This week we are going to discuss Obamacare as promised.
Although the consumer website is working a little better, there are still many problems. It appears that the Pennsylvania Insurance Department is going to allow old health plans to be sold for another year. The pricing for these plans still has to be determined. The old plans did not cover the 10 essential areas that ACA thought everyone should have whether they needed them or not. Seniors age 65 and older may not need maturity coverage or pediatric dental coverage, but they will have it when new standards take effect.
The Federal government believed one size fits all. Premiums will increase because of these rules.
There is also concern that some people who think they have signed up for coverage actually have not. This is a problem that still needs to be solved. Also be very careful that you are on the official site. Security is weak and there are reportedly phishing schemes to collect your personal data. Do not provide your Social Security number and other personal data to people who telephone you. Only give this information if you made the call.
The Heritage Foundation did a study of how premiums are increasing. Although Pennsylvania was not one of the states they studied, we can still get an idea of the changes. An adult age 27 in Arkansas will see a 17.4 percent increase over last year. In Arizona, a 27-year old would see his premiums rise from $102 a month to $261.87 per month. A family of four in North Dakota will see their premiums rise from $634 a month to $835 per month. Young healthy adults will be hit the hardest, but anyone not qualifying for a subsidy will pay more. A single person earning more than $45,960 will be disqualified from any government help. Because of this, it is feared that many of these people will not enroll in any program. Although the IRS will fine them, it will still be cheaper than paying the premiums. Without the premiums coming in from the younger healthy citizens, we will probably have another large premium increase next year, because only the sick will purchase policies.
The plans offered under Obamacare are often referred to as metal plans. Bronze Plans are designed to provide 60 percent of medical costs. Silver Plans should cover about 70 percent, while Gold Plans cover 80 percent.
The highest and most expensive plan is Platinum that covers 90 percent. While very basic routine cost is covered without co-pays and deductibles, you can still get hit with a very expensive bill if you have Bronze coverage and have a major medical expense. You are responsible for 40 percent of the bill. This is why people who receive a subsidy and may be able to get a Bronze Plan for free, might be better off paying something out of pocket and getting a higher level of plan. It might cost you less in the long run.
For younger people or even older people who do not qualify for a subsidy, you may be better off using a lower level plan and using some supplemental coverage to cover accidents and other perils. This may help to keep costs down.
Another problem people are going to experience is a harder time getting to see a doctor. If you suddenly have thousands of more people with insurance trying to make appointments, your wait time is going to be longer. Telemed services may be a help for routine doctor calls. Also, more doctors are going to refuse to take patients with certain coverage because of reduced compensation and more reporting requirements.
Health care will never be the same. After the first of the year, we will be offering some workshops to help you figure out all of the changes. Enrollment is nowhere near the level that the government anticipated; some more changes are bound to occur. Dates have been pushed back for up to a year already. You must have some kind of a plan because the cost of health care can destroy a retirement or family budget.
Gary Boatman is a certified financial planner and a local businessman who serves as president of the Monessen Chamber of Commerce.
