OMG ... I need Health Insurance! How am I going to pay for that?

Are you feeling stressed out by all the TV coverage and news articles telling you how bad the new health insurance rules are or how great they are depending on who you talk to?  Exchanges, subsidies and penalties oh my!

 

Take a deep breath, its going to be okay.  I'll give you the basics for free!  I am licensed in Indiana so I'm going to talk about the set up here, if you are in a different state you will need to talk with someone in that state to be sure how it will work for you.  Are you ready?  Here we go!

 

First if you have a policy and you've not gotten a cancelation notice it means for now your current policy and network will remain the same.  You can keep it for a year and maybe longer, but that is not set in stone.  If you have a policy and have received a cancelation notice, it means your policy must be changed to comply with the new law and it was not grandfathered in for some reason.  You will need to get a new ACA policy (ACA stands fro the Affordable Care Act, which is a misnomer because it doesn't make coverage more affordable it just gives subsidies for those that make less money).

 

In Indiana you have 5 basic choices depending on your age situation and income.  I'll run through the first three quickly because they are very limited choices.

 

1. Medicaid - If you qualify for Medicaid it satisfies the ACA requirements.

2. Employer plans - If your employer has a group plan available to you that costs less than

    9.5% of your income then you need to stay with it.

3. CHIP - This is for children of lower income families that don't qualify Medicaid.

 

Okay so for the other two options ... you can buy an individual plan through an insurance company direct or you can buy the same plan from the federally facilitated marketplace (commonly called the exchange).  Both plans could offer identical coverage but there are two very noteworthy differences.

 

1. Plans purchased through the exchange will most likely have a much smaller network than those purchased directly from the insurance company.  So you may not get to use your current doctors or hospitals.

2. Plans purchased through the exchange may qualify for a federal subsidy to offset the cost of the insurance.  Plans bought directly from the insurance company are not qualified for a subsidy.

 

The bottom line is that the law is requiring you to get some basic health coverage.  If you are at or below the poverty line you will have access to Medicaid, and if you make above the poverty line (up to 400% of that amount) you may qualify for a subsidy that can pay for most or part of your health insurance costs, but if you choose either of these options you'll just have a limited number of options for doctors and hospitals.

 

You can make an appointment with me to go over your options but do it quick, because you only have a small window to enroll before you'll be forced into a higher cost option while waiting on open enrollment.

 

Contact me about health insurance here!

 

Jason

Social Security's Dirty Little Secret

We all know that Social Security has some major flaws but most folks don't know about the widow blackout period.  This is a slap in the face for the surviving spouses of life long contributors to the Social Security system, but it's also the government's dirty little secret.

Let's say that you are a woman, and your husband works as the sole bread winner while you raise the children.  You get married at 23 have 3 kids over the next 6 years and when your youngest turns 16 your husband dies from a surprise heart attack.

After grieving for the loss you apply for survivor's benefits from social security (because he paid in for 22 years and made a good living during those years) but instead of a check you get told that you have to wait 15 years until you are 60 to draw out his your benefits. 

So there you are with 2 kids in college and one in high school little or no work experience and no income coming in from your husbands lifetime of contributions!  I don't know about you, but I would say that sucks!  This system increases a woman's chance of living in poverty from 5% to 20% just because of the death of her husband.

What do you do?  Well, the only thing you can do is to plan a head and make sure that you have something in place to bridge the gap.  One plan that can be put in place is to take out a life insurance policy that will fill that gap until social security survivor benefits would kick in.  You will need to decide how much coverage you need by taking the average Social Security payment that the working spouse would receive at full retirement age and multiple it by the number of years until surviving spouse turns age 60.  For Example a man that earns $4,000 a month dies when his wife is 50 and they have no children under the age of 18, his Social Security payment at full retirement age would have been $1721 a month or $20,652 a year.   His widow would need $206,520 to make up for the loss of Social Security benefits during the next 10 years until she reaches age 60 and can begin drawing survivor benefits.

If you don't know what your working spouse's Social Security benefits would be you can go to the SSA's website and use their quick calculator to find that amount out.  Here is a link to their basic calculator http://www.ssa.gov/OACT/quickcalc/index.html  Once you have that amount you can multiple it by the number of years until your 60th birthday ... then call your insurance agent for a quote on an inexpensive term policy that will protect you until then.

J