FAQ’s « Independent Income Advisors



Obamacare has just concluded another Open Enrollment season but there are still many misunderstandings and misconceptions about what the law does and does not do.   Here are some frequently asked questions about the new requirements. 

What is coinsurance?

Coinsurance is where you split the cost of treatment with the insurance company.  Typically you pay the smaller percentage.  Except for Medicare Part B there is a cap (the Out of Pocket Limit) after which expenses are paid at 100% for the rest of the year.

What is the Exchange?

The Exchange, or to give it it’s government name, the Federally Facilitated Marketplace, is what you are looking at when you go to www.heathcare.gov.  You MUST go to the Exchange if you need help paying your health insurance premiums, but you can shop through an agent or an insurance company and they can connect you to the Exchange to enter your financial information.  Some insurance policies are not available on the Exchange, some are only available through the Exchange.

Did Obamacare drive up premiums?

Well yes and no.  Premiums were going up anyway.  The requirement that insurance companies cover pre-existing conditions and eliminate lifetime maximum benefits made things worse.  Getting rid of the mandate will accelerate the rate of increase even more, but what really drives up premiums is the cost of healthcare.

Is it true that deductibles are much higher?

NO!  The law limits 2018 deductibles to a maximum of $7,350/year. Previously, there was no limit on deductibles and plans with deductibles as high as $10,000 were readily available. Also the benefits under the new plans do not contain annual or lifetime dollar limits. These requirements, however, did help to push premium costs higher.

Can I still qualify for an Obamacare subsidy?

You can qualify for help with your premium if your household income falls between 100% – 400% of the Federal Poverty Level, and don’t have access to affordable health insurance, BUT, if your employer provides “affordable” group insurance for you, your dependents can’t apply for a subsidy.  You can no longer apply for help with deductibles and copays, etc.

Are Obamacare premium subsidies taxable income?

No, but if you claim too much of a subsidy, it will have to be repaid when you file your next tax return. Conversely, if you claim too little, the IRS will add the difference to your refund.

What is Medi-Share?

Medi-Share is one of a number of Christian health share ministry.  Health share ministries have become very popular since Obamacare, because they are inexpensive and because members were exempt from Obamacare penalties, but their benefits are limited compared to Obamacare, you have to be healthy to join (they don’t cover pre-existing conditions) and most importantly, they do not guarantee payment.

If a customer changes their mind and wants to switch to another plan or carrier after the open enrollment period, can they do so?

No!  Once a plan is selected, a person cannot change or move to a different insurance carrier outside of an open enrollment period. If a person has a life event – getting married, having a baby or losing their group insurance – there are exceptions.

Is it true you can keep your health insurance if you like it?

Sort of: anyone who had a health insurance policy that was in force before March 23, 2010, was able to keep it – as long as no changes are made to the policy. (This also applies to group insurance.)  We still have some on the books.

Was it true that Muslims were exempt from Obamacare?.

NO! Despite oft-circulated internet rumors, there is no specific exemption in the law for Muslims. The law does contain an exemption for groups described in IRC 1402(g)(f) which existed prior to Obamacare and governs exemptions from the payment of Social Security and Medicare taxes on self-employment income. This includes groups like the Amish and Mennonites.

How did Obamacare affect Medicare benefits

Obamacare made two major changes to Medicare: it gradually closes the infamous “donut hole” or coverage gap in drug plans, and it forced insurance companies to spend at least 85% of taxpayer money they receive for Medicare Advantage plans on benefits.