50+ Lifestyles

Who is Paying the Bill??

By Richard J. Schillig, CLU, ChFC, LUTCF
Independent Insurance and Financial Advisor

“The Marketplace” is the name given to the state insurance exchanges mandated by the Health Care Reform Act passed into law in 2010. Provisions of the Affordable Care law required states to establish Insurance Exchanges. Exchanges in both Iowa and Illinois have been up and running. The law has been gradually implemented over the years. 2014 was the mandate year requiring all consumers to have major medical insurance. Qualifying consumers went to The Marketplace to take advantage of premium subsidies offered through the Marketplace. Premium subsidies are available ONLY through The Marketplace and are intended to help pay the cost of major medical insurance.

The Annual Enrollment Period through The Marketplace continues through Feb 15. If you have acquired insurance and are receiving assistance – with a subsidy – toward the cost of major medical insurance, now is the time to review your plan and decide if you need to make changes for 2015. You may stay in your current plan (as long as it’s still offered) or make changes.

Premium subsidies are a huge part of The Marketplace helping qualifying consumers with cost of major medical insurance. Assuming you have health coverage through the Marketplace and are receiving a premium subsidy, you may need to verify continued eligibility for the subsidy. Go to The Marketplace at www.healthcare.gov. Open your account and verify the information on the account, especially income changes for 2015. Major medical insurance premium has had significant increases in premium. If you are on an “Obamacare” plan now, you may have received notice of the premium change for 2015. For most, this premium change is a real jolt as significant premium increases are there.

Let me give a couple examples of insurance plans and premiums. A female age 37 applied for major medical insurance on The Marketplace in mid-2014. The plan in which she enrolled had a monthly premium of $201. Because of her income, she received a premium subsidy of $140 resulting in net cost to her of $61 for 2014. The premium changed in 2015 to $226. Without an increase in premium subsidy, her cost would now be $86. If her income changes in 2015, the premium subsidy may change as well. Another example is a male age 31 with a regular premium of $153 monthly. His eligibility for subsidy was $116, resulting in his actual out of pocket cost of $37. In 2015 his total premium increased to $174. Again, if his income changes in 2015, he may qualify for change in subsidy. But look at these premiums. The net cost to these two young people is exactly what the Affordable Care Act is intended to do. Neither of these two individuals would have acquired insurance without the premium subsidy. With the premium subsidy the cost of insurance is now affordable.

Another issue with the Affordablecare Act is – who is actually paying the premium subsidy to make the insurance affordable? The answer to that question is the usual – the taxpayer is kicking in the premium subsidy. Now let’s stop and think about this cost to the taxpayer versus the cost again to the taxpayer if insurance was not in force and a major medical issue arises. Who then will pay for the cost of care for the major medical issue if no insurance existed? Doctors and hospitals would have provided care. The cost of care would have been eventually charged to Medicaid and ultimately to the taxpayer.

Cost of healthcare remains. Cost of healthcare will continue to increase. Cost of the insurance premium will continue to rise. Many issues remain to be considered with the Affordable Care Act. One constant remains though – cost to the taxpayer will continue to increase. That’s our system folks. The Annual Enrollment Period for the mandated Obamacare continues through Feb 15. Call us for assistance.