Round 3: Signing Up for Obamacare

Round 3: Signing Up for Obamacare
Eileen St. Pierre, The Everyday Financial Planner

health insurance1Open enrollment for those individuals and families wanting to purchase health insurance in the Marketplace started on November 1. The deadlines are a little different from last year. You need to sign up for a plan by December 15 if you want coverage to start on January 1, 2016.

It did not take long to sign my husband and me up this year. The website worked really well. As promised, here is a highlight of my experience – the good, the bad, and the ugly.

The Good – Our tax credit doubled.

It is always a good idea to get your tax credit recalculated. The Marketplace uses income data from your 2014 return to determine the amount of your advance premium tax credit for 2016. It just so happened that 2014 was our first full year of self-employment.

  • We do expect to earn more than our income in 2014 but we do not know how much. This means we expect to have to pay back some of the tax credit.
  • To be on the safe side, we will put the full value of the tax credit in savings to handle the increase in income taxes.
  • Based on last year’s experience, I knew the IRS would not accept any of our 2016 income projections. They would end up using the last available tax return. That’s what makes this system tough for sole proprietors like us.

The Bad – Our previous plan is being discontinued.

We had the same plan for the last two years and liked it. But we had to choose a new one. We wanted to keep the same insurer. After going through the application process, there were only four Silver plans from this insurer. Only one of these plans listed our local hospitals and doctors in their network. So the decision was pretty simple. This was also the plan the insurer was going to put us in automatically. But there are going to be some trade-offs:

  • Our total costs should be lower if we use in-network providers. We both get three free visits to our primary care doctor during the year.
  • There are only three pharmacies that are now considered in-network. Luckily Walmart is on the list.
  • We are going to pay through the nose if we have to use out-of-network providers. There are no out-of-pocket maximums anymore. Our cost for using out-of-network providers is unlimited.

The Ugly – Premiums have really gone up.

That’s probably not a surprise to many of you. For us, here is how our costs have changed:

  • Last year’s monthly premium was $683.76 for the two of us.
  • Next year we will have to pay $1,051.61 per month for the new plan.
  • Luckily, the doubling of our tax credit will end up lowering our monthly cost by almost $20 a month. That’s $240 we can put towards dental care.

I always opt out of letting the Marketplace use tax and income data for the next five years to help determine our advance premium tax credit in the future. I prefer to enter the information myself. In the back of my mind, I keep hoping Congress will reform the system. There are some good sides of Obamacare, but there are also some parts of it that are very divisive. I know – it’s just wishful thinking on my part.