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Q&A: Still Have Questions? Obamacare Deadline Is Monday

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WASHINGTON — The new health care law helps some people, hurts others and confuses almost everyone. Hoping to simplify things a bit, The Associated Press asked its Twitter, Facebook and Google Plus followers for their real-life questions about the program and the problems they’re running into as the March 31 deadline approaches to sign up for coverage in new insurance markets.

Here are their questions and AP’s answers:

WHEN YOU LOSE YOUR PLAN

Q: “My premium AND my deductible are doubling … in order to comply with Obamacare — I liked my coverage before, and I was promised repeatedly I could keep it. My husband is self-employed so we don’t get the breaks big corporations do. My question is how are self-employed people supposed to afford insurance under the ‘Affordable Healthcare Act’?” — Amber Wiser Thompson, St. Clairsville, Ohio.

Her story: When she posed the question, she and her self-employed husband were facing soaring costs for a new health plan starting this month. Their insurer was discontinuing their old plan because it didn’t meet standards of the Affordable Care Act. The insurer’s replacement plan cost $1,100 a month with a $5,000 deductible — in both respects, twice what they’ve been paying. More than 4 million Americans similarly found themselves scrambling for new private coverage when their old plans were pulled from the market because they didn’t comply with the nation’s health care program.

A: Instead of accepting a new and more expensive replacement plan from an insurance company that discontinues your policy, shop for coverage on the HealthCare.gov exchange, see if terms are better than you have now — and check whether you qualify for a subsidy.

What happened: The Thompsons did just that and found a policy on the Ohio exchange that headed off the big cost increase. It’s also from the same insurer. “I have an almost identical policy with the same premium and deductible that I did before,” Amber Wiser Thompson said.

There’s a catch though. Their costs stayed about the same only because they qualified for a tax credit on the exchange. Because her husband has gone into his own business, the family’s income this year is highly unpredictable. If her husband makes too much money, the couple will lose their subsidy and see their costs jump after all. In that case, they may have to pay back thousands of dollars.

“It seemed to be something I just couldn’t get around,” Thompson said. “I researched and filled out applications and was on the phone for about three days to get to this point.”

Once she found the new policy, she learned that she and her husband might have been able to keep the old policy after all because it apparently was being extended at the last minute. But she decided to go with the new coverage, she said, describing her situation in a phone interview and emails. “There was no way I was going through that again so I left well enough alone.”

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WHEN THE PENALTY HITS

Q: “If I don’t sign up, when does the penalty start to affect my wallet? How much is the penalty? How is the penalty collected?” — Shanna Derringer, Manning, S.C.

A: You’re likely to feel the penalty in early 2015, when you file your taxes for this year. That’s when you’re supposed to verify to the IRS that you’ve got coverage. (If you don’t make enough money to have to file a federal tax form, you don’t need to buy coverage under the law.)

The penalty for this year is $95 for an individual or 1 percent of income over $10,000, whichever is greater. So someone who makes $30,000 in 2014, let’s say, could be charged $200.

The penalty jumps after that. In 2015, it’ll be $325 for an individual or 2 percent of income, whichever is more. In 2016, $695 or 2.5 percent.

There are caps involved, and different numbers for families, making the math even trickier. But why do math when the Tax Policy Center will do it for you? Plug in your income and dependents here and see: http://goo.gl/A4MKxh

As for how it’s collected, if you are due a tax refund, the IRS can deduct the penalty from what it gives back to you. Otherwise, the IRS will tell you what you owe. One more thing: The government considers how many months during the year you’ve been without insurance. So if you lacked coverage for half the year, you could be subject to half the penalty.

More detail on who needs insurance and how the penalty works: http://goo.gl/Rw469s

CAN THEY FINE ME?

Q: “I’m currently unemployed and without health insurance. How does this affect me at this time? … I’ll be fined because I can’t afford coverage?” — Cat Moncure, Harrisonburg, Va.

A: As long as you don’t have income, the government doesn’t require you to get health coverage and won’t fine you. Specifically, if you don’t make enough money so that you have to file a federal tax form, you’re in the clear from the law’s insurance mandate. The tax-filing threshold is $10,000 for an individual, $20,000 for a family.

But let’s say you get a job this year and earn enough so that you have to file a 2014 tax form. Then you’ll have to do some math to see whether you have come under the requirement to get health insurance.

If the cheapest policy you can get costs more than 8 percent of your income, you still don’t need health insurance. In that case, you’ll get an exemption from the coverage requirement when you file your taxes. If you make more than that, then you will need coverage or face an IRS penalty.

Of course, none of this helps you get health care if you need to see a doctor while you are jobless.

In some states, Medicaid is the answer because they’ve expanded the program to low-income adults without children, not just families, children or certain disabled or elderly adults. But Virginia did not expand its program. The new Virginia governor, Terry McAuliffe, has made Medicaid expansion a priority. But there’s no telling how long that might take or whether he’ll succeed.

It’s probably worthwhile to go to HealthCare.gov, click on “see plans before I apply” and follow the steps to find out what plans are available in your area, what they cost and what kind of subsidy you might get if you purchase one in that marketplace. You don’t lose anything by window shopping.

Whatever you do, know that if you get a job during 2014, your new income may require you to get insurance at that time. You’ll want to keep an eye on that, so you don’t find yourself facing a penalty when you file 2014 taxes.

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TRAPPED IN WORKPLACE PLAN?

Q: “My insurance went up. Now, I have no $$ left to actually afford the copays or the much needed eyeglasses for my daughter. I think I’m what Obamacare considers the working poor. I work, therefore I don’t get free health care. Like everything else offered to help struggling people, I make less than $200 over the minimum, so I get zilch.” — Laura Carter, suburbs of Savannah, Ga.

Her story: Carter supports an 18-year-old daughter and herself with a $27,000 salary from her job as a mitigation specialist and collector in Savannah, 45 minutes from her home. When her company changed insurers in October, her premiums for family coverage soared by about $150 a month, to $285.

A: People like Carter, who feels stuck in a workplace plan she can’t afford, may qualify for subsidized coverage in the new insurance markets, called exchanges, under certain conditions.

The exchanges are mostly for people who do not get insurance at work. But they are also open to those who get work-based insurance that costs too much. The rule is this: If you are paying more than 9.5 percent of your income for your employer’s insurance, you should be able to switch to a plan in the exchange, and if your income is low enough, you should qualify for subsidized premiums in that plan.

It gets a bit more complicated when your work coverage extends to a family member, like Carter’s daughter. In Carter’s case, she has to ask her employer how much insurance would cost her if only she were covered. If it’s more than 9.5 percent of her income, she meets the test. Then she and her daughter should be able to move to a plan in the exchange. Based on her income, she should be able to find considerably cheaper coverage there.

In a family with adult children under 26, it may also be worth seeing how much separate policies would cost for parent and child, and whether the child might qualify for Medicaid coverage. These options are much more promising when the child is no longer a dependent on the parent’s taxes. Also, Medicaid might only be an option in states that expanded the program. Georgia, for one, didn’t.

Under the law, children up to 26 can stay on their family’s coverage, so there’s no need to split it up if it doesn’t save money.

(© Copyright 2014 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed.)

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