Beginning 1/1/14 and ending 4/1/14 the first national ‘Open Enrollment’ period begins under Obamacare. During this ‘Open Enrollment’ period, applicants will be able to purchase health insurance coverage on a guaranteed issue basis (without regard to preexisting conditions) from any carrier in the country that offers a QHP – ‘Qualified Health Plan’.
Providing you live in a state that opens their exchange on schedule, you will be able to begin shopping for QHP’s on 10/1/13, albeit coverage can not begin until 1/1/14. After this first national Open Enrollment period ends on 4/1/14 Individual & Family applicants will not be able to get coverage for preexisting conditions unless they enroll in an Employer Sponsored Group health insurance plan. Outside of that, applicants seeking individual or family coverage will have to wait until the next national Open Enrollment period which is scheduled to begin on or about 10/1/14 and end on 12/31/14. This is especially true since all state high risk pools will be dissolved and their policy holders will be forced to purchase coverage inside Obamacare exchanges. In other words, you can not ‘keep your plan’ as president Obama promised you could over and over:
If your annual MAGI – Modified Adjusted Gross Income – is less than $45,960 for an individual or $94,200 for a family of four. And, you do not have qualified Employer Sponsored health insurance. You will qualify for an APTX – Advance Premium Tax Credit – to artificially lower your cost for expensive “Obamacare approved” health insurance available inside the exchanges. An APTX is nothing more than forcibly redistributed income from the few, the proud, the 51% of us who still pay income taxes. Depending on your income, your APTX may be quite significant. To find out how large of an APTX you qualify for click here.
August 3, 2013 UPDATE: If your MAGI is above the aforementioned levels, and you have your own non ‘grandfathered’ Individual or Family insurance policy, you will pay significantly more for your health insurance coverage than you are paying now. Carriers like Aetna, Humana and Blue Cross Blue Shield of Illinois will soon be sending you a letter offering you option A or option B. These letters will be mailed out during the months of October through November of 2013. With both options, you will either lose your plan on 12/31/2013 or on 12/30/2014 depending on the actions you take. And, you will pay signficantly more once your effective date is changed and the Obamacare mandated “Essential Health Benefits“ are added to your policy.
At least, this is how it was all supposed to work. That is until the Treasury department decided, without the consent of Congress to simply suspend the employer reporting requirement. This last minute, politically motivated decision may well end up barring many from receiving an APTX that they otherwise would have qualified for. Can you say ‘trainwreck’? Well, Democrat Max Baucus – the principle U.S. Senate author of Obamacare – most certainly can:
If your MAGI is above the aforementioned income levels you will be far better off purchasing health insurance from a carrier that has chosen not to offer products within the Obamacare exchanges. Most carriers have chosen not to do so. You will still be able to purchase coverage outside the exchange on a guaranteed issue basis without regard to preexisting conditions during the aforementioned national Open Enrollment period. You would simply purchase your coverage inside a private exchange. To see what a private exchange looks like click here. I have had that private exchange linked to my health insurance brokerage site for many years now. Long before Obamacare. It provides multiple comparison products and premiums from multiple carriers and it is available to consumers in all 50 states.
The reasons why those with income levels above $45,960 individual and $94,200 for a family of four should purchase health insurance outside the Obamacare exchanges are twofold. They are as follows:
#1) The PPACA (Obamacare) law states that it is an option for insurance carriers to offer products within an Obamacare exchange. In the state of Illinois, only 5 out of 16 carriers have decided to offer products inside Illinois’ Obamacare exchange. The other 11 carriers made the decision to stay out of the exchanges because by staying out, they retain the ability to design products that are different in design than those offered inside the exchanges. For example, only young people under the age of 30 can purchase a low cost, high deductible “Catastrophic” plan inside the exchanges. Outside the exchanges, everyone can purchase a low cost, high deductible “Catastrophic” plan. Regardless of their age and better yet they can tie a tax deductible, tax deferred, interest bearing HSA – Health Savings Account – to it.
In other words, so long as a carrier chooses not to offer any plan inside the Obamacare exchanges. They retain the ability to offer more attractively priced plans outside of the exchanges in a private exchange. If they decide to offer just one plan inside the Obamacare exchanges then all plans they sell outside of the Obamacare exchanges must conform or “metalize“ to the ‘metal‘ plans offered inside the Obamacare exchanges. This of course will drive up the costs of all of their plans exponentially.
2.) Because carriers who do not offer products inside the Obamacare exchanges retain some level of control in the design of products they offer outside of the Obamacare exchanges. It behooves consumers above the aforementioned MAGI levels to purchase those plans instead. For those plans will be priced lower and in the majority of states, much lower.
July 5, 2013 UPDATE: Well that didn’t take long. On the eve of the same day I wrote this piece. HHS published yet another ‘new rule’ that states they will no longer require you to prove your income OR if you have employer sponsored health insurance in order to get APTX – Advance Premium Tax Credits to artificially lower the expensive health insurance in the Obamacare exchanges. Instead, applicants will answer those questions on the ‘honor system’. Of course, if you report the wrong income levels on your Obamacare application, you will be subject to fines of up to $25,000 and you’ll owe the IRS on the following year. This makes Obamacare ripe for fraud and will massively increase the CBO’s projected costs for this legislation.
July 30, 2013 UPDATE: “APTX” subsidies provide yet another perverse incentive from the federal government to work less. If you work more you will most likely lose your subsidy which will be so significant in many cases that the worker would have to work a lot more to make up for the lost subsidy. CNBC goes into great detail on this here.