Navigating Health Insurance Change – Part 2

Insurance Agent Office

Insurance Agent Office

LAKE MACBRIDE— While gaining an understanding of how the health insurance exchanges may change our family budget, I decided to wait until the government worked through the initial computer problems evident at the start-up of open enrollment. Last night, the glitches seemed resolved.

I logged on to healthcare.gov, created an account, applied, determined eligibility to choose a plan from the market place, live chatted with an agent who offered to have a specialist call me within 48 hours, and was ready to hit enroll on a plan (I didn’t) in less than 40 minutes. Given the challenges of the questions asked, the online experience met expectations.

When saying there were challenges, what I mean is  a projection of 2014 household income is required to complete the application. That may be easy for a wage worker in steady employment, but for self-employed people it can be a bit of a WAG (wild-ass guess).  Most people who work low wage jobs are focused on getting through the present and income forecasting is unfamiliar territory. We know how much we need to earn, but that is different from creating an accurate forecast of what we will earn, which is the question the ACA application asks.

There is an option to check a box that says, “I don’t know.” Because of the tax implications of the ACA, more specificity in the application can make it easier come tax time. That is, what we submit on the application impacts what, if any, tax credits might be available for the year. If we get it wrong, we will have to reconcile the tax credits taken to subsidize premiums with the government based on actual income. If income is understated, we may have to reimburse the government for part of the tax credit. The tax credits are an important consideration in the application process, as it impacts net health insurance policy pricing.  I plan to discuss this aspect of the application process with an ACA specialist in hope of getting it right, so I can take the tax credit now, and not have to reimburse it when we file our 2014 tax return.

Something else that wasn’t expected was that only one of the two of us was eligible for a policy through the exchange. We expected to change to a family policy, not two individual policies and this introduced another variable in the evaluation process. After resolving how to project income for 2014, I will ask my individual health insurance policy agent about costs for a replacement policy for one of us. Based on similar situations with which we are familiar, we could still save about $100 to $200 per month over our current health insurance premiums. It is worth pursuing.

As I mentioned in the first post about navigating the change in health insurance, getting facts and working through them is essential, and there is no hurry to make a bad decision. In a society where instant gratification is the expected norm, spending this time runs against the grain. However, it is the only rational way to make a decision, and some of us still believe using reason and common sense when making a decision that impacts our family still matters.

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