3. I've been buying my own insurance for years. What changes?
With health reform beefing up what individual plans must cover, you may find that your current policy isn't up to snuff. When you renew in 2014, you must get a policy that picks up at least 60% of the average enrollee's costs and covers 10 key areas, including mental health and prenatal care.
Today only a third of individual plans provide maternity coverage, according to HealthPocket.com; 61% pay for mental-health treatments, and a third have higher out-of-pocket spending caps than the law requires.
Watch the mail. Your insurer may cancel your policy or roll you onto a qualified plan. Note: If you're intent on hanging on for as long as possible to a bargain bare-bones plan that falls short of the new requirements, see if your insurer will let you renew in December. Some will, says Carrie McLean, director of customer care at ehealthinsurance.com. That way you won't have to pay up to meet the tougher standards until you renew next year.
4. Will the exchanges lower prices?
Yes, no, depends, time will tell. Despite all the headlines you may have seen -- PRICES WILL PLUMMET! PRICES ARE DOUBLING! -- this is a question with no single answer, in part because of all the competing forces at play. For starters, because the policies for sale for 2014 will have to be more robust than most of what's on the market now, you can't make an apples-to-apples comparison. Better coverage should cost more. But wait. The insurance-risk pool is changing too: more healthy people because virtually everyone has to buy (good for premiums), yet more sick people because no one can be left out (bad).
Plus, there's the competition that'll be drummed up by the exchanges, where plans will be easy to compare and formerly uninsured buyers may be low on cash.
"Insurers expect exchange shoppers to be extremely price-sensitive," says Dan Mendelson, CEO of consultant Avalere Health. So you may see policies that, while meeting all the coverage requirements, are more restrictive in other ways, including limiting you to one-third to one-half of the doctors and hospitals you might have in-network today. "Carriers are trying to negotiate narrower networks so consumers don't face huge sticker shock," says ehealthinsurance.com's McLean.
Given all this, where are rates likely to land? Nine states released previews over the summer, and in those states a 40-year-old nonsmoker would pay about $250 to $350 a month for a silver-tier plan, according to Avalere.
5. What about my premium? Up or down?
Since insurers can't penalize you for any underlying health problems (except your smoking habit), you may save if you had been paying more because of, say, high blood pressure. And because the law limits how much more insurers can charge a 60-year-old than a 20-year-old -- a 3-to-1 ratio, down from today's typical 5-to-1 -- early retirees will probably get a break, while young adults will potentially owe more if they don't qualify for a subsidy (most will).
The Urban Institute reports that tightening the age spread would cost 21-to 27-year-olds $850 a year and save 57-to 64-year-olds $1,770.
6. Can I still buy insurance off the exchange?
In most states, yes. What you may miss out on are head-to-head comparisons of policies from multiple insurers. And since some states will allow less-robust plans to be sold off the exchange next year -- mainly short-term plans -- you might unintentionally buy one that hasn't met minimum standards and then face a fine for not having insurance.
But if you're not happy with your exchange options -- perhaps your doctor isn't in any of the plans' networks -- you can shop on your own.
7. Will I really have to pay a fine if I opt out?
Maybe. Most Americans must have health insurance by March 31, 2014 (and report it on their tax return). If not, a penalty will be added to your tax bill: the greater of $95 per adult or 1% of household income in 2014, climbing to $695 per adult or 2.5% of income by 2016.
But some can get out of the individual mandate, including anyone who earns too little to file a tax return. Higher earners will have an escape hatch too. If you must spend more than 8% of your income to buy the cheapest bronze plan in your area, you're off the hook.
So if a policy starts at $9,600 a year where you live -- what the Kaiser Family Foundation estimates for the average bronze plan for a family of four headed by 40-year-olds -- an uninsured family earning too much to get a subsidy (about $94,000 but as much as $120,000) would not face a fine.
8. I keep hearing about subsidies. Who is eligible for one?
You (or your adult children) don't have to be poor to qualify. You just need to earn less than 400% of the federal poverty level, which works out to $94,200 for a family of four today, or $45,960 for a single person.
The more you make, the less help you'll get (see the chart at the end of this article). A new study from Kaiser estimates that 48% of those who buy insurance on their own today will be eligible, with the average subsidy for a family coming in at $5,548.
A few rules to keep in mind: To get the subsidy, you must shop on your exchange or, in the 35 states with a federally run exchange, via an approved online broker, such as ehealthinsurance.com. You pay what you owe; the government pays the insurer the subsidy directly. If you or your spouse qualifies for coverage at work, you probably won't be eligible for a subsidy if you opt out in hopes of a better deal.
Figuring out whether you qualify may be tricky if your income fluctuates. Guess wrong, and come April 15 you'll have to repay the subsidy you took in error. To avoid a tax bill, you can take only a portion of the credit you think you'll qualify for, says Mark Luscombe, principal analyst for the tax publishers CCH. Collect the rest when you file your taxes.
What to do if you're retired. (Continued)
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