Spend more than 10 minutes on the internet looking into the subject and you’ll find an incredible variety of opinions about the Affordable Care Act–or Obamacare.
It will eventually help get 20 million uninsured people coverage. It’s the worst thing to ever happen to the American economy. It’s a safety net. It’s socialism.
Regardless of your political views, Obamacare is reality, and if you don’t get health insurance through your employer, you’re going navigate through it sooner or later.
The program kicked off in 2014, with the first deadline for uninsured people to join through on of the state insurance exchanges March 31, 2015. As of the end of open enrollment, nearly 12 million previously uninsured people signed up in one of the state exchanges, according to the Department of Health and Human Services. Now, if you don’t have health insurance, you’ll have to pay a fee through your federal income taxes that can range from a few hundred dollars to a few thousand, depending on your income level and family size.
If you’re going into the exchanges, what does this mean for you? What are your options, and how much will it cost?
The plan offers a variety of choices, based on where you live. Individual states run their own insurance exchanges, where you can compare policies by various private insurers. Prices vary by coverage and by state, but all of the programs have the same baseline requirements. You can’t be excluded because of a preexisting condition or your age. Basic health services like childbirth are covered, as are basic wellness services.
The plans are broken down into five categories–bronze, silver, gold, platinum and catastrophic. The main differences in the plans are how much you have to pay in the form of premiums, deductibles and co-pays. The bronze category generally offers the lowest premiums, but has a high deductible. It’s appropriate for younger, healthy people who are looking for wellness visits and protection from big, expensive surprises. Premiums go up as you go, until the catastrophic plan, which is a basic high-deductible safety net. The main difference between the bronze and catastrophic plans is that you can receive income-based tax benefits and subsidies toward your bronze policy cost, while the catastrophic plan is a pay-as-you go, with no breaks or subsidies.
If you get health insurance through your employer, you don’t have to do anything. However, it could be worth a look to see what’s available on the exchange and compare it to your work plan. If the exchange plans are better (or less expensive), you always have the option to switch.
One of the more controversial parts of the law is the way the fees are collected. If you don’t sign up for insurance, you’re liable for the fees through your federal tax return. One important point to mention is that if you have to pay a fee through your taxes for a lack of coverage, there’s no lien or other legal penalty if you don’t pay. The IRS just keeps track of what you owe, and will dock it from any refund you get in the future.