My Turn: The new health insurance marketplace
September 26, 2013
Many clients have been asking us the million dollar question: "How is the new health care law known as the Affordable Care Act going to impact me?"
The way you purchase and utilize you health insurance will change dramatically once January 1, 2014 rolls around. Most individuals and businesses still do not fully grasp these changes. The changes are quite numerous and cannot be summarized in one article.
The biggest change occurring in 2014 is the new "Individual Mandate." This simply means that if you do not have some type of health insurance on January 1st, then you will pay a "tax." What are the fines or taxes for not having health insurance?
In 2014, it will be the greater of $95, or 1 percent of your taxable income.
In 2015, it will be the greater of $325, or 2 percent of your taxable income.
In 2016, it will be the greater of $695, or 2.5 percent of your taxable income.
The law will increase the fines (or tax) each year after 2016. So it will cost you increasing amounts of money if you do not carry health insurance. There will also be additional penalties and consequences for signing up "late."
This part of the law was designed to address the large number of uninsured people in the country. According to the U.S. Census Bureau, it is estimated that there were about 48.6 million people in the U.S. with no health insurance in 2011. This represents 15.7 percent of the U.S. population.
Facing the choice to get insurance or pay a penalty, you may resort to simple math and conclude that $95 is a lot more affordable than the $3,000 or $4,000 for the lowest level of insurance coverage available on the state exchanges.
Some consumers will pay the penalty instead of buying insurance. But they should consider the long-term financial benefits of having health insurance such as:
• You risk huge medical costs due to an accident: Being young and healthy does not vaccinate you from the kind of risk that can leave you and your family destitute.
• You may have limited access to quality medical care when you do need it: Some providers may simply decline you as a patient when they find out that you are uninsured.
• You will be more likely to neglect the routine, preventive procedures: If you are unwilling to pay for insurance, you'll probably skip the high cost of an annual check-up or routine procedures.
Beginning January 1, 2014, the new insurance laws also will not allow insurance companies to reject anyone who has what is known as a "pre-existing condition." If you apply for coverage, they must accept you.
Peter Trummer is owner of Peter Trummer Insurance, a health, life and disability insurance brokerage and benefits consulting firm located in Truckee. For more information on the Affordable Care Act or for "free" quotes, go to their website (currently being re-designed) at PTinsurance.net ,or call 530-587-8900.
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