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3 big ways Obamacare changes health coverage

The Affordable Care Act will have a giant impact on people with pre-existing conditions, young folks, and early retirees.

By Smart Spending Editor Sep 25, 2013 5:42PM
This post come from Kimberly Lankford at partner site Kiplinger.com.

There are three significant changes Obamacare will have on the health care horizon:


Image: Woman on scale (© Zave Smith/Corbis) 1.Pre-existing conditions won't matter

You can no longer be denied coverage or charged steep premiums because of a pre-existing condition -- or qualify only for insurance that excludes your medical condition. And you won’t have to stay in a job longer than you want to in order to keep your health benefits. If you already have nongroup coverage, you should be able to find a better deal than you have now, even if you don’t qualify for a subsidy. So check out the new options as soon as you can on October 1.

When you comparison-shop policies, see what the out-of-pocket costs would be for the types of doctors’ visits and procedures you tend to have, how much you would need to pay for your medications, and whether your doctors and hospitals are covered in the plan’s network. Do the math to estimate whether it’s better to pay extra for a gold or platinum policy that has higher premiums but may have lower out-of-pocket costs.

If you have a policy through a high-risk pool now, find out what will happen to that coverage on January 1. The federal Pre-Existing Condition Insurance Plan will be discontinued on December 31, but some of the state programs may let you keep your current coverage, at least until your policy expires in the middle of next year. Ask your plan about your options, and see the status report at www.naschip.org for more information.

2. Early retirees can breathe easier

Many retirees who quit their job before Medicare benefits kicked in have had to scramble to find affordable insurance. That’s especially true if they worked for an employer that doesn’t provide retiree health coverage.

In the past, early retirees with preexisting conditions tended to keep their employer’s coverage through COBRA, the federal law that requires companies with 20 or more employees to let workers stay on their health plan for up to 18 months. But COBRA coverage can be expensive because you have to pay both your share and the employer’s share of the cost (employers typically pay about 70% of the cost for employees).

You’ll still be able to keep COBRA coverage after 2014, but you may find a better deal on your own, now that you can’t be rejected or charged more because of your health. Also, premiums for, say, a 64-year-old can be no more than three times as much as they are for a 21-year-old, whether you buy coverage on or off the exchanges.

You can get the subsidy only if you buy a policy from your state exchange, and it’s a good idea to run the numbers using the tool at your exchange’s Web site to see whether you qualify. Even if you earned too much to get the subsidy while working, you may qualify after you leave your job and your income drops.


The subsidy is an advance tax credit -- the money will be applied to your premiums immediately when you buy coverage on the exchanges, based on the income you’ve reported. When applying for coverage on the exchange, estimate what you expect your income will be by the end of the year, including the drop after you stop working.

Compare the cost of buying your own policy with the cost of keeping coverage through COBRA (which doesn’t qualify for the subsidies). And compare the coverage and networks. You may want to keep COBRA, even if it costs slightly more, if your doctors and providers aren’t covered under the new policies, especially if you’re currently undergoing medical treatment, says Karen Pollitz, senior fellow for the Kaiser Family Foundation.

3. Young adults may pay more

Young adults—and in many cases, parents who were subsidizing them -- already got a major perk from the health care law starting in September 2010, when they were permitted to stay on parents’ policies up to their 26th birthday. That’s true whether or not you live at home, are still in school or are a dependent for tax purposes. In most cases, staying on your parents’ policy is still the best deal, especially if they already have to pay for family coverage for younger siblings.

But if you live in another city that isn’t covered by your parents’ network, or if your parents aren’t covering other children and have to pay a lot extra to keep you on their policy, compare the cost of buying coverage on your own. Unfortunately, healthy young adults looking for coverage on their own are likely to face some of the steepest premium increases under the new law.

In most states, you can currently find policies for about $100 to $200 per month (except in a few high-cost states, such as New York). Those prices are likely to increase, although the new policies may be more comprehensive. In California, for example, a 25-year-old will pay an average premium of $250 per month for a silver policy.

Avalere Health estimates that about two-thirds of young adults (age 30 or younger) who are currently uninsured or have nongroup health insurance will be eligible for the subsidies. If you’re under 30, you can also buy a special high-deductible catastrophic policy. In California, a catastrophic policy can cost as little as $141 per month. These policies don’t qualify for the subsidies.

If you currently have your own policy -- or you buy one before the end of the year -- you may be able to keep it at current rates until the year-long policy term is over. Rules vary by state and insurer.

More from Kiplinger.com:


41Comments
Sep 26, 2013 9:38AM
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"Many retirees who quit their job before Medicare benefits kicked in have had to scramble to find affordable insurance."

 

Quit my azz...... Lost their job. This story is so biased. The media is criminal.

Sep 26, 2013 8:25AM
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You forgot the most important feature, It guarantees that insurance companies remain in business.  Lets face the facts, medical care is cheaper in every other country in the world and in most first world countries it is better.  The affordable health care act had nothing to do with improving health care or making it competitive with the rest of the world.  It was meant to protect insurance companies, specifically AIG who insures most of the doctors and lawyers in the US.  Who else could turn out a 1,000 page document in 30 days that did nothing except study health care, tax people going offshore for medical care and make recommendations like preexisting conditions which were too expensive to continue beyond the first year.
Sep 25, 2013 7:31PM
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Really! Why not tell the entire story? Most people are in for the screw job of their life.
Sep 25, 2013 9:45PM
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Highlighting the positives is how they're trying to sell this plan. It's the negatives that are killing it. Fewer working hours, employers dropping group insurance, lay offs, higher premiums for most, and how healthy you are seems to have little impact. Time will tell if it succeeds or not. 
Sep 26, 2013 5:03AM
Sep 26, 2013 6:50AM
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LOL...pre-exisiting conditions won't matter...  LOL...  Of course they do.  SOMEONE has to PAY for the losses suffered on them.  The only thing Obamacare does is shift the BURDEN and COST to someone ELSE.

 

Is it fair to have someone ELSE pay for the pre-existing condition?  This is the democrat way.  LEECH off someone else.  Don't pay your own way in life.  Life is not fair. Deal with it.

 

Democrats are the worst form of leeches.  They steal from others and feel they are ENTITLED to do so.  We used to hang horse thieves.

Sep 25, 2013 11:56PM
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The only health care I will depend on until this thing is eradicated may very well be over the counter medicine at CVS, the nearest liquor store, and my Savior Jesus Christ.  When and if I become ill.  Otherwise I might, emphasis on MIGHT pay the fines for 5 years before my Medicare kicks in.
Sep 26, 2013 10:22AM
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Wow, I have decided to buy a new car insurance policy that mimics Obamacare. Since pre-existing conditions do not matter any more, I will just buy car insurance after any wreck that I may have in the future. 
Sep 26, 2013 11:07AM
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The U.S. Government cannot take care of their own problems properly.  I can't imagine that they will take care of my health or healthcare any better.  I say go back to the good old days without managed care (cut the middleman), see your doctor, pay your bill and forget all this messing around with insurance companies. 
Sep 26, 2013 12:11PM
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Had Cruz taken his 21+ hours to read aloud and translate the ACA, specifically giving facts and examples on how he would have improved and/or changed the bill for the good of the People, many may have come away with respect and admiration for his efforts. Instead, his contribution to the average American's knowledge and understanding of what the country is up against was close to Zero. Many of us were not impressed, and came away with a clearer picture of how proficient politicians are at wasting time and avoid doing anything constructive while band-standing for their Party.  
Sep 26, 2013 9:54AM
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While you all whine about it, no one on the Republican side has any answers and that is why they will not win the debates anymore. First, people with pre-existing conditions need care and cannot pay 900+ a month for a policy. Young people making between 8-12 dollars an hour cannot pay 300 a month for healthcare. People over 60 are considered high risk by the insurance companies and would never get affordable care on the open market as it currently has been. I don't think Obamacare is  implemented efficiently either, BUT solve some of the issues Republicans or you will just lose again. 
Sep 26, 2013 11:04AM
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Gee how many things were left off of this list? 1) if you like you coverage you cannot keep it as seen by Home Depot and Walgreens moving part time workers to the exchages  2) democrat parasite lawyers keep feeding thanks to no tort reform in the bill 3) America will have England style rationing of healthcare services as the President of the Cleveland Clinic said on CNBS on Monday morning they will now be paid less for the same services 4) taxes will go up and working Americans foot the bill for the democrat criminal class.
Sep 26, 2013 6:31AM
Sep 26, 2013 10:05AM
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Republicans need to speak up about their solutions. Just cutting programs with a hatchet  is not a solution OR talking for 21 hours and getting paid by the taxpayer is not a good ROI either.
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The reason the insurance companies get to stay in business is that no one wanted "socialized" medicine so this was the only way any kind of healthcare reform could be done. Big employers are tired of healthcare costs just like anybody else and they are considering giving employees subsidies to purchase insurance on the private exchanges. All of this will give people more freedom to have insurance without being dependent on their job for health insurance. Since we cannot count on jobs in today's times, it is nice to be able to count on health insurance that doesn't disappear when your job does. Employers may ultimately be able to pay higher wages if their money isn't always tied up in buying health insurance for employees. And no, Obamacare isn't the reason employers have to pay for health insurance for employees, good employers have already been purchasing health insurance as part of employee benefits.
Sep 26, 2013 10:36AM
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What if your State has not decided to go with the exchange...what does one do if an early retiree wants Obamacare?
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will the tax credit for Obamacare be available to seniors on medicare??? They on average only get $12,000 a year in income which would qualify them for free health care insurance.
Sep 26, 2013 1:16PM
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My MD told me the obama programme. will stop medical collection agencys from putting negitve information on you credit report, But they can continue to make efforts to collect what is owed them. Does anybody know the truth to this?
Sep 26, 2013 10:11AM
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Taking  the medical device tax out of the program does not make government any smaller.
It also does not help the person trying to pay their healthcare bills or lower the cost to the average American. Don't tell us that the money saved by the device maker will lower the cost of the device either.
Come on Republicans do you have anything else?
Sep 25, 2013 9:14PM
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I can only imagine how great this government run health care intrusion is going to help me and my family...

Every other government program that we are on is just such a great boost to our self worth and pride in being able to provide for ourselves.

I can only hope that I will be able to quit my job so that I can sit on the couch and wait on more handouts from the poor hard working tax payers that are too stupid to fall in line with all of us welfare cases that deserve more... more... more we just like it so we want more.

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