Government Insurance

Depending on who you are, where you live, your status, and income, you may be eligible for government insurance. The Patient Protection and Affordable Care Act, commonly referred to as Obamacare, refers to a kind of regulated marketplace where insurance plans are sold to the general public. For most people today, insurance coverage is now mandatory, and the Obamacare plans are what people must choose if they are not otherwise covered by another plan.

The federal government also offers three other insurance-type plans for eligible people: Medicare, Medicaid, and CHIP.

Medicare has been around since 1966, and is a form of insurance offered to anyone over the age of 65. Although Medicare is administered through the government, the actual coverage is provided through a network of about 30 private companies. Medicare is further subdivided into four categories: A, B, C, and D, which refer to which kinds of healthcare are provided.

Medicaid is a form of government health insurance that is available for people with very low incomes, or who qualify due to other circumstances like disabilities or being a pregnant woman. Unlike Medicare, Medicaid is jointly administered and funded by both the federal government and the state government where the person resides.

CHIP (Children’s Health Insurance Plan) is a form of insurance coverage offered to otherwise uninsured children, and to families with otherwise uninsured children. Formerly administered at the state level, since 1997, CHIP is now a jointly operated federal and state program similar to Medicaid.

There are strict rules about when, and for how long, a person can enroll in or be eligible for government insurance plans.

Commercial Insurance

Any kind of insurance coverage not offered or administered by the government is a form of commercial insurance. Private, for-profit companies sell these plans to eligible customers for a monthly fee known as a premium. Generally speaking, most commercial insurance plans fall into the following categories:

• HMO – Healthcare is coordinated through a primary care physician, and treatment centers and providers are grouped into a network.
• PPO – The customer chooses where to get treatment, with treatment inside the network being significantly cheaper than treatment received outside the network.
• EPO – The customer chooses where to get treatment, but usually has to pay full price (out of pocket) for any treatment received outside the coverage network.

Most commercial insurance plans can be bought at any time, and a person can opt out of continuing coverage whenever they want.

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When it comes to choosing health insurance plans, one of the most important things to consider is the deductible. With any insurance policy, a deductible is the amount you must pay out of pocket before the insurance provider will pay for anything. While not every insurance plan includes deductibles, more than 80% of them do, so knowing which one is right for you is important. Many insurance plans are categorized by having a low deductible, meaning you only pay a little before the insurer begins to play, or a high deductible, which can be quite substantial. But because the premiums (costs) of high deductible insurance plans are lower, it can be a wise choice for some people.

The Benefits of a High Deductible Plan

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What is HMO insurance?

Starting in the 1970s, the Health Maintenance Organization (HMO) began offering health coverage based on an in-house network of providers.

Essentially, what makes an HMO unique is that you start by choosing a primary care physician (PCP), usually a general practitioner. Everything else, outside of emergencies, goes through that doctor. For instance, if you develop a rash, first you visit your PCP and then get a referral to an in-network dermatologist.

With most HMO plans, health services for women such as a visit to the obstetrician or gynecologist is also provided without first needing to get a referral from your PCP.

HMO plans are usually the most comprehensive insurance plans today, as your doctor has a wider range of care specialists to which you can be referred for treatment. In general, HMO plans have a higher premium than EPO or PPO plans, but are quite popular because all of your healthcare is coordinated through a single individual.

Approximately 40% of insurance plans today are HMOs.

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Dates

Although the changes will take place effective for 2016, there are a number of important dates that start in 2015.

• November 1, 2015 – The beginning of Open Enrollment for 2016. Coverage will begin on January 1, 2016.
• December 15, 2015 – The last day to enroll or change your plan for coverage beginning on January 1, 2016.
• January 1, 2016 – Coverage begins for people who enrolled or changed their plans between Nov 1 and Dec 15, 2015
• December 16, 2015 – Any enrollment or changes will take effect February 1, 2016
• January 15, 2016 – The last day to enroll or change a plan, with coverage beginning on February 1, 2016
• January 16-January 31, 2016 – Enrollments or changes in this period will take effect beginning on March 1, 2016
• January 31, 2016 – The last day of Open Enrollment for coverage in the year 2016.

Anyone who fails to enroll by January 31 will be ineligible for coverage unless they qualify for a Special Enrollment Period.

Note: There are no restrictions as to when you can enroll in Medicaid or CHIP (Children’s Health Insurance Program). Applications are accepted at any time.

Special Enrollment Period

People who have undergone certain major life changes may be eligible to enroll in Obamacare outside of the normal enrollment periods. A Special Enrollment Period gives you 60 days from the event in which to enroll or change your plan.

You may qualify for a Special Enrollment Period:

• If you get married
• When you have a baby
• If you lose a member of your household
• If you gain a member in your household
• You lost your health coverage

Note: you must report these life changes to the Marketplace to qualify for a Special Enrollment Period

Note: if you get hired on at a new job, you have 30 days to enroll in a plan.

Non-Enrollment Penalties

If you do not have any health coverage for 2016, you will be required to pay a fee to the government. This is determined by whichever of the following is the highest:

Either:

1. 2.5% of your yearly household income (as long as you exceed the filing threshold, which is about $10,000 per individual adult); OR
2. $695 per adult, or $347.50 per child under the age of 18.

The maximum fine assessed will be:

1. The national average premium for a Bronze plan; OR
2. $2,085 per family

Note: certain hardship exemptions exist for people who don’t have health insurance. These include:

• Being homeless
• Being evicted from your home in the past 6 months
• Receiving a shut-off notice from a utility company
• Being the victim of domestic violence
• The death of a close family member
• Surviving a fire, flood, or disaster that caused substantial damage to your property
• A bankruptcy in the past 6 months
• Unpaid medical expenses from the previous 24 months that resulted in substantial debt
• Increased necessary expenses for providing care for a family member
• Your state failed to expand eligibility for Medicaid, and you were determined ineligible for Medicaid
• Your individual insurance plan was cancelled

Note: hardship exemptions are temporary, and usually only cover the month previous to, the month after, and the duration of the hardship. You must contact the Marketplace in order to qualify for a hardship exemption.

Being Unemployed

No one is automatically exempted from the requirement to obtain health insurance just because they are unemployed. If you are unemployed but do not obtain health insurance, you will be fined.

However, certain people with low (or no) income may qualify for an exemption.

Catastrophic Coverage

If you successfully qualify for a hardship exemption, you will be able to obtain a catastrophic coverage plan regardless of your age or income. This will protect you from certain medical costs. If you qualify for a hardship exemption, you’ll be given an Exemption Certificate Number (ECN) to use when buying the plan from an insurance company.

Premium Prices

Currently, 37 states are participating in the federal Obamacare Marketplace. While prices vary from state to state, the latest figures estimate that premium prices will rise 7.5% across the board for the year 2016.

The changes, however, vary widely from certain states and metropolitan areas. Recently published figures show that residents and Oklahoma and Montana will see their premiums rise as much as 35%, while residents of Indiana will benefit from a 13% drop in prices.

Many of the other 13 states rely on separate ACA insurance marketplaces, with premiums expected to rise a modest 2% on average.

Government press releases emphasize that approximately 90% of people enrolling in an Obamacare plan are eligible for tax credits, which will reduce their total cost.

Mandatory Employer Participation in Obamacare

After being delayed for years, the Employer Shared Responsibility provision of Obamacare will finally take effect in 2016. The regulations require that any company with 50 or more full-time employees must offer their workers and dependent children affordable insurance coverage or face substantial financial penalties.

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