Financial Health

Making Your Way Through the Health Care Maze

Solving your health care needs in an ever-changing insurance marketplace can be daunting. But new options though the Affordable Care Act (ACA), also known as “Obamacare,” may be easier and more affordable than you might think.    

Steady talked to veterans of the process to gather advice for first-timers. They weren’t all fans, but did say signing up is more simple than it used to be.

For the part-timers, contingent workers and freelancers who make up the 1099 community, once it’s clear going without insurance is financial roulette, ACA often is the best option.

Even if you miss the open-enrollment period (which ends Dec. 15 in most states), you can buy in at any time if your life has changed significantly (think moves, job loss, marriage or the birth of a child). See details here.

And, if your income drops, you might qualify for state subsidies that can reduce your cost by 75 percent.

That’s part of the reason this growing, non-traditional workforce embraces ACA.

Even with price hikes, 6.5 million people renewed ACA coverage for 2018 and 2.5 million new buyers opted in. That’s 9 million people, even after measures that shorten the open-enrollment window and slash advertising to remind people when to sign up.

Premiums for 2019 are going up, but less than the historic average.

Expect your outlay for health care to rise – every year.

Since the 1960s, the average cost of health care has jumped 10 percent every year, as reported  by the Centers for Medicare and Medicaid Services.

It’s a familiar headache for independent contractors who’ve transitioned from staff positions: health insurance is a significant and uncontrollable out-of-pocket expense. The good news is, that in recent years, premium increases have edged slightly downward.

Frank Lovece, age 60, has been self employed for most of his career. He says new health insurance options arrived just in time for him and his wife. “Before the ACA, I used the freelancers union insurance and that went up to a point where I didn’t think I could afford it,” he says.

Other than an eight-year stint as a web editor for a multi-national magazine publisher in New York, Lovece has been a freelance editor and writer most of his life. His wife is also a self-employed writer who runs a small press.

After his first year buying through ACA, Lovece downgraded his policy from “gold” to “silver.” The consequence is that his deductibles and out-of-pocket expenses have gone up. His 2018 monthly premium was $900 and will rise to more than $1,014 in the coming year.

While he has occasionally qualified for a state subsidy, he cautions that if your income bounces back, you’ll have to repay the state, triggering a financial scramble come tax-time.

To avoid a big year-end hit, keep on top of your state exchange’s income reporting requirement. If your income increases, make sure you notify the agency.

Despite the hassle, the one-time Marvel Comic writer (Atomic Age) says he’d rather pay that cost than risk ruin.  “It is still cheaper, significantly, even without the subsidy, to buy it through the ACA than to buy it on the open market,” Lovece said. “I don’t believe we could afford health insurance if it weren’t for the ACA.”

72-year-old Emran Ahmad, a retired pharmacist from Merrick, New York, qualifies for Medicare. But his wife is not yet eligible, so he buys her health insurance through ACA.

Ahmad urges others not to be scared off by horror stories about the ACA online system. “That was horrible until this year,” he says, noting there was no easy way to compare prices and benefits of each option.

Now, he says, the website makes it easier to understand the tradeoffs between platinum, silver, bronze and other ACA-approved plans.

Detail-oriented, and with time to conduct a careful comparison, he focuses on out-of-pocket costs, referral fees and premiums. He found the next-lower plan would cost his family about the same as the mid-range plan when he looked at expected outlays.

The Ahmads don’t qualify for subsidies and their monthly premium will rise to $1,400 in 2019. That’s far from the largest premium increase he has absorbed over the years, so he is satisfied for now.

He counsels current ACA users not to simply renew, but to check carefully for changes.

Ahmad worries that politics have undone the careful balancing of patient and health care industry interests by getting rid of fines for people who don’t have health insurance. When injured or sick, they still get health care, but the costs are borne by everyone else.

Forcing everyone to buy a policy made insurance less expensive overall and spread the cost of care, but the current Administration eliminated the penalty.

That suits Zach Lazzari, 34, a self-employed Montana fishing guide and freelance travel writer.

Lazzari grew up with good health insurance and in 2017 had a traditional full-time job with health insurance. He had gone on the ACA exchange in 2016 and bought a policy, but found he only went to the doctor for the required annual checkup.

So, when he left his office job to become self-employed again, he decided to pay the penalty instead of the more expensive premiums. His health is good, but as a fishing guide, he works in remote, whitewater canyons doing hard physical labor. “I try not to think about it,” he says of the risk.

Next year, he’ll do without, again.

If enrollment continues to rise, it may be difficult for lawmakers to ignore non-traditional workers who part with hard-earned cash for coverage. With multiple jobs and little employer-provided health care, these workers will soon be about half of the U.S. workforce. Mess with their health insurance and you might not be electable.

Whatever the politics, workers shopping for a policy through the ACA exchange have some studying to do.

Changes to watch for

  1. You have less time to enroll than in years past: just 45 days in most of the 39 states that participate. (Seven states decided to extend the open enrollment period. Check the deadline if you live in California, Colorado, Massachusetts, Minnesota, New York, Rhode Island or Washington, D.C.)
  2. You are mostly on your own. The government has drastically cut the funding for “navigator” programs that nonprofits use to help people with the enrollment process.
  3. Not all plans meet the original ACA standards. The government eased restrictions on insurance companies to permit them to offer “short-term insurance” options. They are cheaper, but cover the bare minimum and exclude some pre-existing conditions, including pregnancy.