Many people are wondering what the Affordable Care Act means for their retirement. If you’re older than 65 and on Medicare, then there are no major changes for you to stress yourself out about. But the Affordable Care Act offers important new options for people who aren’t old enough or eligible for Medicare. Whether it’s because of affordability or pre-existing conditions, older adults have previously had trouble finding affordable insurance for themselves.
That changes with the Affordable Care Act, being that insurers aren’t allowed to turn anyone down for pre-existing conditions. Also, the law puts a floor underneath the benefits that policies have to provide. Premiums will also be affordable if you qualify for the law’s sliding-scale tax credits and subsidies. With that said, here’s a look at some of the major points of the Affordable Care Act and how it’ll affect retirees.
Obamacare or Medicare?
There’s been confusion about which exchanges retirees are supposed to use. To put it as simply as possible: if you’re enrolled in Medicare Part A (hospitalization), you don’t need to enroll on the exchange to meet the Obamacare’s insurance coverage mandates. It can actually be illegal for anyone who knows that you’re already covered by Medicare to try to sell you a policy on the exchange.
Medicare Advantage and prescription-drug plans aren’t available to retirees on the Obamacare exchanges. If you have one of these plans already, it’s a smart idea to re-shop your coverage every few years using the Medicare Plan Finder. If you’re retired but are too young for Medicare coverage or don’t meet the program’s requirements, the Affordable Care Act exchanges offer you’re a new opportunity to receive coverage.
Medicare Enrollment 2014
Although many people have worried that Obamacare would increase prescription-drug costs, the average Medicare prescription-drug plan premiums won’t increase in 2014. On average, they’re projected to remain at about $30 per month. This doesn’t include individual plans, where big changes may still be possible. To make sure you’re fully aware of any changes, be sure to take a detailed look at your plan, even if you’ve been satisfied.
Shopping on the New Insurance Exchange
Depending on your income, you may qualify for tax credits and subsidies; although, they’re only available to you through your state’s official exchange. Some states are running exchanges, and the federal government will offer one where they aren’t available. You can find your state’s official exchange by visiting the federal government portal on health reform. Simply input your zip code and the site will direct you to the right federal or state exchange website.
If you’re not eligible for credits or subsidies, you’ll want to shop unofficial exchanges that are required to meet a lot of the same regulatory requirements as the policies offered on the official exchanges. Be careful though, being that the federal government is warning people to be cautious of con arts who will solicit personal information and money for policies.
Insurance Options and Coverage Costs
You can choose between four levels of coverage: Bronze (lowest premiums), Silver, Gold, and Platinum (highest premiums). Plans that have higher premiums have lower out-of-pocket costs. On average, Bronze plans cover about 60 percent of enrollee costs, with the rest being covered by coinsurance and deductibles. Gold and platinum plans cover about 80 and 90 percent of the costs.
Insurance companies are allowed to set premiums up to three times higher for people who are older than 50. This is because of the applicant’s higher utilization of health care. Despite this fact, total premium costs for many will stay low because of tax credits and subsidies.
Differences Between New and Old Individual Insurance Plans
Of all the features in Obamacare, this one is the most confusing and least understood. Insurance policies that are sold on the exchanges must obey a set of rules. One of these rules states that insurance policies can’t turn you down for coverage because of a pre-existing condition. They also aren’t allowed to put lifetime limits on the dollar value of coverage and can’t rescind it. Deductibles are also limited.
Additionally, exchange administrators have the power to limit the number of plans that are offered an insurance company, keeping policy choices simple and understandable.
Health Benefits, Early Retirement, & Obamacare
Being that only 7 percent of private-sector employers offered their early retirees health benefits, it’s important that you have your finances in order if you plan to retire early. You can do this by making long-term investments in annuities and other market options. Use a Fisher Investments annuity calculator to make sure you’re set for your retirement and your finances are in line.
This is just the basic gist of what Obamacare means to retirees. Be sure to do your in-depth research so you’re not feeling lost and confused about what it means to you and your retirement.
About the Author
Benjamin Miller is a prolific freelance writer who has published articles covering most all niches. Aside from writing, which is his chief passion, he also loves football and playing out in the park with his two kids.