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Obamacare Is Here - How To Make The Most Of Your Options

The Patient Protection and Affordable Healthcare Act was passed into law in March of 2010.  Known as Obamacare,  the new healthcare system is being phased in as of October of this year.  So called health insurance exchanges will also go live in October. The state exchanges will provide a competitive marketplace for private insurance companies to compete. The exchanges will provide options for both individuals and small businesses.  


Guaranteed Issue

One of the most profound changes to our health insurance system is the promise of guaranteed issue. This means that individuals of the same age and geographic location will be offered the same rate without regard to pre-existing conditions (excluding tobacco use).

Government Subsidies

Lower income families will receive tax credits to offset the cost of health insurance that they purchase from a state health insurance exchange.  Subsidies are available for families with incomes up to 400% of the federal poverty level (family incomes up to $46,000).  There is also a new simplified application process for CHIP (Children's Health Insurance Program).


How Much Will It Cost?

We simply don't know at this point, but the cost may not be as low as many people are expecting. Take just the issue of pre-existing conditions.  The idea that anyone with virtually any pre-existing illness can obtain insurance at the same rate as a healthy person will bring the costs up substantially for everyone. This provision even provides access to individuals that wait to get health insurance until after they become pregnant.  Although premiums can be adjusted for age, it appears that younger people will be facing artificially higher rates to offset for the fact that older people will be benefiting from artificially lower rates.

Individual and Business Mandates

Businesses with 50 or more employees will be required to provide health insurance to their employees or face a fine of $2,000 per employee.  Employers will not be able to use the age old strategy of avoiding paying benefits by keeping their workers as part timers.  One provision makes 'full time' only 30 hours weekly and reaches this figure through a clever averaging method.  The net effect of this is that it will be nearly impossible to avoid providing coverage to any employee (even if they are strictly a part timer).


Individuals over the age of 18 are required to maintain an individual health insurance plan or face a penalty.  So, if you are self employed, unemployed, or work for a business with less than 50 employees you still must have health insurance or face a personal penalty that will be enforced by the IRS.  

Obamacare, has a minimum individual penalty of $95 in 2014, $325 in 2015, and up to 2.5 percent of income or $2,085 maximum per family in 2016.   Some argue (and validly so) that many will opt to pay the fine and not carry insurance until they need it.   This will create even higher rates for everyone else as individuals wait until they are sick, pregnant, or need a major procedure to obtain coverage and then cancel it shortly after they receive care.

Christian Medical Sharing - The Perfect Option For Me (And Maybe For You)

My wife is a school teacher and we have been blessed to have access to great health insurance as part of her employment.  We have noticed, however, that our portion of the premium has begun to really go up over the last two to three years.  So much so, that we have had no choice but to take a look at other options.  My wife will continue to keep her personal coverage with her school district, but for myself and our three children we will all be utilizing Christian medical sharing.  I have personally been in a Christian medical sharing plan since August of 2012 and find it to be a wonderful and inexpensive alternative to health insurance.  It does qualify as a bonafide option within the new law so that those of us enrolled are not subject to any of the fines that begin in 2014.  If you are interested in this option, read my prior articles on Christian Health Insurance Alternatives.

Start Getting Ready Now

Checklist for individuals and families

Checklist for small businesses

Please use the comments section below to share your own thoughts and ideas and we can start a converation.

Helping you make the most of God's money!

James L. Paris 
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