Health Care Reform

Starting January 1, 2014, the Affordable Care Act (ACA, or as some of you might know it, ObamaCare) will be part of our lives. It is a massive, complex, confusing law with many, many moving parts.

Thank goodness The Insurance Mom is here to help you understand and use it! For the Top Ten Things To Know go here.

The ACA is basically about two things: 1) accessibility and 2) affordability.

Accessibility simply means that health insurance will be available to anyone, regardless of prior health problems (pre-existing conditions). The insurance companies won’t be allowed to ask you about that embarrassing thing that happened to you in college!

Affordability means that some people will get financial help from the federal government – known as a subsidy – to help pay for the cost of the health insurance (the premium). The insurance companies will base their prices only on your age, zip code and the plan you choose, not your health history.

There will be tools available to help us determine if you qualify for a subsidy. How much help you get from the federal government will be based on your household income. If your income is really low then you might qualify for Medicaid (in California, it’s Medi-Cal).

Where you buy health insurance will vary… either on the open market or on your state’s Exchange – aka Health Insurance Marketplace. In California, our exchange is called Covered California.

But, you will only get federal help to pay for your insurance if you buy your coverage in your state’s Exchange/Marketplace. If you don’t qualify for a subsidy, there is no need to buy insurance in your state’s Exchange/Marketplace.

If your employer is generous and provides group benefits for you, your employer could also go to the Exchange for small group plans, designed for businesses with under 50 employees. However, there is no requirement for small employers to provide any insurance at all. Large employers (those with over 50 employees) will have to comply with the ACA in 2015.

(No matter what, be sure you have a fabulous broker to help you… don’t do this by yourself!)

In any scenario, however, the ACA says that in 2014, everyone must have health insurance. What if you don’t want it?

Well… that would just be silly. Let’s remember the premise behind insurance. It is a money management tool, that’s all. Insurance – even your car insurance – is designed to protect you, my dear, against unmanageable, unforeseeable expenses.

And with the ACA, if you don’t buy health insurance, there will be a tax penalty. So why put your entire financial health at risk and have to pay the IRS more money when buying health insurance will be the grown-up thing to do.

It will be easy if you have a well-educated advocate on your side. So, don’t be stubborn, contact your Insurance Mom, I’m here to help.

Read the Top Ten Things to Know in 2014 »