Seven car keys

The launch of the ACA, aka Obamacare, has been a bit of a rollercoaster — technical issues, canceled policies, etc. However, most of these issues have been sorted and we are just a few days away from the end of open enrollment. Of course to ensure confusion continues, the administration announced recently announced an extension for people who have started the enrollment process but not completed it.  If you want coverage but have not shopped for health insurance yet, these last few days are crucial for you.  In a two part series, we have covered the 7 most important things that you need to know before the enrollment window ends. So, let’s get started.

1)    You are legally obliged to have health insurance after March 31 – The entire premise of the Affordable Care Act is built around the concept of health insurance for all. Unless you are covered by an individual or employer health insurance plan or are covered by Medicaid, you will have to pay a penalty after March 31. These penalties will be either $95 or 1% of your annual income whichever is greater. So unless you are insured, be ready to pay up. In this arrangement, there are some exemptions that might save you the penalty even if you are uninsured. So, for instance, people who earn too little to be eligible for federal tax filing would not be required to pay those penalties. Similarly, people who cannot buy a health insurance plan that costs less than 8 percent of their annual salary. A wider category, that of “hardship exemptions,” is designed for people who had their health insurance canceled because of non-compliance, or for those who couldn’t buy health insurance due to technical glitches on the website.

State Exchange

2)    For the eligible, quality health insurance is affordable – One of the success factors of Obamacare has been the federal insurance subsidies available to eligible enrollees. People who purchase health insurance off federal exchanges can take advantage of  tax credits which can lower insurance premiums, but their annual income must fall within the specified range. Subsidies are available for people earning from $11,490, per year/per individual, to $45,960 per year/per family. The insurance subsidies are dependent on several factors other than the annual income of an individual, and include family size, price of health insurance, and combined household income. Here’s an example — suppose you have an annual income of $15,860, which is 138 percent of the federal poverty level, and you have an annual insurance premium of $5,000. Thus, you will get about $4,480 premium tax credit and your contribution toward the premium would only be 3.3 percent. For household incomes in the range of 250 percent of the federal poverty line, additional subsidies are available which cover out of pocket expenses of deductibles and copayments.

3)    Medicaid coverage has expanded, but some sections are still uncovered – The ACA, by design, was intended to cover all citizens in one or another. For people earning up to 133 percent of the federal poverty line, they were supposed to be covered via a Medicaid expansion across all states. However, as per the Supreme Court ruling in 2012, the states were given the power to reject Medicaid expansion. As of now, 25 states have chosen not to expand Medicaid, thus triggering a coverage gap for individuals falling below 133 percent of the poverty line. Unfortunately, this is the section with the highest need for subsidized, quality health coverage. Although they won’t be required to pay any penalties, the situation doesn’t look good for them. There is also a Sophie’s choice, which most states are facing for Medicaid expansion.

Although the above 3 are the most important aspects you need to know before Obamacare open enrollment window closes, the remaining 4 aspects will show you why you need to enroll right now for getting a better health insurance. Stay tuned for our final part of this series, which shows you how easy it is to get insurance through Obamacare marketplaces.

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