Healthcare Reform School - Lesson #11 - "Why should I buy insurance before the Deadline?"

Welcome back to class.  It is a beautiful day in my hometown of Chicago. I just finished walking my dog Kodie and enjoyed the 75 degree weather and clear skies.  If only we had 364  additional days like this one here.

As I was walking and thinking about blogging this morning, I went over in my head a recent email received from someone who was trying to figure out how to proceed with health insurance.  They emailed me since I am health insurance agent/broker and this is what I do for a living.  It was.a very simple question, "Why should I buy health insurance before the deadline?"  This is  a simple question with a few answers.  The very quick and simple answer is

1. A person should not be without health insurance for any amount of time.  Insurance does these important things: a) provides access to the medical system with deep discounts; b) protects you in case of a medical emergency;  c) protects your assets if something happens and you need major medical treatment. 

The more complex answer of course deals with the Affordable Care Act and how it will affect insurance.  This is the part of the answer they are trying to figure out.  And is perfect content for a complete Healthcare Reform School lesson.  Five reasons follow and then I will explain them in the following paragraphs.

Courtesy of: jscreationzs on Freedigitalphotos.net

1. Premiums will be higher for most people after the deadline, January 1, 2014.  Estimates range anywhere from 30% to over 115% higher, depending on your age and geographic location.  The youngest will be affected most, while the older generation should have the least amount of premium increase.  To figure out what your premium might be in 2014, you can use this rate calculator from the independent non-partisan Kaiser Family Foundation.  Which is an excellent place to learn everything you ever wanted to know about health insurance and the Affordable Care Act.  There is major point to make about premiums in 2014.  Many people will qualify for government subsidies based on income levels.  The rate calculator will help to determine if you will qualify for subsidies.
2. If you are a smoker, definitely buy now!  After the deadline, insurers will not be able to rate up people for pre-existing conditions, but they will be able to rate up smokers.....A LOT. So lock in a rate now and save money during that first year and try to kick the habit before 2015.
3. There are policies available now that will be stable all the way through the end of December 2014.  So if you buy ahead of the deadline, you will have a stable policy and price for the first year.  Put yourself in a good position now to ride out the bumpy first year of the individual mandate to have insurance.  My feeling is that during this first year a lot of bugs will be worked out and the law should be easier to deal with in 2015, there will be better options for insurance at that point.  To make my point about working out the bugs during the first year, I can simply refer to the recent delay in the employer mandate until 2015.  This means that they are already trying to work out the bugs during 2014, and should have a more coherent policy in 2015.  Again, ride out that bumpy first year with by going into the year with a stable policy!
4. There are choices now that will not be available after the mandate.  There are only four choices for insurance after the mandate.  All policies are required to follow government guidelines for what type of insurance they can offer. So not only is the government telling people they need to buy health insurance, the government is also dictating what type of insurance to buy.  What this means, basically, is that all policies have a limit on how high the deductible can be plus all policies must cover all of the Essential Health Benefits  (including maternity, mental health, drug rehabilitation, etc).  These two factors alone increase the premiums substantially.
5. The public exchanges will have long and detailed applications that require financial information.  Essentially, on the public exchanges people will be submitting an application to the IRS for a subsidy for health insurance.  People will also be able to purchase insurance on private exchanges, which my agency will be.  So, for those who do not qualify for a subsidy base on their income, I can help get a policy without the government application.  These polices will follow the same coverage guidelines, but will have more robust doctors networks because they will not be subsidized.

These are the main reasons to buy health insurance before the deadline.  I have explained many of these point in more details in my previous 10 blogs.  If you would like to learn a bit more about one or all of these topics, review the lessons below and go to that specific blog.  Have a happy day, I hope the day ends up as nice as it started.

Lesson #1 - Introduction
Lesson #2 - Basic Reason for creating the Patient Protection and Affordable Care Act
Lesson #3 - Public exchanges for Purchasing Insurance
Lesson #4 - Essential Health Benefits that will be added to all Health Insurance policies in 2014
Lesson #5 - Tax Credits to Help Pay for Health Insurance
Lesson #6 - Enforcement and Penalties in the Affordable Care Act
Lesson #7 - Preparing for the Affordable Care Act
Lesson #8 -  Options for Small Businesses
Lesson # 9 - Will my Insurance Premiums change in 2014?
Lesson #10 - What Will Happen to Small Groups in 2014?