50+ Lifestyles

The Law Remains

By Richard J. Schillig, CLU, ChFC, LUTCF
Independent Insurance and Financial Advisor

There are clearly lots of things going on in the individual major medical insurance industry today. As you listeners may know, the Affordable Care Act (Obamacare) was enacted in law in the year 2010. Provisions of that law have been gradually phased in over the years. The more important phase-in years of the Affordable Care Act remains 2014 – the individual mandate year. That year everyone was required by law to have major medical insurance – either through an employer or by acquiring an individual major medical
insurance policy OR pay a tax penalty for not carrying major medical insurance policies. When we completed 2014 income tax returns – there was a new question on the tax return. Question on line 61 of the 1040 – the line states Health care: Individual responsibility – then provides place to check ‘Full –year coverage.’ If not full year coverage then additional instructions are involved that leads to an additional tax (or penalty) for not being in compliance with the Affordable Care Act. Now as you know the press and media are continually reporting potential changes to the Affordable Care Act being discussed in congress. But how that law turns out remains to be determined as of this writing. Right now the Affordable Care Act remains the law and the mandate requiring everyone to carry major medical insurance remains. We are required to carry major medical insurance. If we are age 65 or over Medicare becomes our primary insurance. If we are under the age of 65 – and over the age of 26 – we are required by law to carry major medical insurance per Affordable Care Act OR pay a tax penalty for not carrying major medical insurance.

AND listeners – my observation – the biggest group of persons NOT being in compliance with this law is our younger generation. Persons over the age of 26 certainly not yet on Medicare especially the 26+ year olds including persons in their 30s & 40s.Too many of this age group representing a huge percent of our population generation are just not in compliance with the law. They just refuse to carry major medical insurance.

Why does this younger generation participate in major medical insurance? Generally – the biggest reasons is cost. COST – the monthly premium on individual major medical insurance is substantial. A single person age 26 will pay close to $400 monthly for premium – with a high deductible – $1,200 or more……add spouse and children on this policy and the premium becomes more than 2 & ½ times this monthly premium. Premium for a young person or young family is well in advance of $1,000 monthly…..closer to $1200 or $1300 monthly. That kind of premium puts a big hole in a family budget for individual major medical insurance coverage. Premiums increase with age.

I recognize insurance – major medical insurance is complex. The Affordable Care Act and the individual mandate for all of us to carrying insurance has done nothing but make more complex what is already a very complicated subject. However the Affordable Care Act brings a valuablepremium subsidy allowance that may help many of our uninsured acquire insurance. Who qualifies for the subsidy brings further complexity to an already complex subject. I am brining this up to you readers to make a point of the importance of working with a professional who understands insurance and understands the complexities of insurance and further complexities of the premium subsidies that may help to minimize major medical insurance costs.

As congress continues to wrestle with what to do with the Affordable Care Act…..complexities will probably continue as new laws and provisions are considered.

What does all this come down to? What it comes down to again is the importance of working with a professional. A professional that not only understands insurance but also understand the financial services industry and how to help clients comply with the law, have major medical risk reduction by having insurance and minimize the costs. We know insurance. We can help.