through the exchange.

You need to report job status changes to be eligible for a special enrollment period on HealthCare.gov or your state’s insurance exchange.

Changes in income:

Premium tax credits are based on your annual income. If you increase your income, you will be expected to pay back some or all of the advance premium you received. If you earn more than 401 percent of the federal poverty line, all premiums need to be repaid. If you earn less than 400 percent of the federal poverty line, you may have to pay back $2,500 of advanced premiums per family or $1,250 for individuals.

You need to report income changes to avoid under- or overpaying on your premiums throughout the year.

Moving states or counties:

Most insurance plans that you purchase through the marketplace are state- and county-specific. If you move, you need to report the relocation through the insurance exchange. You may have to change insurance plans after moving. Moving to Alaska or Hawaii will allow you to claim a greater subsidy amount than you can claim in the lower 48 states. If you move from Alaska or Hawaii, you can continue to claim the higher subsidy amount for the whole year.

Part III: Bronze, silver, gold, platinum: Choosing the right Obamacare plan for your needs

The health care exchanges — both federal- and state-run — classify health insurance plans into four categories: bronze, silver, gold, and platinum. Metal categories are based on how you and your plan split the costs of your health care.

According to a 2016 study by the Department of Health and Human Services, 76 percent of consumers who bought a silver plan in 2016 stood to save an average of $58 a month by switching to the lowest-premium plan in 2017.

But that doesn’t meant the cheapest plans are necessarily best for you. They often come with higher out-of-pocket expenses, like deductibles, which can make them very expensive if you end up needing lots of medical care through the year.

Think of this way — the higher the premium, the more comprehensive the coverage will be and the lower your out-of-pocket costs. If you expect that you’ll need fairly frequent medical care or treatment, you might be better off choosing a more comprehensive plan despite the higher monthly premium.

Obamacare ‘Metal’ Plans: Explained

Bronze Plan

Cheapest premium, 60% coverage

Bronze health plans offer the least amount of estimated coverage. Insurers expect to cover 60 percent of the health care costs of the typical population. These plans feature the lowest monthly premiums, the highest deductibles and high out-of-pocket maximum expenses. Just under one-quarter (23 percent) of health insurance enrollees opted for a Bronze plan in 2017.

Silver Plan

Moderate premium, 70% coverage

Silver health plans offer moderate estimated coverage. Insurers expect to cover 70 percent of health care costs, and plan members cover the remaining 30 percent. If you qualify for cost-reduction subsidies (also called “extra savings”), you must purchase a silver plan. In 2017, 71 percent of all participants in the health care exchanges opted for a silver plan.

Gold Plan

High premium, 80% coverage

Gold health plans offer high levels of estimated coverage. Insurers expect to cover 80 percent of health care costs, while plan members cover the remaining 20 percent. These plans feature high monthly premiums, but lower deductibles and out-of-pocket maximums. Only 4 percent of all health insurance consumers on the health care exchanged opted for a gold plan in 2017.

Platinum Plan

Highest premium, 90% coverage

Platinum health plans offer the highest level of protection against unexpected medical costs. Insurers expect to cover 90 percent of medical costs, and plan members cover the remaining 10 percent. These plans have the highest monthly premiums and the lowest deductibles and out-of-pocket maximums. Just 1 percent of all health insurance exchange participants purchased a platinum plan in 2017.

Catastrophic Plans

Cheapest premium, lowest coverage

Catastrophic health plans: People under age 30 or with hardship exemptions may purchase individual catastrophic health insurance plans. These plans are not available for families. Catastrophic plans do not have a cost-sharing component. Your out-of-pocket maximum will be $7,350. Once you reach $7,350 in medical expenses, your insurance company will pay the remaining costs.

Catastrophic plans cover most preventive services. Catastrophic plans generally offer the lowest monthly premiums, but you can’t use a premium tax credit to reduce your monthly cost.

Now that you know all the types of plans offered, it’s time to choose the one that fits your needs.

What to consider before choosing a plan

Choosing a health plan can seem like a daunting task, but you can get all the help and information you need to make an informed decision. Your health and your pocketbook matter, and we want to help you protect both.

Your tax subsidy: Before you choose a plan, you’ll decide whether to receive advanced or deferred subsidies.

If you take your subsidy upfront, it will reduce your premiums right away. If you defer it, then it will be given to you as a tax credit when you file your taxes. If you over- or underpay your premiums throughout the year, the will have to reconcile the amount owed at tax time.

Most people with predictable income and household size should take most or all of the subsidy upfront. However, if you expect to undergo a major life change (such as an increase in income, a marriage or a divorce), consider taking less of your subsidy in advance.

Time to shop. For people shopping for 2018 coverage, the average number of plans available is 30. Rather than comparing every plan, we recommend creating criteria around the following variables:

  1. Monthly cost: Consider how the monthly premium will affect your budget. This does not mean you should choose the plan with the lowest premiums, but you should consider the price. People without chronic conditions who have adequate emergency savings may want to at least consider opting for an option with low monthly premiums.
  2. Deductible and co-insurance: Do you have the emergency fund or income you need to cover a small medical emergency? A broken arm, stitches or an unexpected infection can result in hundreds of dollars in medical costs. If you have a high-deductible plan, you’ll need to cover these costs without help from the insurance company. If possible, choose a plan with a deductible that you could comfortably cover out of your savings or income.
  3. Maximum yearly cost: Add the annual cost of your premiums and your out-of-pocket maximum to determine your maximum yearly cost. In a worst-case scenario, this is the amount you will pay out of pocket. People with chronic conditions that require heavy out-of-pocket fees should try to limit their maximum yearly cost. A plan with a higher maximum yearly cost may represent a higher risk.
  4. Services and amenities: All insurance plans from the marketplace cover the same essential health benefits, but some offer more unique services such as medical management programs, vision and dental coverage.
  5. Health savings accounts: If you choose a high-deductible plan, you may want to opt for one lets you contribute to a tax-advantaged health savings account. Any money you contribute to this account (up to annual established limits) reduces your taxable income, and will not be taxed upon withdrawal when it used for medical expenses.
  6. Network of providers. It’s important to be sure that your preferred medical providers contract with the plan you choose. Not every doctor is “in network” with every insurance plan. You can check each plan’s provider directory before making a selection.

Once you have a firm grasp of your particular criteria, look for plans that fit your needs and ignore the rest.

Using the exchange website, you can filter and sort plans based on these factors. Most people need to balance cost and coverage to find a plan that works for them.

If you are part of the minority that need to buy their own health insurance plans, you should know that not every state uses HealthCare.gov to host their state’s health insurance exchange. Residents in the following states should use their specific state exchange to look for health insurance:

California; Colorado; Connecticut; Washington, D.C.; Idaho; Maryland; Massachusetts; Minnesota; New York; Rhode Island; Vermont; Washington.

Part IV: How to enroll in Obamacare

Applying for insurance takes 30-60 minutes if you have all the necessary information in hand.

Your Obamacare enrollment checklist:

  • Names, birthdates and Social Security numbers for all members of the household
  • Document numbers for anyone with legal immigration status
  • Income information for all coverage-holders
  • Information about employer-sponsored health plans
  • Tax return from previous year (to help predict income)
  • Student loan documents
  • Alimony documents
  • Retirement plan documents
  • Health Savings Account documents

State or federal marketplace?

If your state does not offer its own health care exchange, you should use HealthCare.gov. As mentioned in the previous section, each state has the right to choose whether to run its own or use the federally run exchange and some do use their own.

The state-run exchanges perform the same functions as the federally run exchange. They allow you to estimate your tax credit and purchase insurance. As a consumer, you must provide the same information to your state as you would on the federal exchange.

While the online user experience will vary when states adopt their own online marketplace, the Affordable Care Act is a federal law and program. This means that the requirements and benefits do not change from state to state, even if the exchange platform changes.

The website interface for the federal exchange is simple, but answering the questions may be confusing. It’s important to fill out the application as accurately as possible so you can enroll in the best health insurance plan for you.

We’ve done our best to clarify the confusing portions in our step-by-step process below.

Filling out your Obamacare application

Family and household info

Start the application by filling out contact information and basic information about members of your household. Even if a member of your family will not need coverage, include that relative in your application.

The website will help you determine if a member of your household has insurance options outside the health care exchange. It will also help you determine if a person is a dependent. For the purpose of the health care exchange, your family includes all the people included on your income tax filing.

You need to know Social Security numbers, birthdates, immigration and disability status, and whether each household member can purchase health insurance through an employer plan.

Income and deductions

Next you’ll estimate your income for the coming year. Include all the following forms of income:

  • Jobs
  • Self-employment income (net)
  • Social Security benefits
  • Unemployment income
  • Retirement income
  • Pensions
  • Capital gains
  • Investment income
  • Rental/royalty income
  • Farming and fishing income
  • Alimony received

Afterward you’ll enter deductions. The application calls out student loan interest and alimony paid, but you should estimate all “above-the-line deductions” that should be included. These include:

  • Retirement plan contributions: 401(k), 403(b), 457, TSP, SEP-IRA, simple IRA, traditional IRA
  • Contributions to a Health Savings Account
  • Self-employed health insurance premiums
  • Tuition and fees paid
  • Educator expenses (up to $250 per teacher)
  • Half self-employment tax
  • Moving expenses
  • Early-withdrawal penalties from a 1099-INT

Do not double-count income or deductions since you’ll fill out these forms for each person. If you make a mistake, you can edit it when you review your household summary.

Additional information

Finally, you’ll fill out a few other miscellaneous details that will allow the application to confirm that you are eligible for subsidies or marketplace insurance.

It’s especially important that you have accurate information about job-related coverage for you and your family. This information will determine your eligibility for subsidies and other government programs.

Completing Obamacare enrollment

After you complete the application, you can review and submit it. At this point, the system will suggest which members of your household should complete CHIP or Medicaid applications. The remaining family members can enroll in a health insurance plan.

Part V: Where to get help enrolling In Obamacare coverage

Because of the complex nature of the marketplace exchange, there are marketplace navigators. These professionals provide free, unbiased help to consumers who want a hand filling out eligibility forms and choosing plans.

Marketplace navigators. You can find local marketplace navigators through the health care exchange website.

Be advised: The Trump administration has slashed budgets for health care navigators, leading some states to close down the programs altogether. As a result, it may make it difficult to find help locally from a navigator in some states.

Nonprofit organizations. Outside the exchange, nonprofit organizations are working to help people gain coverage by teaching them about their insurance options. Enroll America offers free expert assistance to anyone who makes an appointment. You can use the connector below to make an appointment with one of their experts.

Insurance brokers. Brokers can offer another form of help. Brokers aim to make it easier for consumers to compare insurance plans and apply for coverage. Insurance brokers have relationships with some or all of the insurance companies on the marketplace. Using a broker will not increase the price you pay for a plan, and it will not affect your subsidies. However, here’s another important note: Online brokers may not have 100 percent accuracy regarding a plan’s details. It’s important to visit a plan’s website before you enroll in a plan.

If you want to work with a broker, consider some of these top online brokers. PolicyGenius compares all the plans that meet criteria that you establish, and they serve up the top two plans that meet those criteria. HealthInsurance.com makes applications quick and easy, and the site specializes in special enrollment help.

Medicare plan finder. If you’re over age 65, use Medicare Plan Finder to find a Medicare plan that works for you.

CHIP: Likewise, if you think your children qualify for CHIP, use Insure Kids Now to enroll them in your state’s plan.

PART VI: Frequently asked questions

What happens if I don’t apply for insurance?

In most cases, you must enroll in health insurance or you’ll have to pay a penalty.

The penalty for 2018 hasn’t yet been released, but the 2017 penalty was calculated as the greater of 2.5 percent of your income (up to the national average cost of a bronze plan) or $695 per adult and $347.50 per child (up to $2,085).

This steep penalty means that most people are better off purchasing some health insurance.

However, under certain circumstances you can avoid buying insurance and avoid paying the penalty. These are a few of the most common exemptions:

  • Health care cost-sharing ministry members: Must show evidence of membership
  • Low income, no filing requirement: If you do not earn enough income to file taxes, then you are automatically exempt from paying a noncoverage penalty.
  • Coverage is unaffordable: For 2017, if you, your spouse, or your dependents cannot obtain employer coverage or a bronze plan for less than 8.05 percent of your income (after applicable subsidies), you may opt out of coverage. (However, if your individual coverage from an employer costs less than 9.56 percent of your income, and your employer offers family coverage, nobody in the family will qualify for subsidies).
  • Short coverage gap: You went without insurance for less than three months.
  • Living abroad: No coverage is required if you live abroad for at least 330 days.
  • General hardships:These include homelessness, eviction, foreclosure, unpaid medical bills, domestic violence and more.  (You must get a marketplace exemption.)
  • Unable to obtain Medicaid: If you earn less than 138 percent of the federal poverty line, and your state didn’t expand Medicaid, you don’t have to purchase health insurance.
  • AmeriCorps coverage
  • Members of qualified religious sects: Must be granted exemption through HealthCare.gov.

Although you will not pay a penalty, you may still want to seek out catastrophe insurance or some other coverage to help with high potential health costs.

What happens if my plan was canceled?

For 2018, some insurers dropped their insurance plans from the health care exchange. In some states, major insurers Aetna and Humana are exiting the exchange. As a consumer, you cannot assume that the plan you chose in the past will be around next year.

If you used HealthCare.gov in the past, and your insurance plan remains in place, you’ll automatically be enrolled in the same plan again this year. This is true even if important variables like the deductible and premiums changed from last year.

If your plan was canceled, HealthCare.gov will automatically enroll you into a new health insurance plan with a price and coverage quality comparable to your previous plan’s.

Although the federal exchange will help you opt into a new plan (ensuring that you have some health insurance coverage), it’s far better to select a new plan on your own. You can enroll in a new plan Nov. 1 through Dec. 15. If you do not enroll in a new plan during this time, you will be stuck with the automatic enrollment option.

Whether you’re shopping for a new plan or reviewing an old plan, take these steps before open enrollment ends.

  • Update personal information on your application. Your income, household size, where you live and more will affect plan and subsidy eligibility. It’s important to keep your application up to date. The plan that fit you last year may no longer be appropriate, but you won’t know unless you keep the information current.
  • Review your plan before you re-enroll. You should receive a notification in the mail if your plan has been changed or canceled. Take the time to understand if the changes affect you.
  • Compare plans that fit your needs. Consider enlisting free help from a health care navigator, a nonprofit or a broker to help you decide.
  • Choose the plan that best fits your needs and your budget.

What options do students (and their dependents) have for health insurance?

University students who are enrolled full time have multiple options for health insurance.

Under age 26: All student under age 26 may continue to receive coverage from their parents’ insurance plan even if living in another state. Of course, it may make more sense to gain coverage in the state where you’re living, so review the coverage network with your parents. Many coverage networks only include doctors in a few ZIP codes.

If you visit an out-of-network doctor, you will face higher deductibles and out-of-pocket maximums. As an alternative to staying on your parents’ plan, you can purchase your own health insurance plan through the health care exchanges even if you are a dependent.

Students who are dependents and over age 26 may be required to purchase their own health insurance plans.

University coverage: Many students will opt for a student health plan from their university. In general, student health plans meet minimum qualifying coverage criteria, and are affordable options. However, student health plans are not treated as employer coverage. Because of that, students may still qualify for Medicaid or insurance premiums. Students (especially independent students) should look into these alternatives when reviewing their insurance options.

The spouses and dependents of students must take time to understand their options. These are a few common scenarios:

If a student or spouse has an affordable employer-sponsored plan that covers family members: Student and spouse do not qualify for insurance subsidies or Medicaid. Children may qualify for CHIP. Student and spouse should seek coverage through either the student health plan or the employer-sponsored plan in most cases. All members of the family must have qualified health coverage, or they will pay the individual mandate penalty.

Student health plan doesn’t offer coverage for spouse or dependents, and neither spouse has an employer-sponsored health plan: Spouse and dependents can apply for Medicaid, CHIP or subsidized insurance through the health care exchanges (provided they meet income criteria). Student may choose any coverage option (including Medicaid or subsidized insurance) without paying a penalty.

Student health plan offers coverage of spouse or dependents, and neither spouse has an employer-sponsored health plan: Student, spouse and dependents may purchase the student health plan. They can also apply for Medicaid, CHIP or subsidized insurance through the exchanges (provided they meet income criteria). All family members may choose any coverage option without paying a penalty.

Where if I don’t qualify for a subsidy?

If you don’t qualify for a health insurance subsidy, you can still apply for health insurance through HealthCare.gov or your state’s health insurance exchange. However, some insurers offer more or different options outside the exchange. Anyone who doesn’t qualify for a health insurance subsidy should consider using an online broker instead to look for plans.

People who don’t qualify for a health insurance subsidy should reconsider their health insurance options in 2018. An analysis by the Kaiser Family Foundation said that a number of insurers have requested double-digit premium increases for 2018. Based on initial filings, the change in benchmark silver premiums will likely range from -5 to 49 percent across 21 major cities. (These rates are still being reviewed by regulators and may change, the analysis said.)

With rapidly rising costs, enrollees without subsidies may want to consider the lower-cost bronze plans to see if they meet their health insurance needs.

Part VII: The ultimate Obamacare glossary

Understanding basic health insurance terminology can help you make a more informed decision about your options. Here are common terms you should know.

This credit can be taken in advance to offset your monthly premium costs. The subsidy is based on your estimated income and can be taken directly from your insurer when you apply for coverage. You must repay credits if you qualify for a smaller subsidy once taxes have been filed. You can learn more about repayment limitations here.

This program was designed to provide coverage to uninsured children who are low-income but above the cutoff for Medicaid eligibility. The federal government has established basic guidelines, but eligibility and the scope of care and services are determined at the state level. Your children may qualify for CHIP even if you purchase an insurance policy through the health care exchange. You can learn about CHIP eligibility through the marketplace or by viewing this table at Medicaid.gov.

Your share of the costs of a covered health care service. This is the percentage you must pay out of pocket after you have met your annual deductible. You pay a specific coinsurance amount until you meet your out-of-pocket maximum.

If you earn between 100-250 percent of the federal poverty level, you may qualify for additional savings. This extra savings reduces your out-of-pocket maximum, and it offers assistance with copays and coinsurance.

Disclaimer: There is ambiguity surrounding whether or not Congress and the White House will appropriate funds for the cost sharing subsidies. In October, President Trump used an executive order to cut off funding for the subsidies. However, the Affordable Care Act still requires that health insurers must issue them to all people earning 100-250 percent of the federal poverty line. As a result of this Trump executive order, many insurers raised premiums for silver plans. The premium increases will not affect the prices that people with subsidies will pay, but they will affect the prices you pay if you do not qualify for a subsidy.

Until the Affordable Care Act or the cost sharing subsidies are repealed, insurers will continue to pay cost reduction subsidies in 2018.

A fixed amount you pay for a covered medical service, typically when you receive the service or prescription. Also commonly referred to as a “copay.”

The amount you pay for covered health services before your insurer begins to cover part of your costs. According to the IRS, a high-deductible health insurance plan is any plan with a deductible over $1,300 for an individual or $2,700 for a family.

Medical services are only covered if you go to doctors, specialists or hospitals in the plan’s network (except in an emergency).

These plans focus on integrated care and focus on prevention. Usually, coverage is limited to care from doctors who work for or contract with the HMO. Generally, out-of-network care isn’t covered unless there is an emergency.

Health Savings Accounts (HSAs) allow you to save and invest money for current or future medical expenses. You do not have to pay any taxes on money you contribute to an HSA, and you can withdraw the money tax- and penalty-free if you use the funds for a qualified medical expense.

You can only contribute to an HSA if your insurance meets the standards for a high-deductible insurance plan. Individuals can contribute up to $3,450 to a health savings account, and families can contribute up to $6,900 in 2018.

If you shop for insurance through Healthcare.gov, plans will indicate whether they are HSA approved. To be an HSA compatible plan, your deductible must be at least $1,350 for an individual or $2,700 for a family. The out of pocket maximums on these plans must be less than $6,650 for an individual or $13,300 for a family.

The out-of-pocket maximums required by the IRS do not line up with Affordable Care Act maximums, so many plans with high deductibles will not allow you to contribute to an HSA. If contributing to an HSA is an important part of your financial plan, be sure to filter for HSA compatibility on HealthCare.gov. And be advised: Not everybody will have an opportunity to purchase a subsidized HSA-compatible health insurance plan.

If you can afford to purchase health insurance and choose not to, you will be charged an individual shared responsibility payment, in the form of a tax penalty. There are a few qualified exemptions, outlined in the guide above, that allow you to avoid the fine. For example, if your employer-sponsored health plan costs more than 8.05 percent for individual coverage, you will not have to pay the fine (though you will not qualify for tax credits).

The fine for 2018 has not yet been released, and Congress has considered removing the individual mandate requirement for 2018. If it is removed, we will update this piece with the required information.

For the 2017 tax year, the individual mandate was calculated two ways:

  1. 2.5 percent of household income (up to the total annual premium for the national average price of the marketplace bronze plan)
    OR
  2. $695 per adult and $347.50 per child (up to $2,085)

You had to pay the greater of the two penalties.

Medicaid: A joint federal and state program that provides health coverage to low-income households, some pregnant women, some elderly Americans and people with disabilities. Medicaid provides a broad level of coverage including preventive care and hospital visits. Some states provide additional benefits as well.

If you were a foster child who “aged out” of foster care, you can continue to receive Medicaid coverage until age 26 with no income limitations.

Medicaid Expansion: Obamacare gives each state the choice to expand Medicaid coverage to people earning less than 138 percent of the federal poverty line. The primary goal of the ACA is reducing the number of uninsured people through both Medicaid and the health insurance marketplace. The Kaiser Family Foundation keeps track of expanded Medicaid coverage by state.

Medicare: Most people who are over age 65 and disabled people who have received Social Security Disability Insurance (SSDI) payment for 25 months in the United States will qualify for a Medicare Health Insurance Plan. Open enrollment for Medicare, which started Oct. 15, runs through Dec. 7. You can learn more about Medicare plans from the Medicare Plan Finder.

The amount you pay each month for your health insurance.

The highest amount you will pay for covered services in a year. In 2018, all health insurance plans sold through the Federal Health Exchange will have a out-of-pocket limits of $7,350 for an individual or $14,700 for a family plan.

You pay less for medical services if you use providers in the health plan’s network. You need a referral from your primary care doctor to see a specialist.

You pay less for medical services if you use the providers in your plan’s network. You may use out-of-network doctors, specialists or hospitals without a referral. However, there is an additional cost.

All health insurance plans purchased through the health care exchange cover some preventive care benefits without additional costs to you. These benefits include wellness visits, vaccines, contraception and more.

Most insurance plans have preferred pricing with a group of health care providers with whom they have contracted to provide services to members.

The federal subsidy for health insurance that helps eligible individuals or families with low or moderate income afford health insurance purchased through a health insurance marketplace.

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What to Expect from Obamacare Open Enrollment for 2018

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Open enrollment for Affordable Care Act coverage begins Nov. 1.

Although the future of the act and the health insurance marketplaces it created remains uncertain, that shouldn’t deter consumers from enrolling in coverage for 2018.

In fact, health care experts urge consumers who will be shopping for individual plans to act sooner rather than later. Not only is the window for shopping on the federal marketplace narrower this time around, but planned maintenance periods will further reduce the number of days that HealthCare.gov will be up and running.

Here is what you should expect from the coming open-enrollment period for coverage under the act, also known as Obamacare.

Key dates to mark on your calendar

The 2018 open-enrollment period extends from Nov. 1 through Dec. 15. The period is half as long as it was last year. Existing enrollees who miss the enrollment deadline will either be automatically enrolled in their existing health plans, or l be put into a comparable plan if their existing plan is no longer available.

Further reducing the amount of time consumers will have to enroll in plans, the U.S. Department of Health and Human Services has announced that HealthCare.gov will be taken offline for maintenance each Sunday during the enrollment period.

Consumers who live in states that run their own health care exchange websites might catch a break. Many of the 12 states, such as Colorado and Minnesota, have extended the enrollment window.

Plans purchased during open enrollment will become effective starting Jan.1, 2018.

Act early

If your insurer has exited the marketplace, you should have been notified by now, Karen Pollitz, senior fellow at the Kaiser Family Foundation, said at an October news briefing. Pollitz urged consumers who will have to switch plans to go to the marketplace to check and compare other plans as soon as Obamacare open enrollment starts. If you don’t enroll by Dec.15 (or by your state marketplace’s deadline, if different), you will be automatically signed up for a similar plan.

“It is best act to early. Do not wait until the last minute,” Pollitz said.

Get help from a health care navigator

The Trump administration has cut federal funding for advertising to get people sign up for Obamacare during this fall’s open enrollment season by 90 percent, and slashed 41 percent of grants for navigator groups — those individuals who help consumers enroll.

The slashed budgets have led states to cut back on hiring health care navigators, which could lead to more confusion, experts say.

Some states like Ohio have shut down their navigator program completely.

Use this tool from HealthCare.gov to see if your state has navigators on staff to help you enroll. If not, you can:

  1. Contact the site’s Marketplace Call Center if you have questions. The center runs 24/7, but there may be a long wait.
  2. Reach out to trained and registered agents or brokers using the Find Local Help tool. A note from HealthCare.gov: Services are generally free to you — they’re paid by insurance companies whose plans they sell. (Some agents and brokers may sell only certain plans.)
  3. Use this calculator from the Kaiser Family Foundation to get an estimate of your plan premiums, and check how much financial help you might qualify for based on your age, where you live and the prices in your area. The calculator will soon be updated for 2018 coverage.
  4. Learn what you need to know from free, reliable resources. The Kaiser Family Foundation will hold web briefings for consumers in different states the week before enrollment starts. Check out the dates here.

Experts are concerned that the pullback on advertising grants, especially on TV promotions to get people signed up, will cause a drop in enrollment. This happened at the end of open enrollment this past January when marketing ads were canceled by the new administration, according to Pollitz.

“Consumers need to hear this information over and over and over again,” Pollitz said.

New Obamacare rules to watch out for

While the enrollment procedure remains largely unchanged this year, there are a few new rules experts say are worth your attention:

People who missed payments last year may not receive coverage for 2018.

The U.S. Centers for Medicare and Medicaid Services ruled back in the summer that during the 2018 coverage year, insurers are allowed to deny enrollment for customers who missed payments in 2017. This change will affect those who signed up for health care after the new rule took effect on June 17 and then missed a payment.

Insurers have an option to not to adopt the policy, and states can also prohibit the practice. Pollitz said If you missed payment in that window, you can repay your premium debt to the insurer before the end of the coming open enrollment, or you can sign up for a coverage under a different company.

But if you need to make a dispute, Health and Human Services hasn’t established an appeal process for this insurance change. Pollitz said it’s important for those encouraging this barrier to contact their state’s insurance regulator and the marketplace, and to seek assistance from navigators.

People who haven’t filed a 2016 tax return with Form 8962 may be denied tax credits

Consumers who got premium tax credits in 2016 but have not yet filed a 2016 federal income tax return with Form 8962 (the form allows filers to calculate their tax credits and reconcile their credit amount this year) will be denied premium tax credits next year. However, those affected by the new rule won’t be given the specific reason why they will not be eligible for tax credits, Pollitz said. She advised that if you are denied tax credits, you have to figure out that this is the reason and then file an amended return with Form 8962 to receive premium subsidies in 2018.

Medicaid expansion

Consumers in 31 states and Washington D.C., with income at or below 138 percent of the federal poverty level — that 138 percent means a little over $16,600 every year for a single person and nearly $34,000 for a family of four — are now eligible for Medicaid, which is open for enrollment throughout the year. You can apply through the marketplace to find out whether you are eligible for tax credits or Medicaid.

What’s unchanged from last year

Individual mandate remains

You still have to a penalty if you can afford health insurance but don’t buy it.

The penalty for not having coverage is the same as it is this year. The fee is calculated as a percentage of your household income or as a fixed amount per person. You’ll pay whichever is higher.

For 2018 …

  • 2.5% of household income (capped at the yearly premium for the national average price of a Bronze plan sold through the marketplace)

OR

  • $695 per adult
  • $347.50 per child under 18
  • Capped at a maximum of $2,085

Auto-renewal remains but is not recommended

If you don’t enroll in new coverage by Dec. 15, your plan will be auto-renewed. About one in every four consumers’ plans were renewed in this fashion in 2017, according to the Kaiser Family Foundation. And if your plan has changed, you will be automatically assigned a plan. But experts strongly recommend you not rely on auto-renewal this year because algorithms may not get you the best plan for 2018 with all the subsidies changes. What you should do is to log into your account, carefully review all the plan choices and costs and select a plan for 2018.

Premium increases and uncertainty

Unable to successfully repeal and replace the Affordable Care Act (ACA), the Trump administration has begun peeling back some elements of the legislation in recent weeks. In mid-October, President Trump announced he would yank key federal subsidies offered to insurers that were used to offer copay and deductible discounts to low-income consumers. Soon after Trump moved to pull the insurance subsidies, two senators struck a bipartisan deal to fund the subsidies through 2019. Experts say if the deal is passed, that could stabilize the marketplace.

But experts say this back-and-forth on insurance subsidies likely won’t change anything for those shopping for coverage for 2018, as insurers are still required to offer cost-sharing help under ACA, and most of them had anticipated the loss of subsidies and had already increased premiums for 2018.

Most people still get tax subsidies that can help reduce their premiums — every eight in 10 people who enrolled in an Obamacare plan received premium tax credits that lowered their monthly insurance bills in 2017. Premium subsidy dollars increase as premiums go up. However, those who earn too much to qualify for tax credits will likely feel the effects of higher premiums.

More difficulty down the road

While it’s unclear how exactly individual accessibility to health care services will be affected in light of the changes to ACA, it will be disruptive when consumers have to switch plans with different providers and apply to new doctors due to the exit of their previous insurers from the marketplace, said Jennifer Tolbert, director of state health reform at the Kaiser Family Foundation.

“We do know that simply having an insurance card doesn’t guarantee people access to people and doesn’t mean that they will be able to get the care that they need,” Tolbert said. “But it certainly helps.”

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Trump’s Congressional Speech Debrief: 5 Changes He Has in Store for Obamacare

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Trump’s Congressional Speech Debrief: 5 Changes He Has in Store for Obamacare

In his first speech to Congress Tuesday night, President Donald Trump outlined the overhaul he and his administration plan to make to the Affordable Care Act, known as Obamacare.

The proposed new health care plan now heads to the Congressional Budget Office and could face more changes as Democrats and Republicans battle over it in the House and Senate.

Trump urged Congress “to save Americans from this imploding Obamacare disaster.”

The president promised to repeal and replace Obamacare. Here are five key ways he plans to dismantle the current health care system.

You could be in a high-risk pool if you have a pre-existing condition

“First, we should ensure that Americans with pre-existing conditions have access to coverage, and that we have a stable transition for Americans currently enrolled in the health care exchanges,” Trump said in his speech Tuesday night.

A draft of revisions to the Affordable Care Act leaked to Politico on Feb. 24 references high-risk pools, although Trump did not discuss them in his speech.

States would have the ability to create high-risk pools for people with pre-existing conditions who are searching for health care. According to the draft, states would receive $100 billion over nine years in “innovation grants” that would be used to fund high-risk participants, news outlets such as CNN reported.

“High-risk pools would need a lot of taxpayer funding to work properly, experts say,” the Commonwealth Fund, a private nonpartisan foundation that supports independent research on health and social issues, tweeted after Trump’s speech.

You could receive a tax credit — even if you don’t deserve one

Tax credits and expanded health savings accounts could help Americans purchase their own coverage. It should be “the plan they want, not the plan forced on them by our government,” Trump told Congress.

Tax credits based on age, with the elderly receiving higher tax credits, would take the place of Obamacare’s income-based subsidies.

“For a person under age 30, the credit would be $2,000. That amount would double for beneficiaries over the age of 60, according to the proposal,” reported Politico prior to the speech.

The credits were also heavily criticized by some GOP members.

“So the headline is that the GOP is reducing subsidies to needy individuals when in fact, the growth of the taxpayer-subsidized reimbursements will actually increase,” Rep. Mark Meadows (R-N.C.) told CNN. “The total dollars that we spend on subsidies will be far greater. So you can be a millionaire and not have employer-based health care and you’re going to get a check from the federal government — I’ve got a problem with that.”

“What are tax credits & savings accounts going to do for those who don’t have money to spend on healthcare in the first place?” tweeted Advancement Project, a national civil rights organization.

Chris Rylands, a partner in the Atlanta office of Bryan Cave LLP, says many people are worried that the tax credits will make it difficult for low-income participants to afford coverage.

Under the current system, many individuals eligible for a subsidy are immune to price hikes in insurance because the government picks up such a large portion of the cost. The proposed Republican system might make them better consumers, says Rylands, whose practice focuses on employee benefits.

“However, given the complexity of health insurance plans and the opacity of the pricing of health care services, it’s not clear whether individuals can really become well-informed consumers,” Rylands says.

You could lose Medicaid

Trump said his changes would give governors the resources and flexibility they need with Medicaid “to make sure no one is left out.”

Under the Trump administration’s revisions, Medicaid would be phased out within the next few years. Instead, states would receive a specific dollar amount per citizen covered by the program. States would also receive the ability to choose whether or not to cover mental health and substance abuse treatment.

“Medicaid is the nation’s largest health insurer, providing coverage to nearly 73 million Americans,” tweeted the Commonwealth Fund after Trump’s speech. In a follow-up tweet, it said capping spending for Medicaid will reduce coverage rates and increase consumer costs and the federal deficit.

However, the Center for Health and Economy, a nonpartisan research organization, reported in 2016 that block-granting Medicaid in the states will lead to additional savings. H&E projects that the decrease in the use of Medicaid funds, by block-granting Medicaid in the states and the repeal of the Medicaid expansion, would be an estimated $488 billion from 2017 to 2026.

Rylands points out that this will not be a popular provision in Congress.

“What I heard here — although [Trump] didn’t say so in so many words — is that they want to try to turn Medicaid into a block grant program, similar to what was done with welfare reform in the 90s,” Rylands says. “However, I suspect many governors from both parties will not like this because it could mean states will pick up more of the tab for Medicaid.”

You could pay less for drugs

Trump proposes legal reforms to protect patients and doctors from unnecessary costs that make insurance more expensive and bring down the “artificially high price of drugs.”

Alongside medical device manufacturers and insurers, the pharmaceutical manufacturing industry is obligated by the Affordable Care Act to pay a yearly fee. It was determined the industry would pay $4 billion in 2017, $4.1 billion in 2018, and $2.8 billion each year after. However, proposed revisions to the Affordable Care Act include repealing the tax.

Some consumer advocacy groups are hopeful that repealing the taxes will reduce drug prices.

“From life-saving cancer drugs to EpiPens, high Rx prices push critical care out of reach for those who need it,” tweeted AARP Advocates, a nonprofit advocacy group for senior citizens.

You could purchase cheaper health insurance across state lines

“Finally, the time has come to give Americans the freedom to purchase health insurance across state lines — creating a truly competitive national marketplace that will bring costs way down and provide far better care,” Trump told Congress.

Under the current law, many states have the choice whether or not to allow insurers to sells plans between states. However, even when allowed, there isn’t much incentive for health care providers to do so.

Difficulty building a network and attracting enough customers to create a large enough risk pool makes this option unappealing to insurers, the Center for Health and Economy reported.

Whether this proposed change will result in a healthy competition in the industry or in a race to the cheapest offer remains to be seen, says Rylands.

“This has the potential to undermine traditional state regulation of insurance … since it would allow insurance companies to sell into a state without having to comply with that state’s particular insurance laws,” Rylands says.

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5 Ways Your Obamacare Coverage Could Change This Year

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5 Ways Your Obamacare Coverage Could Change This Year

Humana’s announcement last week that it is dropping out of the Affordable Care Act (also known as Obamacare) exchange and President Donald Trump’s tweet Friday that the Obamacare repeal is “moving fast” capped a frenzied week for the embattled law.

The proposed rule the Trump administration issued last week could mean major changes and increased costs for those who have Obamacare as well as other coverage. Congress would have to act to change Obamacare.

Amid the uncertainty about what will happen to Obamacare, here are five potential ways you and your health care spending could be impacted if the changes succeed.

The main changes would include:

  • Giving insurers the ability to offer more products that also cost more.
  • Removing the federal government’s oversight of insurers’ hospital and doctor networks.
  • Cutting in half the open enrollment period.
  • Requiring paperwork in advance that proves eligibility for enrolling outside of the open period.

1. You might need to find a new health plan

Humana last week announced it will drop out of the exchange, saying it would no longer provide individual plans in 2018.

“That’s been a pretty consistent phenomenon for the last two years, where you might have a particular insurance provider and then they pull out of the exchange, and so now you’ve got to go find another one,” says Chris Rylands, a partner in the Atlanta, Ga., office of Bryan Cave LLP, an international law firm. His practice focuses on employee benefits.

Humana analyzed the customers who had signed up through the exchange and found too much risk

2. Your costs for women’s health benefits could rise

With the Trump administration’s vow to overhaul Obamacare, some American women are feeling insecure about their birth control options.

In one example, Cecile Richards, president of Planned Parenthood, told CNN’s Christiane Amanpour in January that Planned Parenthood’s patient requests for IUDs has jumped by 900%.

Sneha Bhakta, 22, is among the women who plan to look into requesting an IUD.

She and her parents pay about $500 each month for the three of them to have insurance through Obamacare.

“I follow the news extremely closely. Yes, my parents are concerned about the changing policies. Mostly because it’s all up in the air,” Bhakta says.

Bhakta, who lives in Atlanta, Ga., attended the Atlanta March for Social Justice and Woman in January, which was among hundreds of events the same weekend as the Women’s March on Washington. She says she’s scared about the possibility of losing coverage, especially the reproductive health care benefits, such as free birth control and pap exams.

3. Your deductible could go up

Proposed changes to the Affordable Care Act will create more leniency in how plans are classified. The greater leniency will allow for more diverse choices in the health care market, but could increase co-payments and deductibles for consumers.

All participating insurance plans have to cover 60% of out-of-pocket costs to qualify as a bronze-level plan, 70% for a silver plan, and 80% for gold. While the insurance plan pays for 70% of out-of-pocket costs for a silver plan, consumers would pay the remaining 30% through a combination of deductibles, co-pays, and co-insurance. Under the Obama administration, a two-point disparity was permitted, meaning that a plan could cover 68% of the costs and still qualify as a silver plan.

With Trump’s proposed changes to the Affordable Care Act, the disparity has been increased from 2% to 4%. Plans with only 66% coverage would still qualify as a silver plan.

It gives insurers a little more room to vary their plan terms,” Rylands says.

He adds that although there’s the potential for higher deductibles or out-of-pocket costs, the fact that the proposal extends it by only 2 percentage points means those increases will not be significant.

Already, Americans are showing they’re willing to pay for a plan with high deductibles in order to save money on premiums.

Over the last two years, enrollment in high-deductible health plans with a savings option by workers with employee-sponsored health insurance has increased 8 percentage points, to 29%, according to the 2016 Employee Health Benefits Survey by Kaiser Family Foundation and the Health Research and Educational Trust.

The survey found average premiums for those plans were “considerably lower” than the average for all plan types, at $5,762 for single coverage and $16,737 for family coverage.

4. You may have to be a bit more on the ball to enroll

The Trump administration’s proposal would cut the open enrollment period, typically three months, in half.

Under the new guidelines, those who need to enroll in health care for 2018 would have from between Nov. 1 and Dec. 15, 2017. Insurance coverage will end on Dec. 31, 2017, for all participants, no matter their enrollment date.

Not only would the open enrollment period be shorter, but the president has already slashed the advertising budget for Obamacare. Upon taking office, Trump cut $5 million in advertising days before the Jan. 31, 2017, enrollment deadline.

Enroll America, a nonprofit, nonpartisan organization that serves as the nation’s leading health care enrollment coalition, criticized the decision and its timing during the critical final days of the enrollment period for 2017. In a January statement, Anne Filipic, president of Enroll America, said, “their decision to halt outreach will have real impact on real people’s lives.”

Also last week, the Trump administration announced plans to place more stringent guidelines for the special enrollment period, in an effort to reduce the number of consumers registering outside the open enrollment period. For 2017, the enrollment period ran from Nov. 1, 2016, to Jan. 31, 2017.

The special enrollment period was originally meant for people who experience unexpected changes, such as unemployment, a new baby, or moving states. The Affordable Care Act allows consumers to enroll and submit proof later that they qualify for the special enrollment.

Insurance agencies have found that people signing up under the special enrollment period have higher health care costs, leading agencies to believe that Americans are signing up when already sick.

Under the proposed revisions, consumers will be required to provide proof before signing up for special enrollment.

Your providers could change

Proposed changes to the Affordable Care Act will also remove federal review of insurance networks. The networks were created by the Obama administration in response to complaints that there were too few providers accepting insurance policies purchased in the exchange.

The requirement for a minimum number of providers within a set distance from enrollees could be removed.

While this could reduce consumers’ access to health care within a reasonable distance, Rylands is hopeful it could allow more health insurance companies to continue providing services on the exchange.

“We’ll just have to wait and see if that happens though,” Rylands says.

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Health Care Sharing Ministries Surge in Popularity, MagnifyMoney Analysis Shows

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melanie
Melanie and Matthew Moore of Wake Forest, N.C., turned to Samaritan Ministries, one of the largest health care sharing ministries in the U.S. when they needed health coverage.

In 2013, Melanie and Matthew Moore were facing a bit of a health care cost crisis. After the birth of their first child, the Wake Forest, N.C., couple decided that it made sense for Melanie, 33, to leave her job and become the primary caregiver at home. Not only did that mean losing an additional income source, but it also meant giving up the family’s affordable health benefits.

The monthly premium for a family plan through Matthew’s employer far exceeded the reach of their newly reduced budget. Melanie began researching health insurance options online, and eventually landed on the home page for Samaritan Ministries. East-Peoria, Ill.-based Samaritan is one of the six major faith-based health care sharing ministries in the U.S.. Members of these ministries pay monthly contributions to a pool of funding that is dispersed among members as they show need.

Samaritan’s plan for Melanie and her son cost just $300 per month — less than half what they would have paid for a family health plan through Matthew’s job. Melanie quickly signed them up. To keep costs as low as possible, they decided Matthew, 31, would continue to receive individual coverage through his employer, which was free.

Even more than the price tag, Melanie says she appreciated the ministry’s faith-based approach to health care. “Health sharing promotes the Biblical ideals of sharing,” she told MagnifyMoney. “It takes a whole different mindset than insurance.”

As health care expenses have ballooned over the last decade, health care sharing ministries have gained in popularity as a lower cost alternative to traditional insurance. Their numbers still pale in comparison to people who receive insurance through employers or the federal marketplace. But health care sharing ministries have experienced an explosion in interest in recent years.

Membership among the top four health care sharing ministries nearly tripled in just the last two years — from a reported 274,000 members in 2014 to more than 803,000 Americans in 2016, according to a MagnifyMoney analysis of membership rates at the top six ministries.

Even the smallest ministry in the bunch, Altrua, saw an eight-fold surge in membership in the last year alone — from 1,000 in early 2016 to 8,000 as of November 2016.

But what exactly are health care sharing ministries, and can they really replace primary health insurance?

At a glance, health care sharing seems like a perfect solution to families facing rising premium costs. However, a deeper look shows that participants take a leap of faith when they eschew traditional insurance protections in favor of health care sharing ministries. MagnifyMoney took a deeper look at how they work.

How Health Care Sharing Ministries Work

Ministry members pay a monthly share to the health care sharing ministry. Monthly share costs can be as low as $21 for an individual, but they can be as much as $780 per month for a family. Share costs vary from ministry to ministry and can also change unexpectedly, much like traditional insurance premiums.

In terms of actual functions, most health care sharing ministries collect monthly shares online, and they disburse funds electronically or through checks. Not all the share money goes directly to helping people in need. Some of the money goes to cover administrative costs, and some money may go into an escrow account. The escrow accounts allow ministry participants to share costs even during periods of high expenses.

Submitting claims

When members incur medical expenses, they submit their bills to the ministry for approval. Approvals are based on the ministry’s published guidelines. Some health care sharing ministries allow medical providers to send bills directly to the ministry. The board then approves or denies sharing. When cost sharing is approved, the member is paid in one of two primary ways: Either the ministry disburses funds to those in need directly, or the ministry directs other members to send their monthly premium payments to the member in need instead.

Health care sharing ministries encourage members to pray for sick members and to send encouraging letters or emails to those in need. Health care sharing ministries specifically publish medical needs to members of the community for the purpose of prayer and encouragement.

“You almost can’t compare sharing to health insurance,” says Dale Bellis, executive director of Liberty HealthShare. “Sharing is about giving not receiving. Your goal is to be available for others in need. Participating is motivated by faith in God and faith in one another.”

The “individual responsibility”

Before sharing a cost, some health care sharing ministries require that members meet an “individual responsibility requirement.” Basically, this is their form of a deductible. The individual responsibility can cost from $35 per incident all the way to $5,000 per incident. For example, Samaritan Ministries requires members to share up to $300 per incident. Medi-Share requires members to pay a non-reimbursable fee of $35 per medical visit or $135 for an emergency room visit (much like a co-pay).

Negotiating bills

One of the benefits of participating in a health care sharing ministry is that many ministries emphasize the importance of negotiating medical expenses. It’s in the ministry’s interest to encourage members to negotiate fees, which leaves all the more money in the pool for everyone else. Some ministries hire third-party firms to negotiate bills, but it’s up to members to take advantage of those services.

Altrua Healthshare directly negotiates on behalf of its members, according toRon Bruno, VP of Business Development.

To incentivize members to negotiate their bills, some ministries offer to waive the member’s individual responsibility portion.

For example, Melanie negotiated a discount at the birth center when she had her second child in 2016. The discount she received more than covered her individual sharing responsibility of $300. That meant 100% of her expenses were shared by Samaritan members.

Finding a doctor

For the most part, ministry members are free to choose primary care doctors of their choice. This is because health care sharing ministries don’t usually share the cost of preventive care. The exception, Altrua HealthShare, has a network of affiliate providers including primary care physicians.

The trouble with choosing “any” doctor is finding a primary care physician who will accept patients who pay in cash. Samaritan Ministries directs their members to use a “cash and direct pay” resource from the Association of American Physicians and Surgeons.

Outside of primary care physicians, each health care sharing ministry allows members to request sharing pre-approval for planned surgeries and other expensive procedures. Most ministries have established processes or arrangements that help their members find the most cost-effective surgeons and specialists in their area.

For example, Liberty HealthShare maintains a list of providers who negotiated bills and accepted payments from Liberty in the recent past. Medi-Share has members search databases for preferred medical providers.

Even with these resources, members are free to find their own doctors, and they will still be eligible for sharing (as long as they follow the standard procedures set forth by the ministry).

When it comes to emergency care, ministry members use the best available option and submit their bills for sharing afterward. The health care sharing ministries will seek to honor requests to share even expensive emergency care (provided the emergency care meets their standards).

Health Care Sharing Ministries vs. Insurance Companies

It’s crucial to understand that health care sharing ministries are not insurance companies. They operate more like nonprofit organizations. And because they are not technically insurance companies, they have no contractual obligation to share certain medical expenses. That means they can mostly write their own rulebook for what they expenses will share and what they won’t.

Each health care sharing ministry has full discretion over which treatments it will share, and ministries will not share expensese for many treatments or conditions that do not align with their religious ideals. For example, many ministries won’t cover treatment for drug or alcohol addictions. Medi-Share, for example, will typically not share expenses for prenatal care for an unmarried woman or health care for children born to unwed mothers. These are costs that traditional insurers would cover without hesitation.

There are also limits to how much health care sharing ministries are willing to share. The majority of ministries have a maximum sharing amount of $125,000-$1 million per incident. In contrast, government-approved health insurance plans do not have annual or lifetime maximums for insurance coverage. That’s not to say that these ministries can’t absorb large costs. Samaritan Ministries participants share $18 million per month in medical costs. Currently, Liberty HealthShare has a sharing capacity of $6 million per month among 30,000 households. Medi-Share and Christian Healthcare Ministries have shared more than $1 billion each.

Who can benefit the most from health care sharing ministries

At their heart, health care sharing ministries are meant to help members who are facing unusually high or unexpected health care costs. To that end, most ministries do not share the kinds of routine preventative care — like annual physicals and immunizations — that private insurers are required to cover. Commonly “shared” expenses among ministry members are things like sudden illness or surgeries, says Michael Gardner, a spokesperson for Medi-Share.

In a way, health care sharing ministries have replaced catastrophic health plans that were phased out under the Affordable Care Act. People who may not require regular doctor’s visits but who want a health plan for emergency health care needs might benefit from a health care sharing ministry.

melanie
Melanie Moore, 33, decided to remove her infant daughter from her Samaritan health care ministry plan because the plan did not share her newborn well visit expenses. She continues to use the ministry for her own health benefits.

Because these ministries don’t share expenses for routine health costs, health care sharing ministries make sense for people with low routine health care costs. In general, this includes many healthy people who don’t struggle with chronic conditions.

One surprising group that needs to look out for high routine costs are new parents.

In early 2016, Matthew and Melanie Moore gave birth to their second child. After the birth, the Moores chose to enroll the children on Matthew’s insurance plan instead of keeping them on the Samaritan plan, which wouldn’t share any of their newborn well visit expenses.

Infants visit the doctor 9-10 times in their first 18 months, and they receive dozens of immunizations during that time. For the Moores, the out-of-pocket costs for preventive care would have overwhelmed their budget again.

Health Care Sharing Ministries in the Obamacare Era

Under the guidelines of the Affordable Care Act, health care sharing ministries would never pass muster. But five of the six large health care sharing ministries were granted exemptions under the ACA — meaning their members will not have to pay tax penalties for not having qualified health coverage.

Please note: Members of Medical Cost Sharing (MCS), another ministry, will not receive qualified exemptions from Affordable Care Act penalties. Their website uses language that may lead you to believe otherwise.

Faith (Almost Always) Required

Health care sharing ministries have been around since the 1980s, led by Christian Healthcare Ministries. Like Melanie and her family, most health care sharing ministry participants are drawn to the organizations’ emphasis on faith.

The organizations model their sharing plan after resource sharing ideals practiced by the early Christian church nearly 2,000 years ago.

All the health care sharing ministries require that their members affirm some set of beliefs. Most specifically, they require participants to adhere to the Christian faith. Liberty HealthShare is an exception, according to Bellis. “We are unabashedly a Christian organization, but we don’t intrude on the faith choices of participants,” he says.

Bruno, of Altrua Healthshare, explained that members of Altrua adhere to a statement of standards instead of a statement of beliefs. The standards are based on the Bible, but the ministry is non-denominational.

One reason Melanie Moore loves health care sharing ministries is the sense of community and encouragement she receives from other members. She received notes of congratulations and prayers for recovery when she received checks to pay for her child’s delivery. Likewise, she sends notes of encouragement along with her monthly share check.

All the health care sharing ministries encourage participants to pray and give words of encouragement to sick participants. The ministries exist to foster community and to promote sharing. Anyone looking for an impersonal experience will need to look elsewhere.

Each of the ministries is faithful to its heritage. These ministries are faith-centered, and they want to promote religious faith among their members. It is clear that these ministries want members to share more than medical bills. They want to promote a community of care among their members.

The Bottom Line

Walking the line between faith and finances hasn’t been easy for the Moore family. Melanie is still a member of Samaritan, but the rest of the family is on Matthew’s traditional insurance plan.

Like the Moores, anyone considering a health care sharing ministry should think about their mindset, their faith, and their finances. Don’t join a ministry because of the low monthly costs; the organizations want members who live out the belief statements. Be sure that the rewards of joining a ministry (both financial and otherwise) outweigh the associated risks.

*This post has been updated to reflect the following correction: Due to a reporting error, the name of the ministry used by the Moore family was incorrectly noted. It is Samaritan Ministries, not Medi-Share.

Hannah Rounds
Hannah Rounds |

Hannah Rounds is a writer at MagnifyMoney. You can email Hannah at hannah@magnifymoney.com

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10 Myths About Obamacare and the Affordable Care Act

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confused thinking woman with question mark

Like many politically divisive issues today, when it comes to the Affordable Care Act and Obamacare, it can be hard to separate fact from fiction.

The cornerstone of the ACA (aka Obamacare) is Healthcare.gov, home of the new health care marketplace. Nov. 1 marks the beginning of open enrollment for 2017. Americans have until Jan. 31 to choose a plan. We developed an in-depth guide to shopping on the marketplace, which you can find here. We also figured there could be no better time to revisit some of the misconceptions about the health care law that created it.

Below, we list 10 common myths associated with Obamacare.

1. I have to sign up for health insurance in the federal marketplace

The marketplace exists for people who do not receive health benefits through their employer, or a public program like Medicare, Medicaid, or the Children’s Health Insurance Program.

The ACA does require all Americans to have a qualified health plan, but that hasn’t stopped millions of Americans from going without. Just know that if you do not enroll in a health plan, you may face a tax penalty. There are exemptions for some groups of people. Some consumers choose to forego insurance for financial reasons — sometimes it costs more to pay for a health plan than to incur the tax penalty for not having insurance.

Before you give up on finding an affordable plan, check to see if you are eligible for a tax subsidy, which can drastically reduce the cost of your Obamacare premium.

2. Obamacare hasn’t changed the health care landscape all that much

The percentage of uninsured Americans fell to 10.5% from 16.6% since the implementation of the Affordable Care Act back in 2013. The U.S. is currently experiencing its highest rate of insured people ever in history, according to a report released by the Centers for Disease Control and Prevention in September. As of February 2016, 12.7 million Americans received health coverage through the marketplace.

There are five other big advantages of Obamacare:

  • Obamacare made it mandatory for insurers to cover certain preventive services such as cancer screenings and immunizations. Those services cannot count toward a patient’s deductible or require a co-pay.
  • The law also allows young adults to stay on a parent’s health insurance plan until they turn 26 years old — even if they get married, go to college, move away from home, or aren’t claimed on their parent’s taxes as a dependent anymore.
  • No lifetime caps on how much the insurance company will pay if you get sick.
  • Insurers can’t cancel your coverage midterm if you made a mistake on the paperwork.
  • The company can’t deny anyone because of pre-existing conditions like asthma or diabetes.

3. If I lose my insurance, I will have to pay a fee

It is true that some people will face tax penalties if they do not sign up for a qualifying health plan in a given year. But there are exceptions to this rule.

If you lose your job, you can purchase a plan in the marketplace outside of the open enrollment period. This applies even if you quit or get fired. If you can’t afford insurance and will be uninsured for a bit, you may qualify for a short-gap exemption and avoid the tax penalty. To qualify, you can be uninsured for no longer than two consecutive months. If you don’t qualify for any exemptions, you are then subject to a tax penalty for each month that you are uninsured.

4. I’ll have to wait longer to see my doctor if I have Obamacare

When the health care exchange opened, people worried that Obamacare patients would encounter the same service delays common among Medicaid and Medicare recipients. But evidence points to the contrary. The Commonwealth Fund, a private foundation that supports independent research on health care issues, found in its 2016 ACA Tracking Survey that wait times for those with Medicaid or marketplace coverage were similar to wait times for other insured adults. The survey found that 58% of adults with Medicaid or marketplace coverage who looked for a new primary care physician found it easy or somewhat easy to find one, and more than half of those surveyed waited less than two weeks to see a primary care physician. About 41% of those surveyed needed to see a specialist. Out of those, 60% got an appointment within two weeks.

5. If I sign up for Obamacare, I have to agree to a home inspection

This myth arose after a widely circulated August 2013 blog post claimed that the health care law would allow forced home inspections. There are no forced home inspections, or home inspections at all.

That blogger misinterpreted the Maternal, Infant, and Early Childhood Home Visiting Program (MIECHV), which was created with the ACA.

The program allows “at-risk” pregnant women or families to enroll in an optional home health care program that sends nurses to their homes. It gives moms who wouldn’t normally have access to prenatal advice access to advice and care in the comfort of their homes.

6. My boss might decrease my hours to avoid paying for Obamacare coverage

The ACA provision that requires employers with 50 or more full-time equivalent employees to offer health benefits went into full effect in 2016. There was worry that employers would decrease employee hours to reduce the number of full-time employees and avoid having to pay full health benefits (under the provision, employees are considered full time if they work 30 hours per week or more).

According to a report from the Kaiser Family Foundation earlier this year, only 2% of employers said they were going to change job classifications from full-time to part-time so that employees would not be eligible for health benefits, while 7% said they had changed or planned to switch part-timers to full-time so that they could qualify. The report also said 12% of employers were extending or planned to extend eligibility for health benefits to workers who were not currently eligible.

7. Only very poor people qualify for tax credits

Under the ACA, the majority of those who get health care through the marketplace are eligible for tax credits that can make the plans more affordable. About 8 in 10 people are eligible for $290 average monthly subsidies that can bring monthly payments down to less than $100. Some small businesses that offer health benefits to employees could be eligible for a credit as well to help with affordability.

It is true, however, that eligibility for the tax credit is determined by a host of factors, primarily household size and income. The IRS has a flow chart you can use to quickly see if you’d be eligible for the tax credit.

Premiums overall are getting more expensive, however, even for those with employer-sponsored health coverage. The rise is fueled by the rising cost of services, medicine, and other medical treatments. However, as premiums rise, subsidies rise, too, which can help offset the increase in cost.

8. I won’t be able to choose my own doctor anymore

Simply enrolling in a health plan through the exchange won’t mess with your choice of doctors. Your provider determines which doctors are accessible through your insurance plan. When policy conditions change — as they are apt to do when employers switch plans, people change or lose jobs, or when insurers alter plans — you’re not guaranteed that your doctor will still be in-network. Even when that happens, you may still be covered, but may have to pay more to go to a doctor outside of your network. If you’re concerned about this, ask your doctor which insurers they accept, and see if you can sign up for one of those plans through your employer or the marketplace.

9. If I like my plan, I can keep it no matter what

You can keep your plan as long as it complies with the ACA or was grandfathered in. However, nothing in the ACA promises that you can keep your plan no matter what. Your employer could switch plans, or you could lose or switch your job and lose your current plan, as it’s always been.

When the ACA went into effect, some insurance plans didn’t meet the minimum requirements of a Qualified Health Plan. Those plans were eventually phased out and replaced with ACA-compliant plans.

10. Most people were better off without Obamacare

The Affordable Care Act added important consumer protections that cannot be ignored. Before the act, insurers were able to deny coverage to people because they had a pre-existing condition. Now they can’t. Certain preventative care such as obesity, depression, domestic violence screening, and birth control, among many others now must be covered by insurance without a co-pay. Overall, more people are insured, and more services are being provided.

In its 2016 report, the Commonwealth Fund asked 4,802 working-age adults with Medicaid or marketplace coverage about the ACA. Of those, 881 were new to marketplace or Medicaid coverage. Only 11% of those new to the marketplace and 4% of those new to Medicaid said their ability to get care had worsened.

It is true that Obamacare patients are seeing higher premiums year after year, but they are not alone. Premiums are also becoming more expensive for people who receive employee benefits. According to a report released this year by the Kaiser Family Foundation, the average health care premium for an employer-provided family plan has jumped 58% over the past 10 years, while employee contribution toward the total premium has also risen 78%.

Some states will be especially hard hit by price hikes in 2017. The largest decrease in available plans was in Arizona, which lost six insurers. The state’s enrollees will see an average 116% price increase in 2017.

 

Brittney Laryea
Brittney Laryea |

Brittney Laryea is a writer at MagnifyMoney. You can email Brittney at brittney@magnifymoney.com

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Here’s How Much More Your Obamacare Plan Will Cost in 2017

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

obamacare Affordable Care Act paper family

As widely expected, millions of Americans who rely on Obamacare for health insurance will face higher premium costs going into 2017. Premiums will rise 25% on average, according to a new report released by the U.S. Dept. of Health and Human Services (HHS). That’s one of the largest year over year spikes premiums have seen since the marketplace opened in 2013.

A 27-year-old woman who paid $242 for a benchmark silver plan in 2016 will now face a premium of $302 before tax credits. The silver lining here is those three words: before tax credits. Roughly 85% of Obamacare customers currently qualify for tax credits that can offset the cost of their premiums. The average subsidy in 2016 was $290/month. Tax credits can help offset rising premium costs, but they depend largely on household size and income. Beginning in November, consumers can calculate their tax credit for 2017 here.

How much premiums will rise depends largely on the state where consumers are shopping. In states where major insurers have exited the federal marketplace, premiums will see much higher gains. Further contributing to rising premiums, insurers are now raising prices in order to recoup losses they’ve incurred since entering the Marketplace in 2013. For example, BlueCross BlueShield reversed its decision to exit the marketplace in parts of Arizona in September. But as a condition of its decision to stay in the marketplace, the company said it would raise premiums by more than 50%. The company will have very little competition this year. Arizona lost a total of six major insurers this year, bringing the total number of insurers offering plans on the marketplace from eight to only two.

Arizona customers will feel those price hikes now. A 27-year-old in Arizona will pay a whopping 116% more for a benchmark silver plan in 2017, according to HHS.

Minnesota consumers relying on Blue Cross Blue Shield for coverage were also unlucky this year. Citing losses of $500 million over its three year run on the state’s exchange, BCBS decided in June to pull all but one plan from Minnesota’s state-run healthcare marketplace, leaving more than 100,000 Minnesotans without plans. The benchmark silver plan will rise an average of 59% for a 27-year-old in Minnesota going into 2017.

The silver lining

The government report focused largely on positive news for Obamacare consumers going into 2017.

Three-quarters of Marketplace customers in states using the federal health care exchange (Healthcare.gov) will be able to find plans with a monthly premium under $100 after factoring in tax credits. On average, these consumers will have 30 different insurance plans to choose from.

But the number of individual insurers offering plans in states has decreased in many states. Pennsylvania and Ohio each lost five insurers. Arizona lost six, the largest loss of any state. In several states, including Alaska, Arkansas, Wyoming, and South Carolina, only one major insurer offers plans on the marketplace. When there are fewer insurers operating in a given state, there is less competition and, as a result, potentially higher rates for consumers.

The Bottom Line:

This all means one thing for Obamacare consumers facing open enrollment Nov. 1: It is more important than ever to shop around and compare plans. If customers don’t shop around, they will simply be re-enrolled in their 2016 coverage. And if their 2016 plan is no longer available, the marketplace will stick them in a similar plan that could cost much more.

“In 2017, more than 7 in 10 (76 percent) current Marketplace enrollees can find a lower premium plan in the same level by returning to the Marketplace to shop for coverage rather than re-enrolling in their current plan,” according to the report.

MagnifyMoney has several tips for people who found out that their Obamacare plan has been dropped.

The open enrollment period of marketplace health plans is a crucial time to save and select the right coverage for your family’s needs. Open enrollment for Obamacare consumers begins November 1 and ends January 31. You can shop for plans in advance right now by visiting Healthcare.gov or your state insurance marketplace.

Source: HHS
Source: HHS
Mandi Woodruff
Mandi Woodruff |

Mandi Woodruff is a writer at MagnifyMoney. You can email Mandi at mandi@magnifymoney.com

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Stuck With a High Deductible Health Plan? Here’s How to Save

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

child and doctor talking in clinic

The majority of Americans receive health care through an employer-provided health plan, new Census Bureau data shows. But thanks to rising premium costs and ever-increasing deductibles, health coverage — even if your employer covers part of your tab — can easily feel more financially burdensome than beneficial.

Annual premiums rose most significantly for employer-provided family plans in 2016, according to a survey released Wednesday by the Kaiser Family Foundation. The average annual workplace family health premium rose to $18,142 in 2016, a 3% increase. This is a slowdown from last year’s 4% hike, but family premiums are still 58% higher than they were just a decade ago.

But sticker prices on annual health plan premiums — $18,142 for families and $11,480 for individuals — only tell half the story.

Employers commonly make contributions toward their workers’ health care premiums. But employers have contributed less and less to annual premium costs over the last decade, leaving families footing larger portions of their coverage. For example, workers now pay 78% more in annual premium contributions for family coverage than in 2006, according to Kaiser.

Here are other ways rising health costs are impacting consumers:

Out-of-pocket costs continue to soar. In 2016, 29% of all workers were in high-deductible plans, up from 20% in 2014. The average annual deductible for individuals climbed 12% year-over-year to $1,478. Families endured even higher out-of-pocket costs.

Premiums have also outpaced inflation and earnings increases over the past five years, 6% and 11%, respectively, according to Kaiser’s report.

What you can do to save if you have a high-deductible health plan.

Look at more than just the sticker price

Plan premiums can be deceiving. Even if a plan’s premium looks more affordable, it will likely have a higher deductible, meaning your out-of-pocket costs could be much more in the long run. Sophie Stern of Enroll America, a health care advocacy nonprofit, recommends reading plan offerings closely before you sign up.

“First and foremost employees should reach out to their employer to gain a better understanding of their plan options and covered benefits, including how much they will have to pay out of pocket for their health care,” Stern says. “If already enrolled in coverage, employees can also contact their insurance company directly.”

Take advantage of health savings accounts

If your deductible is higher than $1,250 for individuals or $2,500 for families, you likely have access to a health savings account (HSA). HSAs let workers set aside pre-tax dollars for medical expenses. Some employers provide Health Reimbursement Arrangements (HRAs), in which case the employer would reimburse its employees for out-of-pocket medical expenses and individual health insurance premiums.

Sign up for a health risk assessment or biometric screening

Many large firms offer financial incentives like cash, reduced premiums, and other benefits for undergoing a health risk assessment or biometric screening. Kaiser found that most large firms offer health risk assessments (54%) and biometric screenings (53%) for workers. Health risk assessments ask questions about your medical history, health status, and lifestyle, while biometric screenings measure things like body weight, cholesterol, blood pressure, stress, and nutrition.

Some things in health care are free

Under the Affordable Care Act, many preventative care services are free to you. Be certain to make sure they are coded properly at your doctor’s billing office so you are not incorrectly billed.

Pay cash

Some health care providers offer to charge a lower fee for some treatments if patients pay cash upfront. You can also ask for a low- or no-interest installment plan if you can’t afford the full cost upfront.

Plan ahead

One of the nastiest surprises at the doctor’s office can be an unexpected bill because your physician is not covered by the insurer’s network. Verify that a provider accepts your insurance before you go, either by calling or by checking your plan provider’s website. Once you find a provider that accepts your insurance, Stern recommends calling before you visit to get a sense of how much your treatment will cost.

Be proactive. Ask how much services will cost before your appointment. Make sure to ask about cheaper options and the pros and cons of comparable services before you get there and about the price of drugs before leaving with a prescription.

Compare and save

Prices for medical treatments are notoriously opaque. Sites like cms.gov and clearhealthcosts.com have made it easier to shop around for certain routine treatments (such as an MRI or teeth fillings). Some services, like smartshopper.com, will even pay you to shop around for lower cost treatments.

Lower your medication costs

Ask for a generic prescription if you’re getting medication. Generic prescriptions cost anywhere from 80% to 85% less than brand name medications, according to the FDA. You can also browse sites like GoodRX.com and needymeds.org to compare and save when it comes to your prescriptions.

If you aren’t covered by your employer and you’re shopping for health coverage, there are resources that can help. Through Enroll America’s Get Covered Connector, you can schedule an appointment with an expert near you who can walk you through the process.

 

 

Brittney Laryea
Brittney Laryea |

Brittney Laryea is a writer at MagnifyMoney. You can email Brittney at brittney@magnifymoney.com

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