What is Obamacare and How does it work?

Are you about to lose healthcare coverage through a job? Before you stress out about it, consider enrolling in an Obamacare plan on your own to get the coverage you need. The law helps you afford insurance coverage, so you can go to the doctor when necessary. You'll also be able to compare different plans to find one that works for you. Read on to learn more.

Overview of Obamacare

Obamacare, another name for the Affordable Care Act (ACA), is a law that helps protect consumers when buying health insurance. It requires insurance plans to cover people with pre-existing conditions without charging them more. Insurance plans also have to cover preventive care and not charge the patient out of pocket. The law requires a parent's plan to cover their children under age 26. Obamacare's goals are to make health insurance available to more people. The program also aims to expand Medicaid and to reduce costs surrounding healthcare.

Who Is Obamacare For?

Obamacare is open to most people in the United States who need insurance. It's especially useful for people who aren't eligible for Medicare coverage. ACA health insurance plans are also beneficial for low- and middle-income Americans. If you make a certain amount of money, you may qualify for a tax credit to help cover the cost of your plan. However, you can apply for a plan through the ACA marketplace regardless of your income. The marketplace is fantastic for self-employed individuals and families who can't get coverage through a traditional job.

Eligibility Requirements

Unfortunately, not everyone in the United States is eligible for coverage under the Affordable Care Act. You must live in the US, but you also have to be a citizen, national, or otherwise lawfully present. Examples of people who are lawfully present include refugees, trafficking victims, and people with a worker or student visa. You also can't be incarcerated, and you can't have Medicare coverage to qualify for an ACA plan. Even if you're currently eligible, you may lose eligibility if you move out of the country. If you're an immigrant, you could lose eligibility if your immigration status changes.

Subsidy Requirements

When signing up for Obamacare, you should consider your income. If you make less than 400% of the Federal Poverty Line (FPL) for your household size, you may qualify for a subsidy. People who qualify for a tax credit will receive a discount on the cost of their insurance plan. If you think you may make more money than you predict, you can take a smaller amount as a tax credit. To qualify for a subsidy, you can't be eligible for coverage through an employer. If you do qualify for employer coverage, that will usually be a better option anyway.

How Much Can You Save?

If you qualify for a subsidy, the amount you can save depends on your income. The American Rescue Plan temporarily increased subsidies for 2021 and 2022 plans. Individuals who make less than 150% of the FPL can qualify for a plan with a free premium. If you make closer to 400% of the FPL, you may save around $670 a year. Be sure to compare plans to see how much you could save. The marketplace website lets you estimate your total costs based on your medical usage, so you can get the best picture of your costs.

How to Apply for Obamacare

If you or your spouse works for a traditional employer, you don't have to apply for Obamacare. The same is true if you're under 26 and have a parent with a traditional job. However, if you don't qualify for a plan through an employer, you can use the Obamacare marketplace. You'll need to apply for coverage and select the best plan for you. Here are the steps you should take to obtain an ACA plan.

Create an Account

First, you'll need to create an account on the marketplace website. Some states have their own marketplaces, such as California, Kentucky, and Maine, so you'll need to sign up on those respective websites. You can enroll in an insurance plan over the phone or by visiting a local agent. However, the website is easy, and you can use it at any time of day or night. When you sign up for an account, you will need to select your state and then enter your personal information. Then, you can continue with your enrollment.

Verify Your Eligibility

You should also verify your Obamacare eligibility before you finish signing up for a plan. Of course, you should verify your eligibility, in general, such as if you're a resident and aren't on Medicare. However, you should also consider the open enrollment period, which typically lasts from November 1 to December 15. Outside of open enrollment, you may be able to choose a plan if you have a qualifying life event. Example events include loss of your current insurance, a change in your household, or moving to a new ZIP code. If you have a qualifying life event, you can enroll in health insurance at any time of the year.

Estimate Your Income

When signing up for Obamacare, it will ask you to estimate your income. If you don't need or qualify for a subsidy, you can skip this step, but it's worth considering. Be sure to estimate your income for the year you will receive coverage, not the prior year. If you aren't sure how much you'll earn, you can overestimate so that you may still receive a subsidy. The smaller subsidy will still cover you if you make more money. And if you don't make more than you think, you can receive the extra credit when you file your taxes. If you work for yourself, it can be difficult to estimate how much you'll make, so keep good records to use for the future. On the other hand, if you have part-time work, you may be able to guess your annual income more accurately.

Review and Compare Plans

Once you enter your personal information and income, you will be able to view available plans. You can input your doctors' names and the names of any prescriptions that you and your family take. Then, you can filter plans to see which ones will cover your doctors and medications. You'll also be able to filter by the cost of the premium, deductible, and co-pays. The marketplace also allows you to filter for plans that are eligible for a health savings account (HSA). And if you know you want to choose a particular insurance company, you can filter by company.

Select the Best Plan for You

As you compare available plans, think about yourself and your family as well as your situation. For example, if you have minimal health issues, you may want to choose a plan with a higher deductible and a lower premium. However, if you expect to need a lot of coverage, it may make sense to pay more each month for a lower deductible. Health insurance plans fall under different metal levels from bronze to platinum. Bronze plans have the lowest premiums but the highest deductibles, while platinum plans are the opposite. The marketplace can help you estimate costs, but don't be afraid to run the numbers yourself. Use a spreadsheet to estimate the costs for doctors' visits, prescriptions, and other costs. Then, you can select a plan that will be the most affordable for you.

Pay Your First Premium

When you finish signing up for a plan, you may need to wait for the marketplace to review your application. At that point, you'll need to pay the premium for the first month of coverage. Paying the premium will confirm your enrollment, and you can make sure your coverage will come into effect when it's supposed to. Then, you can set aside the same amount each month to pay for your coverage. Depending on the plan you select, you may be able to pay your premium online. Be sure to contact the specific company you select to learn about payment options.

Use It Like Other Healthcare Coverage

Once you confirm your health insurance plan, you will need to wait until the plan becomes active. It should be active for the month after you apply as long as you apply by the 15th. If you enroll during open enrollment, the plan will start on January 1st of the next year. Either way, once it does become active, you will be able to use it like any other type of health insurance. You can use the insurance to visit the doctor, pick up your prescriptions, or go to the emergency room. If you have any questions about your policy, ask the insurance company for more details.

Will You Enroll in Obamacare?

Obamacare is an excellent law that helps more Americans obtain affordable health coverage. Be sure to verify your eligibility and to look for the best plan for you. Then, you'll have good coverage that helps you afford preventive care and other costs. And you can keep from overspending on those things to keep your bills from getting too high. Would you prefer to enroll in Medicare instead? Contact us to learn how we can help.