COLUMN-Three tips for older Americans enrolling in Obamacare
(The writer is a Reuters columnist. The opinions expressed are his own.)
CHICAGO, July 25 (Reuters) - The marketing blitz for the launch of Obamacare is underway, with ad campaigns in many states featuring actors, musicians and athletes urging people to sign up for the the health insurance program. A big federal ad campaign will follow in September.
Marketing and communication might serve as an antidote to the confusion and antipathy that persists about the Affordable Care Act (ACA), especially among older Americans. Forty-nine percent of people over age 65 disapprove of the law, compared with just 37 percent of 18-29-year olds, according to the Pew Research Center.
What will Obamacare really mean for older Americans? The answer depends on your age. If you're over 65, you're eligible for Medicare - and that means the ACA touches you in modest but positive ways. For example, the law improves Medicare by adding a free annual preventive check-up, and it gradually closes the prescription drug "donut hole" - the gap between the initial coverage limit and catastrophic coverage in a drug plan.
The ACA will have a profound impact on older Americans (age 50 and up) who are too young for Medicare, and don't have access to group health insurance through an employer. If you're in that group, the ACA requires that you get covered or pay a penalty.
The law also makes it much easier to get coverage, because it prohibits insurers from turning away applicants with pre-existing conditions - a change that is especially important to older people, who are more likely to have health problems.
"Right now, the non-group insurance market is unfriendly for older adults," says Linda Blumberg, senior fellow in The Urban Institute's Health Policy Center. "Insurers expect them to cost more, so it's difficult to get coverage at all, or the coverage is weak."
Starting October 1st, they'll be able to shop for much more robust policies in online insurance exchanges. This first open enrollment will run through the end of April 2014, with coverage starting in January.
If you're among those already firing up your computers, here are the three key points to remember when you shop the market.
Exchange shoppers will be able to choose between four levels of plans, in this order of premium prices (low to high): Bronze, Silver, Gold and Platinum. Plans with higher premiums will have lower out-of-pocket costs. Bronze plans, on average, will cover 60 percent of enrollee costs, with the rest covered by your deductibles and coinsurance. Gold and platinum plans will cover 80 and 90 percent of costs, respectively.
Insurance companies selling in the exchanges will be permitted to set premiums up to three times higher for applicants over the age of 50, due to their higher utilization of healthcare. But that won't matter for many applicants, whose total out-of-pocket costs will be held down by the ACA's cost-sharing subsidies and advanceable, refundable tax credits on premiums.
That means enrollees will get the credit upfront, when their health insurance premiums are due, rather than waiting to file their tax returns the next year - and they can get the full credit amount even if they have little or no federal income tax liability.
The new tax credits are available to families with incomes between 100 percent and 400 percent of the federally-defined poverty guideline. That works out to an annual income between $11,490 and $45,960 for an individual, and between $23,550 and $94,3200 for a family of four.
The law also offers reduced copayments and deductibles for families up to 250 percent of the poverty level. And some families below 138 percent of the poverty level will qualify for Medicaid - the federal health program for the poor - in states that opted to accept the ACA's expansion of that program.
There's also a bit of protection for households with income about 400 percent of the poverty line. The law caps your out-of-pocket spending at $6,350 next year.
The biggest benefit goes to folks at the low-end of the income scale. For example, a 55-year-old individual with annual income of $20,000 in 2014 would pay just $1,021 for a Silver plan, according to a Kaiser Family Foundation subsidy calculator (http://kff.org/interactive/subsidy-calculator/).
By contrast, the calculator shows that a 55-year-old couple with two children and 2014 household income of $80,000 will pay an estimated $7,600 for a Silver plan. But if that same family has household income next year of $110,000, they wouldn't qualify for any subsidy, and would pay the full unsubsidized premium price: $17,300.
WHERE TO GET HELP
Insurance will be sold through a state-run insurance exchange, or an exchange run by the federal government, depending on how your state has decided to handle implementation of the law. If you're not sure where to go, the federal government's health reform website can direct you to the correct location for your state (https://www.healthcare.gov/marketplace/individual/).
In-person assistance will be available from health centers around the country that have been awarded grants by the U.S. Department of Health and Human Services to hire and train "navigators." Some states also will offer assistants and counselors. And states also have the option of allowing insurance agents and brokers to enroll people in the exchanges.
Still want to opt out, even with all that help available? The penalty next year is modest - for an individual, it starts at the greater of $95 per year or one percent of income; it rises gradually from there, to the greater of $695 or 2.5 percent of income for an individual in 2016.
Then again, health problems really can mount up in your 50s or 60s. So, here's a better idea: get with the program.
For more from Mark Miller, see http://link.reuters.com/qyk97s
(Follow us zReutersMoney or at http://www.reuters.com/finance/personal-finance. Editing by Lauren Young and Andrew Hay)