Ask the Medicare Specialist

There is no question today because I want to address some very significant announcements regarding the Affordable Care Act (ACA), aka Obamacare.

These changes are going to be very fruitful for many in the middle class, especially those in their late 50’s and early 60’s who aren’t currently receiving premiums subsidies. There are people in this demographic that will have their premiums reduced by as much as $5,000 per year. Those who are currently receiving subsidies are also going to benefit as they will soon be increased.

Since the ACA’s inception, any individual or family household whose income was over 400% of the Federal Poverty Level was not able to receive premium subsidies and had to pay full cost for health insurance either through the Marketplace or directly from an insurance company. Soon, there will be no income cap that alone would eliminate getting premium assistance. When the new regulations go into effect, anyone applying for health insurance on the Federal or a State based health insurance exchange, such as Pennie that is now being utilized in Pennsylvania, will not pay more than 8.5% of their Modified Adjusted Gross Income (MAGI) in premiums. Any amount over the 8.5% will be subsidized.

For example, today, an Allegheny County couple in their early 60’s who makes $75,000, gets no subsidy and is paying $1,500/month for the most popular Gold Plan on the market. With the new regulations, their premium would be reduced to $531/month, over $10,000 per year in savings!

This is some of the best news we’ve had regarding health insurance that I can remember. I’ve always had issues with the ACA, but one of my biggest complaints was it left out the hard-working middle class with the 400% income cap. That issue has now been eliminated. The $531 cost for the married couple example is actually less than what they would have paid for the most popular individual health insurance plan in 2013, pre-ACA. And unlike 2013 and earlier, there are no pre-existing condition clauses with ACA plans.

I can’t tell you how many people we’ve met in the last few years who wanted to retire pre-Medicare age (65), but couldn’t afford to due to the cost of health insurance. That’s not going to be the case for many of those same folks and I can’t wait to give them the good news. Unfortunately, we don’t know when the lower premiums will go into effect and haven’t been given a timeline. However, there’ still action many will want to take prior to it happening. Most of those who bought individual health insurance plans directly from Highmark or UPMC because they didn’t qualify for premium subsidies are probably going to want to apply for a Marketplace plan as soon as possible because policies purchased outside the state or federal marketplaces will not be eligible for reduced premiums. They also can’t be transferred to the marketplace. Those directly purchased policies will need to be cancelled and a new one started in its place. New plans should be made effective as soon as possible to eliminate the possibility of meeting part or all of one’s deductible twice. We’re also are not sure how much subsidies will be increased for those already receiving them. However, after doing a bit of research it appears many will pay $70 to $80 less per month when the new subsidies go into effect. Those who currently have Marketplace plans will get the reduction automatically. If you would like to become our client, have The Health Insurance Store to become your agency of record, and be able to receive assistance from our staff with any issues that may arise in the future, you can now make that request, even if we didn’t help you when you originally applied. Give one of our offices a call and we can guide you through that simple process.

There is some other interesting and important news for those who may lose their jobs in 2021. It appears anyone who has received or will receive unemployment this year will be eligible for the maximum allowable subsidy, the same as someone who makes just 138% of the poverty level. He or she would also be eligible for what is known as Cost Sharing Reduction (CSR) which significantly lowers deductibles, co-pays, and the annual Maximum Out of Pocket medical costs. Please excuse me for not knowing all the details as we literally were just given information on this topic only hours before my deadline for the column. I’m sure we will learn more soon. But, as of now I’m not certain if someone who has been or will be unemployed will get to keep the lower premiums all year, even if they go back to work and begin earning more money, or if the reduced rate and medical costs will only be available while on unemployment. The way I’ve seen it worded; I’m betting on the former, which would be another boon for many consumers of Marketplace health insurance.

I have one more extremely important message for Western Pennsylvanians who don’t get health insurance through their employer, have bought it on their own, or are considering purchasing a plan. If you don’t have or get a plan offered by either Highmark or UPMC, you are not buying Major Medical health insurance as you know it. Any company selling individual plans that isn’t named UPMC or Highmark is offering indemnity plans that don’t limit what you can be billed for medical expenses. Only Major Medical health insurance does that. Again, in Western PA, there are only two companies offering individual Major Medial, Highmark and UPMC. My agency does not and will not sell Indemnity Plans that could result in people owing tens of thousands of dollars in medical bills or leave them without much needed care or medications when needed the most.

Any of the licensed agents at The Health Insurance Store can help determine what your premium will be with the new subsidies and advise those who may have bought an Indemnity Plan or purchased a policy directly from UPMC or Highmark what their best options are. We can help with the Marketplace application and also recommend the best plan for your situation. The enrollment period is still open and will be until May 15th. However, it’s not wise to wait until the last minute for several reasons. With questions, or to set up an appointment for a no cost consultation, please reach out to one of our offices or email me personally.