Welcome to Kiplinger's "All About Obamacare" chat. Our experts Kim Lankford and Eleanor Laise will be taking questions about the Affordable Care Act tomorrow, Thursday, September 5, from 1:00 to 2:00 ET. Get your questions ready and we hope to see you back here tomorrow!
Welcome to our All About Obamacare chat. We have Kip experts Kim Lankford and Eleanor Laise on hand to answer your questions today. We'll get underway in five minutes, so get your questions ready!
Hi everybody! This is Kim. Thanks for participating -- I look forward to answering your questions!
Hi everyone! Looking forward to our chat.
Hello ladies, thanks for joining us today!
Welcome again to our All About Obamacare chat! Let's take our first question...
Hi Fred, your question is on deck.
Hi Barbara! Some of the most important changes: Starting next year, insurers can no longer deny you coverage or charge you higher premiums based on your health status.
And starting on Oct. 1, people buy their own health insurance can buy coverage through the state exchanges, where they may be able to get a subsidy to help cover the cost of the premiums if their income is 100% to 400% of the federal poverty level.
There won't be very many changes for people on Medicare -- the exchanges only apply to people who are under 65 and not on Medicare yet. But if you buy a Part D prescription drug policy, the doughnut hole coverage gap will continue to shrink.
Barbara, the new law won't reduce your existing Medicare benefits. The law gives Medicare beneficiaries some new free preventive services, including a yearly "wellness" visit.
Fred, the amount of the tax credit is tied to the second-lowest-cost silver plan on the exchange, but you can use it to buy any type of plan on the exchange.
Welcome, Karen. You're up next.
Fred, if you choose a gold or platinum plan, your tax credit probably won't go as far because the premium will be higher.
Fred, as long as your income is from 100% to 400% of the federal poverty level, you can get a subsidy to buy any metal level of coverage (the coverage levels are bronze, silver, gold and platinum, generally with the lowest premiums and most cost-sharing on the bronze level and the highest premiums and least-cost sharing on the platinum level). If your income is below 250% of the federal poverty level, though ($28,725 for an individual in 2013), then you can also get a cost-sharing subsidy that reduces your co-payments and other out-of-pocket costs, but that is only if you buy the silver plan. But the general subsidies -- that help with the premiums -- can apply to any of the metal plans.
Barbara, a silver plan is one that covers 70% of costs, on average, while a gold plan should typically cover 80% of costs and a platinum plan 90% of costs. The lowest level of coverage is available in bronze plans, which should cover 60% of costs for the typical enrollee.
Karen's question is still on the floor, and here comes one from Craig.
Karen, the law allows insurers to charge tobacco users up to 50% more in premiums. But tobacco surcharges will vary by plan.
Hi Tine and Rebecca -- you guys are up next!
Barbara, for your prescription drug question -- the shrinking of the doughnut hole means that you'll have to pay less for your prescriptions when you reach the coverage gap in your Medicare Part D prescription drug coverage. The coverage gap has been shrinking for the past several years -- in 2013 and 2014, you get a 52.5% discount on brand-name drugs in the doughnut hole, and the federal subsidy for generic drugs in the doughnut hole rises from 21% to 28% in 2014.
Craig, essentially anyone can shop for coverage on the exchange. The tricky part is whether you will qualify for a tax credit or any other subsidy on the exchange. If you're eligible for coverage through your wife's employer, you probably won't get these subsidies.
Welcome GP! We will get to your question shortly.
Yes, most insurers will be offering high-deductible health insurance plans on the exchanges, which can qualify you to open a health savings account if the deductible is at least $1,250 for single coverage and $2,500 for family coverage (the 2013 figures; will probably rise slightly for inflation for 2014). This can be a great way to stretch your health-care dollars -- the money you contribute to the HSA is tax-deductible and can be used tax-free for medical expenses in any year.
Rebecca, you'll see the amount of the tax credit that you're eligible for after you submit your application for coverage on the exchange. You can take the tax credit in a couple of different ways. One way is to take an advance credit, which goes directly to the insurer each month and reduces the premium you pay.
Rebecca, you can also choose to pay all the premiums out of pocket and then file for the tax credit on your 2014 return.
When you buy health insurance through the exchanges, the subsidy can be automatically applied to the cost of your coverage, if you qualify based on your income. Then the numbers will be reconciled when you file your taxes for 2014 the following spring -- if, for example, your income ended up being higher by the end of the year than your estimate, you may have to pay back some of the subsidy when you file your taxes.
GP, thanks for your question. Depending on your state, your mother may qualify for Medicaid if she has no or very low income, or she could qualify for a subsidy if her income is from 100% to 400% of the federal poverty level. It will be a good idea to do some research in her state to find out what assistance she may qualify for on her own and what the tax implications would be. Healthcare.gov can direct you to more information about your state's exchange.
Tine, self-employed people with no employees are treated as individuals on the exchanges -- so they would generally shop for coverage on the individual marketplace rather than the "SHOP" exchange for small businesses.