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Are You Ready for Obamacare in 2014?

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ObamacareBack in 2010, Congress passed, and President Obama signed into law, the Patient Protection and Affordability Care Act (PPACA). In spite of the fact that the legislation ended up being passed without a key feature that President Obama wanted — a public option that would have allowed Americans access to the same plan Congresspeople have — the measure is popularly known as Obamacare.

After clearing the Supreme Court last year, mostly intact, Obamacare is getting ready to roll out in full force in 2014. Some of the provisions have been phasing in gradually, but 2014 marks the year that the provision to buy coverage or face a fine goes into effect.

Are you ready for Obamacare? Here are a few things that you need to know before January 1, 2014:

Where Will You Get Health Insurance?

For most people, Obamacare doesn’t change much about where they will get insurance. Insurance will still be connected to work for most people, and you will be able to get insurance on an individual basis and with the help of public programs. It really doesn’t change the way we get insurance at the most basic level; the main difference is that you will be required to have it, and large employers will be required to provide it, or face a fine.

State exchanges are supposed to be up and running in 2014, providing you with a place to look for insurance if your employer doesn’t offer coverage. Plans are required to meet certain standards, and be “reasonably” priced — comparable to what you would get through an employer in most cases.

This isn’t government-run health insurance, although states are in charge of the exchanges (and can decide to run multi-state exchanges, or outsource running the exchanges) and some federal money is used as a start up. States cannot set premiums.

How Much Will You Pay for Health Insurance?

As is the case right now, health insurance costs depend on where you live, and the coverage you receive. Factors that are supposed to influence your health insurance premium under Obamacare include:

  • Age (the older you are, the more you pay)
  • Rating areas (your locale is rated according to health risk, and higher risk areas pay more)
  • Number of people covered (as with a family plan)
  • Tobacco use (higher premium for tobacco users, but this is optional)

Since you will be required to buy health insurance coverage or pay a fine, it’s important to understand how this will work. It is possible to apply for exemption from buying health insurance for a few very specific reasons, but most people will have to weigh the cost of insurance vs. the cost of the fine. For the first couple of years, it might actually be more cost-efficient in some cases to pay the fine. As Obamacare further phases in through 2017, though, the fine goes up.

You can also get help paying for your health insurance premiums. For those who are eligible for Medicaid, nothing changes. You’re still eligible for Medicaid. For those who don’t qualify for Medicaid, and make up to 400% more than poverty level, there are tax credits designed to help offset the cost. The Kaiser Family Foundation estimates that 67% of the population will be eligible for Medicaid or subsidy.

The tax credit can be applied for when you sign up for insurance. The government will determine how much should go toward your premium and pay the insurance company directly. You then just pay the remainder on a monthly premium basis. If you decide not to go this route, and pay your entire premium up front, you can apply for the tax credit at tax time and receive a refundable tax credit.

As 2014 approaches, get ready for the requirements. Read up on the law, and determine whether or not anything will change for you.

Photo: Bart Everson

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32 Responses to “Are You Ready for Obamacare in 2014?”

  1. NateUVM says:

    Live in MA. Already been enjoying my lower premiums/expenses.

  2. dmosinee says:

    I’m fortunate that I’m now covered under a good employer plan, but I had to navigate the waters of the private market for a couple years when I was running my business full-time… and it was an awful confusing mess. If the exchanges work like they’re supposed to, then market competition should at the very least make the plans less confusing and easier to compare, and hopefully drive premiums down a tad (although lowering individual premiums was never a primary goal of the legislation).

    Personally I don’t care much for the Obamacare approach, the core of which (the individual mandate) is rehashed from the Republican opposition plan to the Clinton healthcare effort. I recognize that they had to do SOMETHING to try and get our massive healthcare problems under control, I just think they settled too quickly on a system that mixes some genuine good with some questionable bad.

    I believed (and still do) that it would be much more effective and less confusing to just let Americans buy into our existing Medicare infrastructure at full cost. This would provide stiff competition for the private insurers to either lower their prices or fall by the wayside.

    • 39dodge says:

      If you put everyone on Medicare there will not be any doctors willing to treat patients.

      • Rob says:

        That’s right, we forget why healthcare cost is unsustainable. The greedy ones! The overpriced services and no competition.
        Companies are dismantling our good pay for a good job done and refusing to provide the benefits that made working there and investing in the company worthwhile.

        I want medical care from those that care for more than wallet raping.

        Maybe the medical world needs to feel a little of that too!

  3. Terry Pratt says:

    if insurance costs more than (?) 9 percent of your gross income you are exempt from the individual mandate. the premium for tobacco users will be much higher than for non-users.

    the relevant application question is whether you used tobacco in the past 12 months. many people will be able to dodge having to buy insurance by saying they used tobacco in the past 12 months – their premium would be high enough to exempt them. there is absolutely no way to verify or refute such a claim.

    • Laurie Spezzano says:

      People trying to AVOID being covered are being stupid and greedy. Stupid bcz young healthy people can suddenly become sick or severely injured people, and you will wish you had coverage. Greedy bcz you are relying on the rest of us to pay for your care when something happens, freeloading instead of chipping in. Obamacare gives you until age 26 to grow up and take responsibility for yourself, and then you will only pay a small percentage of your income for good coverage. It’ s a great deal.

      • If you’re young and healthy, your insurance premiums are likely to double or quadruple because you’re now being required to pay more to cover older people and the minimum approved insurance now covers all kinds of things that the average young person has no interest in. “Small percentage”? Not a chance. Not if you’re self-employed.

        That would make me at least consider dropping my insurance if I were young, single, and not self-insured, especially because it’s not stupid anymore since you have to be covered with pre-exisiting conditions now. I’d be fine with “paying my share” when it really was my share–not so fine when I’m shouldering other people’s premiums, too.

        As it is, our insurance is already up $2,500 over three years ago, and our company pays most of it. We’ve dropped down to a less expensive plan because the other was getting outrageous. I am in dread as to what the premiums will be next year.

        Like MOST Americans, Obamacare is making our healthcare costs skyrocket. Only a tiny percentage of people will benefit.

      • 39dodge says:

        I thought this was the land of the free. What is next no milk shakes or red meat as it may be bad for you?

      • Obama says:

        No one has to buy insurance at all. Just pay the fine (you can lie about how much you make and just tell the government when you go to sign up for the exchanges that you qualify for a fat subsidy. The government has no way to check so you get FREE MONEY FROM OBAMA!
        Or if you chose NOT to carry insurance, all you do is pay your nominal fine and then go and sign up for insurance because INSURANCE COMPANIES CAN’T DENY YOU CARE! So why pay for insurance when its not insurance but just a welfare handout from Obama?
        Obama has granted so many wavers to big business, to congress, to all of his business friends that want to remain in business that this whole mess is absurd.
        Throw it out and lets fix the problems without bankrupting the bankrupt United States.

    • Yana says:

      Terry, that’s an interesting idea. What I wonder is whether there is a point beyond further abusing smokers in charging higher insurance rates. Suppose someone who smoked for 30 years decided to quit, just as soon as they heard about Obamacare a long time ago. Or another smoker who took up “vaping”. If neither had smoked tobacco in 12 months, would they pay non-smoking rates? It sounds that way. And it makes no kind of sense, because we all know that many smokers who ever have ill effects from smoking get those effects many years later – and I don’t know the statistics, but I am not sure that quitting undoes whatever harm smoking does over many years. If vaping were considered a-okay, that would be even more nonsensical.

  4. I wonder how we will find the exchanges, especially since my state, Louisiana, isn’t playing…

  5. freeby50 says:

    mylindaelliott, If states choose not to do an exchange of their own then they’ll default to a federally ran exchange.

  6. admiral58 says:

    It will only drive prices up

  7. jestjack says:

    If memory serves for sole proprieter business folks this may be a good thing. As I recall the percentage to be spent on insurance is based on AGI (adjusted gross income). If one’s AGI is low it is my understanding you are entitled to a subsidy. Would appreciatte additional input on this subject as we are all “pioneers” in this…

  8. Karl says:

    Not sure how ill be effected. I pay $350/ month with a 10k deductible for family of 3. I heard high deductible plans go away under obamacare.

    • They’re still CALLED high-deductible plans, but they must cover so much more that the cost is more than doubling. All plans must cover psychiatric care and must pay at least 50% of any visit, for instance.

  9. Yana says:

    Not sure how it will work either, but what I do know is that we don’t want our employer to be paying for health care coverage. We want to keep the job and earn as much as the employer can afford to pay us without either of us being ripped off. We can only buy from the “exchange” if employer-offered coverage is “unaffordable” according to someone else. WE decide what is affordable to us, and we trust that employers can decide what they can afford, as well. So we can’t buy from the exchange just because we might want to. If there’s a way to get out of the mandate without paying the fine, we’ll find it, and if there’s not, we’ll pay the fine/tax. The medical system is corrupt and dangerous, and we haven’t used it since my insurance rose in 2000 and I cancelled it. Unless real health care reform happens, and insurance for medical is outlawed, we don’t ever expect to use the system. Any medical care we would ever want would be minimal, and if the quality we demand could be had, we would prefer to pay for it directly or live in a civilized country with universal health care.

    • Rob says:

      Here, here! Come on Universal Healthcare! But as long as our government officials aren’t affected by healthcare laws they make for us we won’t get it.

      Insurance was supposed to be the big pot off money to draw on by members when they needed it, but it became a pot of money for management and less for members. (premium payers)

  10. freeby50 says:

    Yana, Opting out of insurance for 13 years is pretty much financial recklessness. What happens when you break a leg or your appendix bursts or worse yet get diagnosed with a grave illness like cancer??

    “Any medical care we would ever want would be minimal”
    You don’t get to chose when you are sick or seriously injured or how much care you require.

    Or are you a religious objector or something?

    Jim

    • Yana says:

      We’d have to pay for broken leg or appendicitis treatment; however, my friend’s husband broke several ribs and the medical provider did not even wrap him (“We don’t do that anymore”)! Could not believe how useless the system was in that instance, and the experts/system still got paid megabucks. Doctors have no control over the vast majority of cancer, and anyone getting treatment for that has to live through the abusive treatment to have a chance to overcome the illness.

      How much care “required” is infrequent. More often it is a choice. And people who do not go to doctors don’t get cancer diagnoses – including erroneous ones.

      One of our decisions is that we will never finance health insurance companies. We don’t work to support them.

  11. electricbanana says:

    I do not have health insurance at this point for me and my two children. How long am I going to have to wait until this goes into effect?

  12. Phil says:

    OK, 1st precept: government process is the least efficient way to accomplish anything. The only thing government should be the first choice for managing is protecting the rule of law and our broaders. Anything else can be done more efficiently (which is to say, at a lower cost). Therefore, to expect Obamacare to be cost effective is a fool’s dream at best. Initially, it may appear lower cost, but utilimately, costs will rise more than they would otherwise. This only delays fixing the problem and makes the cost that much worse in the long-run.
    Next, to Yana, “universal health care” is “civilized” in only that available medical care becomes more limited to a larger majority of the “civilian” population. If you don’t think so, take a very close look at our Canandian friends’ system (or most of Europe, for that matter). Ultimately, universal health care leads to the governement deciding who gets what treatment. What is their decision basis…”Likelihood of success” and, ultimately, “cost control”. That “minimal” care you talk about typically takes 3-6 months to receive in Canada. (Don’t believe me, do some research…) And, ultimately, if you have enough money, you can still get what you need done (either by buying your way “to the head of the line” or going south of the boarder to the US…) So, no, universal health care is more like “universal medical care limitation”…and, by the way, compare tax rates for countries with and without universal health care… more proof that governments are inherently less efficient that individuals/private industry…

  13. DidntvoteforObama says:

    Phil, you are right on. Most of these folks don’t get simple economics. “Wahooooo we are getting lower insurance premiums because of government subsidies.” The money for the subsidies has to come from some where. My guess would be higher taxes since that is what funds the government. Lets pay higher taxes to get lower premiums. I’m sure that the folks that are “Freeloading”(Laurie Spezzano quote above)will now not only have to buy insurance but also pay higher taxes will appreciate that. How does not buying insurance equate to freeloading any way?

  14. Yana says:

    People in America who cannot access health care at all wait longer than our Canadian friends. And less health care is better, especially when the American system creates illnesses and promotes them via TV ads. It is utterly corrupt. But, Phil, I’m not opposed to eliminating health insurance and having each household pay for its own care. That would be the quickest and most efficient road to price reform/control. I also believe that Obamacare does not delay fixing the problems as long as would have been had the other candidate become president. It is the opposers of our president and real health care reform that made Obamacare the abomination it is – but at least it will force reform, simply due to its unworkability.

  15. DidntvoteforObama says:

    Kool-aid anyone? This isn’t even close to reform but is exactly like control. Reform would be finding financial solutions to bring the costs that the medical field incur so that the savings could be passed to us, not by pickpocketing my neighbor and giving it to me to help me pay my medical bills.

  16. bloodbath says:

    A timely article, if I must say!
    I turn 65 in 2014 and will be automatically enrolled. I (like most Americans) know nothing about medicare except that it exists. This article prompted me to read up, seeing as how I will be a medicarer in 2014. From what I’ve gleaned I pay no premium for Part A (paid into the system for over 10 yrs) Part B would cost about $105. I may not need Part D if I am still eligible for my current prescription cost of $3 per meds. I have free dental from a local do-gooder; in my case hearing care comes with Part A and I may be better off with direct coverage from the GOV than to subscribe to private insurance. So all in all I may have to ponyup $105/month from my SS$ which currently pays for all my expenses and then some. Thanks for the article, it enlightened me!

    • Rob says:

      Thanks for the REAL life story of what government healthcare is like for you,

      Being American should come with benefits other than just paying taxes.

      Now we need that for all that paid taxes and are above 55!

  17. bloodbath says:

    In other words – Yes, I’m ready!!!!!

  18. Don C says:

    Yes, Obama, I can keep my existing insurance plan. But thanks to Obamacare, my insurance has gone up over 16% for the last 2 years. Exactly when will we see our premiums “decrease” ???

  19. Beth says:

    I’m finding so much info online that seems contradictory. Several employees where I work (a very small business, 10 employees) have individual plans, myself included. Our existing individual plans that we’ll get to keep through 2014 are not exchange-based. I’ve read somewhere that a Sec 105 plan can only be used with ACA exchange-based plans starting 2014. I’ve also read info that seems to indicate that an employer can NOT contribute to any individual plans on a pretax basis, whether they were purchased in or out of the exchange. How are we to navigate all this and stay compliant, unless we pay a third party lots of money to administer it all for us? I don’t think we can afford that. We’ve escaped the employer mandate to provide group insurance because we’re less than 50 employees, but I think we’ll still be vulnerable to noncompliance issues if we aren’t careful. How can a small employer legally contribute to employees individual plan costs starting 2014, when the plans were purchased OUTSIDE the exchange and are grandfathered?


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