Since the Covered California health exchange opened on October 1st, there have been 59,000 enrollments — 30,000 in October and 29,000 signed in November. This is less than 1% of the estimated 6 million Americans that are expected to purchase health coverage on the exchange. Many people worry about the success of the Affordable Care Act, especially since people’s plans were cancelled despite continued promises that Americans could keep their existing health plans.
This issue was addressed when insurers sent nearly 12 million Americans policy cancellation letters because their plans did not meet the Obamacare regulations. The health reform law “grandfathers” plans that were purchased before 2010. However, if the policies have changed since 2010, they must uphold the guidelines set in the Affordable Care Act.
After former President Clinton critiqued the rollout of the exchange, President Obama apologized for the many issues that have taken place not only with the healthcare.gov website errors but also with the discontinuation of the health plans. Clinton was defending the health care law as a whole, but revealed how broken promises regarding health coverage are damaging to individuals and society. He told a story of a man whose plan was cancelled because it didn’t meet the new requirements. the young man’s coverage was replaced with premiums twice as high as his existing plan, and he wouldn’t see any savings unless he was sick. The white house is struggling to repair issues similar to this while strategizing ways to improve attitudes towards the new law.
There are two taxes associated with the Affordable Care Act that all individuals and families should be aware of. The first is for individuals earning $200,000/year and the second is for married couples or joint filers earning a combined income of $250,000/year.
These taxes are known as a “Medicare surtax” that applies to earned income only. Thus, it will not apply to income received from investments. Typically, 1.45% is deducted from each paycheck to pay for Medicare. However, this tax increases that value by 0.9% but only to people earning over $200,000 or more. Once your cummulative income reaches $200,000, your employer will implement the surtax and your Medicare surtax rate will increase to 2.35% for the rest of the year.
Harris Abrams, a senior analyst with Thomson-Reuters, notes that the term wage is not limited to your gross income. “Fringe benefits, tips, third-party sick pay, the cost of group-term life insurance and amounts deferred under a nonqualified deferred compensation plan also have to be added in,” Gail Buckner – Fox Business.
*Important: Make sure you are not overpaying or underpaying.
This tax is applied by your employer when you hit $200,000 in income. However, if you’re married this tax does not apply to you until you reach $250,000 in combined income.
If you are married and your spouse is unemployed or earns under $50,000 then you will should not be taxed even if you make $200,000.
However, if you are married and you make under $200,000 and your spouse makes under $200,000 but your combined income is over $250,000, you are subject to the tax.
It is imperative to keep track of your income as well as your combined income (if married) so that you can estimate how much your taxes will be.
Click here for more information.
Despite the government shut down, the health exchanges did open to the public October 1, 2013. There were some initial glitches when the site went live most likely due to the unanticipated high volume of applicants. On the first day, there were 514,000 people that visited the Covered California website. However, unlike other critiques to the federal health exchange enrollment websites, California’s site did accomplish two key initiatives: the website allowed you to shop for health coverage while comparing prices and plans.
- People choosing to enroll in the California exchange are given four tiers of coverage to elect: platinum, gold, silver, and bronze. The platinum tier offers the most benefits for the highest price while the bronze tier provides less benefits for a lower cost. If you are interested in learning which type of coverage is right for you, learn more here.
Federal exchange sites are also experiencing some issues that need to be worked out as quickly as possible. “The limited ability to enroll consumers is becoming an increasing focus of Obamacare’s Republican foes, who say the government wasn’t ready to implement the law and should have delayed it,” according to Reuters. The federal exchange platform Healthcare.gov hopes to model their site after “successful” state exchanges like California and Connecticut.
For more information on Covered California and the current state of the enrollment process, click here.
While most Americans want life insurance, only 70% of households actually have it. According to the LIFE Foundation, 30% of US households do not have a life insurance policy. This means that 11 million fewer Americans are covered by life insurance than 6 years ago. In honor of Life Insurance Awareness Month, we believe it is important to be educated on the underlying values and benefits of owning a life insurance policy.
Why Buy Life Insurance:
- Life insurance is an extremely important purchase decision since it provides peace of mind and financial security to your family in case of an unexpected death or tragedy. It ensures that your family will not suffer a financial burden when preparing for the funeral, college funds, and day to day expenses. If you have a family, a spouse, or a person that depends on you financially, life insurance is most likely needed.
How Much Coverage Do You Need:
- The amount of coverage you need depends on a variety of factors. Typically, most people choose a coverage option that is 4-5 times their annual income. However, it is recommended that you select a policy that is 10-15 times your annual income so that the coverage will be able to fully take care of the ones who depend on you financially.
How to Calculate Coverage:
The LIFE Foundation uses this calculation to help you determine the amount of coverage your may need:
What Is Covered:
- A life insurance policy will cover the cost of a funeral, left over medical expenses, mortgage payments, car loans, taxes, credit card debt and a number of other payments. In addition, life insurance also covers ongoing expenses like food, housing, health care, clothing, insurance, college tuition, and retirement funds. This type of coverage will enable your family to live a similar lifestyle their are accustomed even after tragic event.
How Long Does The Coverage Last:
- There are different lengths of coverage available to purchase. Term life insurance protects you for 10, 20, or 30 years while permanent coverage lasts until death. Premiums for term life insurance tend to be less expensive than a permanent policy, however they may increase with age. Permanent policies are initially more expensive, but the costs level out over your lifetime so they tend to be less expensive over all and they do not increase. Term life insurance offers the highest death benefit at the lowest cost but permanent coverage offers lifelong protection and tax deferred savings.
Ask your insurance professional which type of coverage is right for you.
The federal government has invested $67 million dollars on hiring navigators to help enroll the 25-30 million uninsured Americans in the health exchange beginning October 1st. Uninsured Americans will have the option to purchase insurance through a navigator, a broker, or an online insurance exchange agency.
Health Reform Navigators:
- Navigators are individuals who have spent 30 hours completing an online training course to learn about the health exchange and the various subsidized plans. However, unlike insurance brokers who are able to offer advice and help personalize the decision making process, navigators will not be able to recommend health plans. The goal of this policy was to eliminate bias when selling health plans based on commission rates. Still, most individuals prefer the advice of a broker or agent who has experience with the different insurance carriers and has a better understanding of matching health plans for specific health needs.
Calling a Broker for Advice is Free!
- It is important for people to understand that broker services do not cost extra money. The cost of a health plan remains the same whether you enroll through a broker or through the exchange. Brokers receive a commission from the insurance carrier of the plan they are selling not through any extra costs from you. So if you want advice, use your broker!
Online Insurance Exchange Agency
- Another alternative to purchasing health insurance on the exchange is through the 5 online health insurance agencies. These agencies are authorized to sell the federal government plans only in the 36 states operated by the government. The agencies include: eHealth, Towers Watson, HealthCompare, Getinsured, ConnectedHealth, GoHealth.
- eHealth is a complete online enrollment process where users are able to purchase insurance without any human interaction. A representative from eHealth claimed their goal was to become the Amazon.com of health insurance. eHealth and the other selected companies were chosen because they will provide an increased number of outlets for Americans to purchase insurance. More outlets means more Americans enrolled by January 1st. 2014 according to the Obama administration.
How to Find a Personalized Health Plan:
- Unfortunately, these online health insurance outlets will not be able to provide the human element of personalization many Americans seek. With the increasing number of health issues facing American families and the various levels of income, purchasing health insurance becomes a confusing process. Ultimately, people will want the advice of an agent who has a better understanding of the industry, the plans, and how to match personal needs to an affordable plan. Protect you and your family by getting the advice you need.