Best Ways To Save: Seniors and Obamacare

Best Ways To Save: Seniors and Obamacare

Does the Start of Obamacare Affect Me?

Q: I'm confused about the new health insurance requirements under Obamacare. When does it start and how does it affect seniors? I'm 62 and still working. I don't have insurance. My husband is 65 and started Medicare a few months ago.

A: Seniors like your husband who are 65 and older, and enrolled in Medicare, are not affected by the new health insurance coverage requirements that become effective January 1, 2014. But big changes are coming to health insurance coverage for about 62 million seniors age 50 through 64 who are not yet enrolled in Medicare.

Starting January 1, 2014, all Americans are required to have health insurance. People who can afford it, but don't purchase health insurance by that date, may have to pay a fee, and must also pay the entire cost of all medical care they may later require. The fee in 2014 is 1% of your yearly income, or $95 per person for the year, whichever is higher and that fee increases every year. By 2016, it is 2.5% of income, or $695 per person, whichever is higher.

To avoid the fee in 2014, you need insurance that qualifies as minimal essential coverage. If affordable insurance is not available through your employer, you can shop for health insurance through your new state health insurance exchange, or market place. Middle to low income people who buy coverage through the exchanges will also get government subsidies in the form of advance refundable tax credits to help pay the premiums. These tax credits are only available if you buy coverage through the exchange. You aren't supposed to get the subsidy if you have an offer of insurance from your employer that meets the standards. You qualify for the subsidy if your income is less than 400% of the federal poverty level. So the qualification level is about $46,000 or less for an individual and $94,000 or less for a family of four in 2013.

New rules prohibit insurers from rejecting applicants with pre-existing health problems or charging you more based on your health history. The law also sets limits on how much insurers may charge older buyers. Premiums for a 64-year-old can be no more than three times as much as they are for a 21-year-old. However, concerns are widespread that insurance costs could still be challenging for many seniors.

Open enrollment for the exchanges begins October 1, 2013 for coverage starting January 1, 2014. To learn more, visit the new website. To get an idea about whether you qualify for a government subsidy visit the Kaiser Family Foundation's Subsidy Calculator.