Subsidies are Here to Stay!

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The Affordable Care Act survived yet another challenge today when the Supreme Court ruled 6-3 (King v. Burwell) against four petitioners from Virginia who challenged that their State’s prior decision precluded them from being eligible for premium subsidies (tax credits).

The petitioners from Virginia do not want to purchase health insurance. In their view, because Virginia does not have their own “…Exchange established by the State…”, they argued that they also should not be eligible to receive Affordable Care Act premium subsidies, which would have brought the cost of insurance below 8% of their income, and which would have also resulted in the removal of their exemption from the ‘individual mandate’.

While this might not be the interpretation of the Affordable Care Act that some were hoping for, it is great news for many individuals in those States, including Wisconsin, that opted not to create their own State run Exchanges.

I will admit…without the premium subsidies for individual health insurance, there is not much about the Affordable Care Act that has resulted in increased affordability. Here in Wisconsin, where our State did not expand Medicaid, I serve many individuals that would not otherwise be able to afford their own insurance coverage, due to the rising cost of health insurance post Affordable Care Act implementation.

The main factor here in Wisconsin is that BadgerCare eligibility for adults between 100% and 400% of the Federal Poverty Level has basically been eliminated by our State Governor. This leaves the people in that range of income with few viable options for affordable health insurance coverage, save the help that cost-sharing and premium subsidies provide through the Exchange. Had the Supreme Court ruled opposite…those same adults would be both without access to BadgerCare and without cost-sharing and subsidies offered through the Exchange, leaving them without any real means to be insured.

Just last week I was introduced to a very cool and intelligent young man. He is in-between jobs, raising his daughter, and did the unthinkable…he turned 26 and no longer qualifies to remain on his parents health insurance plan.

We were able to sit down together and enroll in a plan through the Exchange that offered him both cost-sharing and premium subsidies. He and his family can now look to the future confidently knowing that his health care needs and medical care expense risks will be affordable for him in the best case scenario if he stays healthy…but that even if the worst case scenario were to occur, where he experiences costly medical services, his insurance out-of-pocket expenses are controlled and are financially manageable. He is now able to focus on finding that next job, focusing on his education and his financial future, and able to focus on raising his child with a little less stress.

Without the premium subsidies, my guess is that this young man would have gone without insurance coverage. He’s a young healthy guy, and may never have a need for insurance coverage anyways…but we all know the other side of the story…and none of us would wish that on our own son or daughter.

So we now know that the subsidies are here to stay, and they are helping our country reduce the rate of the uninsured which is a great thing. The Affordable Care Act is not perfect by any perspective, but it is something that is working at least for those individuals that need financial assistance due to personal income situations or due to State Medicaid expansion policy. My hope is that our leaders will work together to build on the law’s strengths and continue to make it better.

—- Jerry Gillis is a licensed insurance agent in the State of Wisconsin with over 9 years experience matching individuals and businesses with the insurance coverage options that fit each unique need.

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ARE YOUR HEALTH INSURANCE PREMIUMS KEEPING YOU UP AT NIGHT? IT MAY BE TIME TO CONSIDER AN HSA QUALIFIED HEALTH INSURANCE PLAN

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Whether you are a young single guy, a family of four, or you manage the employee benefits for your organization, now might be the time to consider how an HDHP medical insurance plan, together with an HSA (or health savings account) can help reduce monthly premium and medical expenses.

The savings in medical insurance premiums along with the tax advantages of being able to use pre-tax contributions to HSA’s for qualified medical expenses may justify taking on the risks of higher deductibles and out-of-pocket expense limits that an HDHP medical insurance plan requires.

If you are an employer that has been able to keep your pre-ACA health insurance plan through the Transitional Assistance rulings, you may truly find that transitioning to an HDHP is even more attractive today than ever before. Continue reading