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by Andy Millard

Andy Can Help

 

If you’d rather poke yourself in the eye than talk about health insurance, you’re not alone. But the conversation must be had, especially now.

The coronavirus could send any one of us to the doctor or hospital at any time, and unless you’re extremely rich or extremely poor, you’ll need health insurance to pay for that care. What’s more, the pandemic has cost millions of Americans their jobs as well as the health insurance that went with those jobs.

Where do Americans get health insurance? Those 65 and older (about 59 million Americans) are covered by Medicare. Military personnel and veterans (about 12 million total) are cared for by the Military Health System and Veterans Health Administration. Those who fall below the federal poverty level (about 72 million) are covered by Medicaid.

That leaves the rest of us with non-governmental health insurance—or in some cases, no insurance at all.

Around 159 million people get health insurance through their employer. Another 84 million buy individual policies from private companies. And 30 million Americans have no health insurance at all. (sources: U.S. government websites and Wikipedia)

Leaving aside what all this means for us as a nation, if you’re one of those folks with no health insurance, you need to address the situation now.

Your best bet is probably the ACA Marketplace. (ACA stands for the Affordable Care Act, commonly known as Obamacare.) Normally, you can apply for coverage only during the annual open enrollment period; the next one runs from November 1 through December 15. But if you’ve lost other coverage, moved, gotten married or had a baby, then you might be able to apply now. Here’s how:

Go to www.HealthCare.gov, select your state, and go from there. You’ll have to enter some personal information, including your estimated income for this year. Go ahead and do it. Depending on your income, you could qualify for a subsidy, which the website will factor into the premium price.

The only company offering ACA coverage throughout North Carolina is Blue Cross/Blue Shield. They have a variety of plans divided into three categories: Bronze (least expensive/most limited coverage), Silver and Gold (most expensive/best coverage).

As you shop the plans, consider any health conditions you have as well as any medications you’re taking. A more expensive plan with better coverage for your specific prescription could end up lowering your overall cost.

If you find yourself getting confused by the choices on the marketplace website, don’t hesitate to contact a licensed health insurance agent. It doesn’t cost any more to get a policy through an agent than it does to buy directly on the website, and a good agent can be extremely helpful in this process.

Now let’s talk subsidies.

A single person whose 2020 income is between $12,760 and $49,960 qualifies for a subsidy, which translates to a lower premium. The income range for a 4-person household is $26,200 to $103,000. (sources: hhs.gov and healthinsurance.org)

The lower your income, the greater the subsidy—up to a point. In North Carolina, a single person with an income below about $5,100 would qualify for Medicaid. But if your income falls between $5,100 and $12,760, you don’t qualify for either Medicaid or an Obamacare subsidy, because North Carolina is one of 12 states that have opted out of expanded Medicaid coverage available through the Affordable Care Act. (source: KFF.org) The vast majority of these folks have no health coverage at all.

Outside of the exchange, your options are limited. You could shop for a non-Obamacare policy, but the pickings are very slim in North Carolina. You could shop for short-term medical insurance, commonly referred to as STM. STM plans are often inexpensive, but they don’t cover pre-existing conditions and offer little to no coverage for prescription drugs. The plan can last for 1 to 36 months, after which you’d need to shop for a new plan. But if you can’t apply for an Obamacare plan until the next open enrollment, you should get a short-term plan to carry you through this year.

Then there are cost-sharing ministries. These are not insurance at all but rather faith-based programs where the members chip in to share one another’s medical expenses. Benefits are quite limited, meaning you could still be exposed to crippling expenses.

Your best bet almost always is to buy a plan from the ACA marketplace. If you find a plan outside the marketplace that looks too good to be true, you can bet it is.

And if, after reading this, you’re wanting to give yourself that poke in the eye, wait until you get your health insurance squared away. You’re gonna need it.

Special thanks to Cooper Flack of Main Street Insurance Group for providing information and background for today’s column.

Andy Millard, CFP® is a retired financial planner. He does not offer financial planning services; this column is not intended as advice but rather education, commentary and opinion. Consult a professional advisor. If you have general questions about financial planning or investments, feel free to submit them to Andy at camillard@mac.com.