Healthcare Reform Questions?

Healthcare reform has caused a lot of questions to be asked over the last couple of years. One of the questions that we hear quite often is “When do I HAVE to buy health insurance?” Another way to frame that question for those who have had trouble getting coverage might be “When do I GET to buy health insurance?”

If you don’t have health insurance already through an employer or some other outlet, in the past, you could have purchased coverage any time you wanted to if you could qualify. That is all going to change.

Starting this year on Oct. 1st, the first annual open enrollment period began. The open enrollment period this year will be from Oct. 1 to March. 31st. In subsequent years open enrollment will mirror the Medicare open enrollment which is Oct. 15th to Dec. 7th. So as you can see, in subsequent years the window of opportunity will be much smaller than it is this year. That is significant for a number of reasons.

During open enrollment you do not have to answer health questions or satisfy any pre existing waiting periods. In fact, starting in 2014 you will not be able to purchase an individual health insurance policy any time, other than at open enrollment! The only exception to this rule is if you have what is being called a life event during the year. A life event is any significant change in your life such as birth or adoption of a child, marriage, divorce or any involuntary loss of coverage. These events will allow you to be able to buy coverage, but other than that you will not be able to, except during open enrollment. This is important because, barring any change from Washington; the individual mandate goes into effect Jan 1st of 2014. The mandate states that if you do not have coverage by Valentine’s Day then you will be subject to the penalty. The first year the penalty is $95.00 or 1% of your income, whichever is greater. The penalty increases substantially the second year and continues to increase every year thereafter.

Anther aspect of paying the penalty instead of buying insurance that is not being talked about is that if you get sick, you still don’t have insurance and will have to pay all your medical expenses out of pocket.

One advantage of shopping for individual health insurance through the public exchange is, if you qualify, you may receive a substantial subsidy that will decrease the amount you have to pay for coverage. This subsidy is based on income and can be quite generous. Other than that you will still have the private insurance market to shop for health coverage, but only during open enrollment.

As with any financial decision, you need a qualified professional to help you make the right decision for you.