Help!!! I forgot to pay my health insurance bill!

We are in the brave, new world of federally-controlled heath insurance.  The Affordable Care Act allowed the federal government to set annual open enrollment periods.  During those weeks (usually in the fall of the year), you may enroll in a new health plan or change your current plan.  Outside of those few weeks a year, an individual cannot enroll in health insurance unless they have a qualifying event such as getting married, turning 26 or losing their coverage.  These open enrollment periods apply to ALL health insurance not just insurance purchased on the federal marketplace that people erroneously refer to as "Obamacare."  The only exception are plans provided through employers or government programs such as the VA or Medicare (which has its own enrollment periods).

Now, here is the problem.  If you forget to pay your health insurance bill and that plan is terminated by the insurance company, YOU CANNOT ENROLL IN ANOTHER PLAN until the annual open enrollment.  And, since you did not have coverage for a period of time as required by the federal government, you will be assessed a penalty on your tax return.

For security reasons, I don't usually recommend for a person give out their banking information.  However, paying for your HEALTH INSURANCE (and perhaps your car insurance) is a big exception!  You need for that bill to be paid first!  What if you were in an accident or some disaster happened and you were physically unable to pay your bill?  Just when you might need your health insurance the most, it could be terminated for lack of payment and you can't get it back.

So, lesson learned.  Everyone has money problems once in awhile but, with the new ACA law, paying your health insurance premiums is as serious as, well, a heart attack.

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Day 13: Today's Important Thing to know about Health Care Reform

Today’s thing to know is about grandfathered plans.  By now, most of you should know whether your health insurance coverage through you employer is going to continue into 2014 and what it will cover.  Plans offered by your employer are considered creditable plans but may not cover the ten standardized categories mandated by the Affordable Care Act.  The reason they don’t have to cover those items is because they are grandfathered plans or plans that were in place when the law was enacted in March of 2010.  As long as the plan is not changed, it may remain as it is.  The only thing that can change is the premium.  Now, you may also be a person who has purchased their own private health insurance.  If you haven’t already, you will be receiving from your insurance carrier a letter outlining your options to continue or change your coverage for 2014.  If you need help decide what your best option may be, contact me.

Day 11: Today's Important Thing to know about Health Care Reform

Today’s important thing to know is about premiums on the new ACA-compatible plans.  In previous videos, we have already covered the rich benefits that will be covered by the Affordable Care Act policies.  Some of the benefits, such as maternity and dental for children, have been benefits that were added on at an extra charge if the policyholder needed them and were willing to pay for them.  Now, those benefits are included in everyone’s premium.  Another benefit driving up premiums is the MOOP that we discussed yesterday.  Putting a cap of what you as the policyholder potentially has to pay out of pocket increases what the insurance company will have to pay.  But probably the biggest premium driver is the elimination of the pre-existing condition clause.  More claims costs mean higher premiums for everyone.  Lastly, though younger people will see a sizeable increase in premiums, perhaps as much as 30%, older Americans will be paying the same or less.  Currently health insurance companies can charge as much as five times as much for coverage of a 60 year old as a 20 year old.  The ACA limits the upcharge for age at three times.  Of course, ACA only applies to people under 65.  Don’t think the insurance companies are going to be getting rich anytime soon though.  The Affordable Care Act also capped their overall profits at 20%.  Anything over that must be refunded to their policyholders.  If you have a question you would like for me to answer, send it to me as a comment or via the contact box and I will include it in an upcoming video.

Day 10: Today's Important Thing to know about Health Care Reform

Today’s thing to know is about MOOP which stands for maximum out of pocket.  If you haven’t noticed already, the government has an acronym for everything.  I wanted to talk about MOOPs today because the first thing I heard on the news this morning was that they had been postponed for a year.  Well, the truth is, only the MOOP on a few small group plans has been postponed.  This is an example of how difficult it is to get real information about the Affordable Care Act and, I hope, is the reason you are watching this.  Anyway, back to MOOPs.  MOOPs are a very important part of the new ACA-compatible plans because they limit how much money you spend each year on your deductibles, co-pays and co-insurance.  The individual MOOP for 2014 is $6,350.  The family MOOP is $12,700.  The importance of the MOOPs is huge.  There are many people today who have a deductible higher than next year’s MOOP.  In a perfect world, you would have an emergency fund equal to the MOOP.  Imagine never having to organize a fundraising event for a friend undergoing cancer treatment and about to lose their home.  If you are one of those smart folks with an HSA account, you may already be set to cover your MOOP.  Remember to check back here tomorrow for factual up-to-the-minute information and share this with your friends.

Day 9: Today's Important Thing to know about Health Care Reform

Today’s thing to know is that the Affordable Care Act made it illegal to deny an individual health insurance based on health conditions.  That means that people with pre-existing health conditions such as diabetes, heart conditions, cancer, etc. cannot be turned down for coverage starting in 2014.  Applications for ACA-compliant health insurance policies will not include any health questions.  In the insurance world, we call this “guaranteed issue” since you cannot be denied coverage.  This provision of the Affordable Care Act will be a great benefit to many people.  Being denied due to pre-existing conditions has prevented many people from purchasing health insurance.  Getting the coverage that they need is definitely a positive.  Now, for the negative.  Covering folks with pre-existing conditions raises the dollars paid out in claims.  This will necessitate increases in insurance premiums to everyone.  Most hard hit will be younger individuals who will have to help share the burden of higher claims costs.  If you are young and make a decent income, you may want to purchase coverage prior to the implementation of ACA-compliant policies to take advantage of lower premiums. 

Day 7: Today's Important Thing to know about Health Care Reform

Today’s important thing to know is about tax subsidies.  Tax subsidies or credits that will be available from the federal government to low-income individuals and families to help them pay their health insurance premiums.  The Affordable Care Act capped the percentage of income an individual can spend on health insurance at 9.5%.  To be deemed affordable, your health insurance must be no more than 9.5% of your annual income or your modified adjusted gross income from your tax return.  This cap is just for an individual.  Family coverage may, and probably will, cost more than 9.5% of your income.  Individuals and families between 100% and 400% of the federal poverty level (or approximately $45,000 for individuals and $90,000 for a family of four) will receive a federal tax subsidy or tax credit each month paid directly to their insurance company thus lower their insurance premium to the affordable level.  Calculating the tax subsidy is fairly complicated so if you have specific questions, email me via the contact box here.  Tomorrow we will talk about when the marketplace and tax subsidies begin.

Day 5: Today's Important Thing to know about Health Care Reform

One of the important things that the Affordable Care Act legislated was standardized benefits.  All policies sold going forward will have to include these benefits in order for them to be creditable. The standardized benefits are:

               Ambulatory patient services

               Emergency Services
               Maternity & newborn care
               Pediatric services including dental & vision
               Rehabilitative/habilitative services & devices
               Mental health & substance use disorder services, including behavioral health treatment
               Preventive & wellness services & chronic disease management
               Hospitalization
               Prescription Drugs
               Laboratory Services

You will notice that these standardized benefits include maternity, newborn care and pediatric services.  That means EVERYONE gets maternity benefits whether you are a 28 year old man or a 60 year old woman.  Of course, the premiums will also reflect that coverage.  One benefit of standardized benefits is that it makes it extremely easy to compare policies from different insurance carriers.  Now, you know today’s important thing about health care reform – standardized benefits.  Stay tuned for tomorrow’s important thing to know – the federally facilitated marketplace.