No Medicare, No Problem: Baby Boomers and The Affordable Care Act

This post is by Michael Cahill of the Vista Health Solutions Blog.

The term baby boomers covers a broad range of people born between the years 1946 and 1964, meaning that today in 2013 they could be anywhere between 49 and 67.

While some of this generation are either about to, or have, enrolled in Medicare, the vast majority haven’t. Chances are if you fall into the group without Medicare, you will want to take a look at the health insurance marketplaces offered by the Affordable Care Act (ACA).

The best thing you can do to benefit from this option is learn about on the basics of the law and the marketplace.

The Bad News: The Individual Mandate

The most groan inducing part of the ACA is probably the individual mandate, the provision stating that everyone needs to have health insurance. Some people can be exempt for any number of reasons, including low income, but by and large you will probably need to get insurance.

If you don’t get it, you will pay a penalty. In 2014 that penalty is 1% of your yearly income or $95 per person without insurance ($47.50 for children under 18). In 2015 it goes up to 2% of your income or $425 a person, and in 2016 it is 2.5% of your income or $695 a person. Beyond that these numbers are tied to inflation. The higher of these two possibilities is what you will be charged.

The Good News: Tax Subsidies

Now that you are done groaning, maybe the hope of a tax credit will let you breathe a sigh of relief. All marketplace plans have the possibility of a tax credit on them based on your household’s income. If you make in the broad range of 100% to 400% of the Federal Poverty Level, you can get a tax credit. For individuals this is around $10,000 to $40,000 a year, but the more people in the household, the bigger the monetary amount. To see what a tax credit might look like check out the Kaiser Family Foundation’s subsidy calculator.

Essential Health Benefits Round Plans Out

The essential health benefits (EHBs) are one of the main ways that the ACA intends to make plans better. They are ten general categories of benefits that every plan has to cover. The coverage provided by the EHBs is based on a benchmark plan for your state that works as a standard for the services covered by these benefits. Some of the EHBs include things like preventative care, ambulatory services and more.

The Medicaid Option

For people with a lower income and children, Medicaid has always been an option. Recently, some states have chosen to expand the program. Those states that have done so now allow single adults without children to get coverage. Additionally, it now covers those with an income up to 138% of the Federal Poverty Line. Check out this site to see if your state has expanded Medicaid.

Looking Towards The Future

While for some Medicare might be around the corner, some of you might be sticking with your new plan for some time. Calculate your current costs and take your time. The open enrollment period won’t be ending for a few months. Make sure to keep up with the news on this thing as well. Just about every single week there is some controversy with this law. It is entirely possible that some big changes could be made.

 

Michael Cahill is the Editor of the Vista Health Solutions Blog. He writes about the healthcare system, health insurance industry and the Affordable Care Act. Follow him on Twitter at @VistaHealthMike

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