The Affordable Care Act

By: Rob Overton, CFP® and

         Lynsey Bergeron, CFP® Candidate

As we move into the final months before its implementation, there is still much uncertainty surrounding the Affordable Care Act, also known as Obamacare.  We know this is a politically charged issue. We are sending you this commentary, not to remark on the politics of this situation, but to outline how the law could affect you.

1. If you have desired to make a change, such as in employment or health insurance, but have not for fear you would not be approved for a new insurance policy, this could be the time to shop.  Insurance companies can no longer refuse a person based on health conditions, or exclude pre-existing conditions, starting on January 1st, 2014.
   1. If you do decide to shop for new insurance under the Affordable Care Act, it is reasonable to question the prospective insurance company regarding what would happen to your coverage if the ACA were altered or even repealed.  To use insurance-speak, you could ask if the policy will have a non-cancellable clause, which states the only reason they could drop your coverage would be if you were to fail to pay your premiums.
2. If you think you might qualify for the Federal tax subsidies being offered under the Affordable Care Act, it might be a good idea to explore switching to a new policy through the exchange.  The Federal marketplace exchange, Healthcare.gov, or your state’s exchange if they run one, are the only places that you may actually apply for a subsidy.  However, in order to check your eligibility quickly and without the hassle of inputting your personal information, the Kaiser Family Foundation offers the following link to a subsidy calculator: http://kff.org/interactive/subsidy-calculator.  Please be advised that this calculator provides merely an estimation of your eligibility.  If you do not qualify for a subsidy, it is not necessary to enroll through the exchanges.  You will get similar results in coverage directly through an insurance company or an independent broker.
3. Some current policy holders are receiving notices that their policies will be cancelled as of Jan 1, 2014, because they do not qualify under the Affordable Care Act.  If you fall into this category, you will be forced to shop for a new policy as indicated in points 1 and 2.  Your costs may change, but you cannot be denied coverage.
4. If you do not fall into these first three categories, it may be best for you to keep your coverage as it is until more of the uncertainties have been resolved.  You have until December 15th to enroll in a plan that will start January 1st, and there are no incentives to enroll early.

As a reminder, Medicare is currently not being affected by the Affordable Care Act, and the employer mandate was postponed until 2015.  We hope that this outline helps to explain how this law could affect you and your loved ones.

The views expressed are not necessarily the opinion of Cambridge Investment Research, and should not be construed directly or indirectly, as an offer to buy or sell any securities mentioned herein.  Investing is subject to risks including loss of principal invested.  No strategy can assure a profit nor protect against loss.  Past performance is no guarantee of future results.  Indexes are unmanaged and investors are not able to invest directly into any index.

This material contains forward looking statements and projections.  There are no guarantees that these results will be achieved.  Any assumptions and recommendations have been made based on the law as we understand it today, as future amendments to the law cannot be accurately predicted.