For the more-than 48 million Americans without health insurance, the launch of the Affordable Care Act, or ACA, represents the opportunity to obtain health coverage, often at a subsidized cost. Though it’s true that the roll-out has been plagued by technical glitches — and on-going political grandstanding — the ACA offers a number of benefits to un- and under-insured, such as:
• Ensuring coverage for those with pre-existing conditions
• Allowing young adults to remain on their parents’ insurance plans up to age 26
• Requires “non-grandfathered” health plans — or plans that didn’t exist before March 23, 2010, which includes most plan — to cover 10 categories of essential health services
• A cap on annual out-of-pocket expenses
• No lifetime limits on essential health services
These 6 tips will help you navigate the Affordable Care Act to make the best of this new law.
1) Have your paperwork ready. You can sign up for coverage under the ACA on the program’s website, Healthcare.gov, or by phone. Either way, have your personal information ready before you log on or make the call. You’ll need data such as social security numbers, dates of birth, sources of income, employer’s contact info — basically, the type of information that’s found on your tax return.
2) Avoid fines by signing up during the open enrollment period. The open enrollment period runs from October 1, 2013 to March 31, 2014 for coverage during the year 2014. In subsequent years, open enrollment will run from October 15 to December 7. If you miss this period, you’ll likely have to pay a fine; but if you sign up and pay your premium by December 2013, your coverage will start on January 1, 2014.
3) Premium price isn’t everything. When you’re sorting through available insurance plans, you’ll have tiered options such as “Bronze,” “Silver,” “Gold,” and “Platinum.” Plans with the lowest premiums (Bronze) will have the highest deductibles and cover less. Plans with the highest premiums (Platinum) will have the lowest deductibles and cover more. When choosing, consider which services you are likely to require.
And though it may go against every piece of advice you’ve ever gotten, when it comes to choosing your healthcare coverage, it doesn’t pay to be an optimist. Instead, channel your inner glass-half-empty mindset and evaluate coverage plans based on the worst possible scenario. While a bronze plan will cost you less per month, if you get really sick, you’ll end up with much higher out-of-pocket costs that will likely eclipse that low monthly premium.
4) Vet your insurance provider. Before you choose the first insurance plan that fits your budget, do some due diligence on the insurer. Look for companies with high financial ratings — “A” is best. The big-name, national insurance companies and large regional carriers tend to be more financially viable, says Mark Hatcher of EnginuityHR.
5) If you already have employer-sponsored health insurance, Medicare, Medicaid or military insurance, you don’t have to change your plan. The ACA is meant to allow people without employer-sponsored insurance to purchase coverage; if their income is 400 percent that of the federal poverty rate, they’ll qualify for a subsidy. If you like your current insurance, you can keep it — as long as it meets the ACA’s requirements of covering the essential health services.
If your current policy doesn’t meet these standards, you’ll have to choose a new one. Chances are, however, it’ll cost less and cover more.
6) Have patience. Yes, there have been some (very publicized) technical difficulties associated with the ACA’s rollout, especially related to the Healthcare.gov website’s design. But glitches and challenges should be expected for a plan of this scope, and over time, these obstacles will be smoothed out. Remember, other large social programs such as Medicare and Medicare Part-D had messy rollouts too, and now almost no-one — with a few exceptions — likes to imagine life without them. In time, the ACA will likely seem just as essential.
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Stu Steinberg of Eaglerock Financial, Inc. has worked with families and businesses for more than 20 years, helping them work toward their financial goals through a holistic, well-rounded approach rooted in objectivity, education, and empowerment. Stu is highly regarded by clients and colleagues for his unique combination of investment, CPA and entrepreneurial experience in the high net worth market.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investment(s) may be appropriate for you, consult your financial advisor prior to investing.
Advisory services offered through LPL Financial, A registered investment advisor.
29 January 2014