Untangling Health Care Reform: Part 2
The new Health Insurance Marketplace is open for business. It’s designed to offer you affordable choices and to allow you to make side-by-side comparisons of plan costs and benefits. The employer mandate has been delayed, but the rubber is hitting the road for the individual mandate to buy health insurance.
The Affordable Care Act requires insurers to offer comprehensive health benefits, including doctor visits, preventive care, hospitalizations, prescriptions, and more. No one can be turned away or charged more because of an illness, pregnancy, or medical condition.
“People have lots of questions about how this will work,” says Barb Wollan, Iowa State University Extension and Outreach family finance specialist. She’s conducted several workshops on making smart insurance choices. Here are a few questions she’s heard and her answers.
Q. How will tax credits help people with lower incomes?
A. Based on your expected income for 2014, you’ll get an estimate of the tax credit you’ll be eligible for. You’ll have the option to get the credit in advance. Example: If your tax credit is expected to be $3,000, then you can have your health insurance premium reduced by $250 per month. Later, when you file your 2014 return, your final credit will be calculated and compared to the credit you received throughout the year via reduced premiums. If you received too little or too much, it will change your final refund or tax bill.
Q. What if my income changes after I apply for the premium tax credit?
A. If your expected income for 2014 increases (due to a new job, marriage, or any other reason), you should go in the Marketplace and adjust your application. This will prevent you from having to repay any extra tax credit you received. If your expected income goes down, registering that change in the Marketplace may increase your tax credit and reduce your monthly health insurance premiums.
Q. Will I be eligible for lower deductibles and co-pays? How will it work?
A. If you meet income guidelines (up to $28,725 for individuals or $48,875 for a family of four) and you buy health insurance through the Marketplace, you’ll be eligible for a plan with lower out-of-pocket costs, including lower deductibles and coinsurance. Your insurance card will provide that information to clinics and medical providers.
Q. What are the options for making sure that my college-age son or daughter has health insurance?
A. Young adults have more health insurance options than ever. They may be covered on their own through an employer plan, a Marketplace plan (where they may be eligible for subsidies), or a public program such as Medicaid. If they’re 26 years or younger, they also may stay on (or return to) their parents’ health plan. Most colleges offer health insurance plans that students can opt to purchase; these plans also may meet your student’s needs.