The Fun Accelerates
If you haven’t read our previous post on “Obamacare Basics”, do that first. Here’s further information that has come out since that was written:
1. As some recent commentaries have pointed out, a lot of controversy over Obamacare is a bit overblown, because on average, only about 16% of the population will be affected at all. See the previous post as to why.
2. MICHIGAN RATES HAVE BEEN ANNOUNCED! As always, nothing is easy when it comes to any of this stuff. However, after some trial and error with a website we’ll tell you about below, we can estimate the following for a silver plan, which is set up to cover 70% of your medical expenses:
A single, 30 year old with a $30,000 income will see an average premium of $289 a month. AFTER the Federal subsidy, the exact amount depending on the company he goes with.
An example for a client: a 46 year old single non-smoker, with a $25,000 income will pay an average of $236 a month after subsidy, which would vary with the specific company selected. Note that this rate is a bit less than the first example; with a lower income, he gets a higher subsidy.
Factoring in the subsidy, a family of four, with two parents in their 40’s and an income of $60,000, will pay an average of $690 a month out of pocket, and could lower that by shopping among plans.
The numbers just shown come from the “insurance cost estimator”, which you can find by going to the official state website, Michigan.gov, and then using the link to the Department of Insurance and Financial Services (DIFS). As you’ll see, it makes a difference what county you’re in, and if you care to check it out, you’ll see that the differences are surprising. Age and whether or not you smoke (though the Michigan estimator doesn’t ask about that) are also factors that Obamacare still allows the insurance companies to take into account in setting rates. Remember that many people will qualify for a subsidy, to help pay the premiums. See the previous post for basics as to that. According to a recent NPR program covering the “exchanges”, even in the group that qualifies for subsides, people will still be expected to pay between 2% (lower income) and 9% (higher income) of their total income for health insurance. Those with a really low income will qualify for Medicaid, which is essentially free, (and if you are in fact eligible for Medicaid, it’s mandatory that you take it; the exchange won’t sell you insurance even if you want it). Remember also that those on Medicare are NOT affected by Obamacare, though it’s appearing there are scammers out there trying to tell people differently in order to get their personal information.
3. There’s also now a Michigan Obamacare-specific website, michigan.gov.HICAP though at this writing, they don’t appear to be keeping it current.
4. The system is going to be set up to take applications on-line, but old fogies like this writer can get a paper application by calling 1-800-318-2596. It’s going to be interesting to see how long and complicated the actual application turns out to be; some press reports indicated that it originally started out at 15 pages, but supposedly they’ve been trying to cut that down.
5. I was horrified when it appeared there might have been a serious error in the original post, but not so in actuality. We said before that if you qualified for the subsidy, the money would go direct to the insurance company, whereas many recent press reports have called it a “tax credit”. Ironically, both are right, by reason of a process that could only have been created in Washington. Pay close attention now: For those who qualify, there will indeed be a “Premium Tax Credit”, but you can have an “advance credit payment” applied DIRECTLY to your premium each month, so the prior post was correct in that respect. (The mechanics of that will be interesting, particularly the determination of the amount of the credit). At the end of the year, you’ll reconcile everything on your income tax return, and if you haven’t used all the credit you’re entitled to, you can apply the balance against your income tax; if you’ve used too much, you’ll pay the difference as extra tax. Got that? All of this is from the federal website, healthcare.gov, a presumably reliable source.
6. As you may know from the media, the Michigan authorities have now decided to opt in for the Obamacare expanded Medicaid, though that won’t take effect until about Easter, 2014. Those with INCOMES below 133% of poverty level will now be able to apply for Michigan Medicaid, and get coverage for up to 4 years.
7. Through a combination of deductibles and copays, the Obamacare bronze plan (the minimum coverage allowed by Obamacare) will cover about 60% of medical costs. The silver plan, which most people are expected to choose, will cover 70%, the gold 80% and the platinum 90%.
8. For what it’s worth, the “partnership” between Michigan and the Feds to operate the insurance “exchange” didn’t come to fruition, so the Feds will be actually running the Michigan “exchange”. To the consumer, it may not make that much difference who is running it.
9. In another Mystery of Washington, the government shutdown, while it lasts, won’t affect the Obamacare rollout much, because they somehow took it “off budget” when they passed the original legislation, and it’s self-financing.
John T. Svendsen