The Complications of the Uninsured

Transcript from the Podcast Episode:

Hello and Welcome, this is your health bestie Barbara.

In the last episode:

We defined health insurance. Now we know that health insurance protects our financial upside.

Today we will contrast this by discussing the uninsured. We will also discuss the latest happenings in health insurance.

At the end of the episode we will explore Mr Sinatra’s famous song titled my way. To whet your taste buds, here is a brief preview of what is to come in this episode:

Our discussion today is not meant to treat or diagnose any particular disease and it should not substitute qualified medical advice.

In the US, health insurance coverage is offered via both public and private sources.

More people have private health insurance than government provided coverage.

Private health insurance can be offered through an employer or it can be purchased independently by individuals.

Private health insurance is an agreement that the insurer will take on financial risk for health care costs, administer benefits, pay claims or contract these functions to a third party for individuals or groups of individuals and their families. This is referred to as a fully insured plan.

Private health insurance can be received via a state licensed health insurer or a self funded employee health benefit plan.

Public health insurance can include Medicare, Medicaid, Chip, the Children’s Health Insurance Program, TRICARE, federal and state health plans.

ACA

After the Great Depression the advancement of medical care made hospital and physician services too expensive for ordinary families.

Providers and Unions created agreements to guarantee medical care for the union workers and prepaid income to the providers. But not everyone belongs to a Union so many people were still left without health insurance.

To solve this, Medicare and Medicaid began in 1965. These acts expanded coverage to more Americans. Still many people were left without coverage.

The Patient Protection and Affordable Care Act of 2010, also known as the ACA or Obamacare further expanded coverage.

It included rules for individuals, employers and insurers to reduce barriers to private insurance. It also made changes to the delivery and quality of care received. Perfect, let’s find out more.

Uninsured

Those who are uninsured can be defined in several different ways. Allow me a moment to explain.

When we consider the uninsured we may ask, did this person have insurance for the entire year last year, are they currently uninsured or were they uninsured at any point during the prior year?

For example, a person may be in a transition from one health insurance plan to another and have a temporary lapse in coverage.

Surprisingly, 70% of those without insurance are actually employed and more than half work full time jobs. The uninsured generally make less than $50,000 per year.

Being uninsured can affect health, health care and financial security. Health insurance is meant to protect against unpredictable out of pocket spending.

A person who is uninsured will not have this protection. When they engage with the medical system, they will not have the negotiation power of the health insurance provider over the price of the hospital and physician services.

This means they will need to negotiate the list price reported by the provider. Consequently, the uninsured do not have a familiar source of medical care. As a result, they may postpone care.

Health outcomes for the uninsured are worse when compared to those with health insurance. In prior episodes, we have discussed how to select a primary care provider and how to partner with our healthcare providers. Those who have a prior relationship with their healthcare team will already have a plan set up in the case of an emergency.

The uninsured are more likely to go without basic healthcare needs such as flu vaccinations, cholesterol testing, cancer screenings and hypertension diagnosis. Also, they receive lower quality physicians and are treated at lower quality hospitals.

When hospital admission for the insured and uninsured are compared, the uninsured receive fewer services and have an increased risk of death.

Not only this, uninsurance can be a source of financial distress. When a person is healthy, they have fewer work absences and improved performance. Also, the healthy person will have a reduced amount of household debt and personal bankruptcy.

Medical debt is usually a part of the debt burden one has when filing for personal bankruptcy. By holding more comprehensive benefits one can ease the burden of medical debt.

While coverage expansion in the US has helped to ease financial strain, there can be a downside if one unknowingly or unwilling accepts an ACA plan.

Subisidies are one of the provisions included in the ACA when purchasing health insurance from the marketplace. These subsidies are only available to those earning 100 to 400% below the poverty level.

Just in case you are wondering, which earnings constitute poverty, I will cover them in brief.

For an individual in 2024, yearly earnings of $15,060 or less qualify as poverty level. This means you make $1,255 a month or less. This number changes based on the number of people in the family.

For a family of 4, income equal to or less than $31,200 per year is considered poverty level.

It is possible to be penalized if you accept a subsidy, when yearly earnings are above the poverty level. It is my hope that your earnings are above the poverty level and that you steer clear of these unnecessary subsidies in order to avoid adverse consequences.

While it may be tempting to save money, there is a popular saying, a dollar saved is a dollar earned, but recent experience shows that come tax time that little nest of savings can be cleared out if subsidies from the ACA are taken when one does not qualify for them.

Taxes for Accepting ACA

Some tax filers have recently experienced complications because their tax returns are being rejected.

Inadvertently, they failed to provide information about the Affordable Care Act coverage that they did not know they had.

When the returns are rejected the tax payer may end up paying more in taxes.

To reduce the occurrence of this, health insurance experts are required to retain and document consent at the time of enrollment in a Marketplace plan that provides a subsidy.

This consent is also necessary when making a change that modifies the subsidy. The consent must be retained for a minimum of 10 yrs.

H&R Block, a popular tax filing resource states that a premium tax credit is an advance credit that you receive on your tax return. This tax credit is also known as a subsidy.

It is important to assess whether your family qualifies for this credit.

To do this, calculate your household income and then determine the amount of the credit that you can claim. Next, in order to receive the credit, you will need to purchase health insurance from either the federal or state marketplace.

A legal firm in North Carolina has already had to help more than 30 families with their taxes after they discovered that they did not qualify for a premium tax credit for health insurance.

As a result, the IRS has issued an FAQ with instructions to correct electronic returns that have been rejected because of issues with the ACA.

At Health Solutions Today we only partner with knowledgeable insurance experts who offer private health insurance. This includes both underwritten and guarantee issue plans.

Ashley, an ultrasound technologist in Charlotte, NC had employer coverage but now faces a tax bill for accepting tax premiums for which she did not qualify. At some point during the year she added additional health insurance that was subsidized. As a result, her tax refund dropped from $4,100 and now owes $700 in taxes.

She received a 1095-a at the beginning of the year which showed that she had an ACA plan. She reported the problem to the federal marketplace and sought to get the 1095-a voided so that she would not be held liable for premium subsidies that she received.

But, over the past year, her pharmacy billed the ACA plan instead of her primary health insurance so her request was declined. Now she has filed for an appeal and also a tax extension.

How do You Know if you are enrolled in a Marketplace plan that receives premium tax credits?

You will receive a form 1095-a. If you receive this form, review it immediately to confirm that it is accurate.

If you find any discrepencies, then request a correction.

It can take several weeks for the form to be corrected. If you request the correction during tax season then you may need to file for an extension.

To avoid penalties and accrued interest during this time, it is recommended that you pay any taxes owed.

During the year, outside of tax season, if you suspect that you have unwittingly enrolled in an ACA plan, report it to the Marketplace and request a corrected 1095-a form.

An appeal to cancel unwanted ACA coverage retroactively must be made within 60 days of discovering the enrollment. Contact your health insurance expert if you have concerns.

Inspiration

Our goal at Health Solutions Today is to be a health insurance resource for those who are self employed.

Last week we explored the history of health insurance as it developed in the US. We learned how health insurance has been bundled in as a benefit to employees.

These days there are many options to earn income and be self employed. As a result, we need to have our own human resources so to speak and receive the benefits that companies provide to employees.

We choose to be self employed because we want more control over our free time, finances and our quality of life. We know that we can give ourselves a pay raise while working fewer hours than traditional employers.

Also, we do not want financial surprises at the time of our retirement, which can be a fragile time of our lives.

These days retirement is based on 401ks. 401ks are based off deposits into stock plans. While it is true that the overall direction of the stock market is in the upward position, our retirement occurs at a particular point in time. This point in time can occur during a market downturn. Market prices could drop more than 50% at any given point in time.

Would you like for your retirement to occur during the time that the market has dropped 50%? This would mean your retirement savings would be 50% less than expected, no bueno.

That’s not good at all. Of course, it is great to use these financial tools, get a 401k and a Roth IRA, get an SSI check. You earned these.

The point is to develop multiple streams of income, this way if run river runs dry then you still have other rivers of income available, you see.

A properly run business can continue to generate income consistently and not have to rely on market fluctuations.

Recently, Lauren started a bookeeping business. She was working in the stressful restaurant industry and dreaded the long exhausting hours and the time she spent away from her newborn. After 1 month in business she had 4 clients and a few months later she had 13 clients. She was able to replace her job in the restaurant industry, reduce her work hours and increase her pay all at the same time.

As a result she is able control how she spends her time and how much money she makes. Every month she is able to set aside savings, repair her credit score and she even paid off her car. Now she is in a position to grow her family, buy a home and make more investments to improve her lifestyle.

Health Solutions Today is simply, one step in the direction of providing more freedom and benefits to those who choose to employ themselves and have direction over their lives.

We refer people to qualified health insurance experts to enroll in private health insurance. By doing so, we enable our readers to build their businesses and take care of their finances as well. In this article we learned that those who have health insurance also have better health and finances.

I have some great episodes planned. In the next article I will discuss premiums, indeminities, deductibles and income protection.

Afterwards, I would like to dive deeper into health insurance premiums in relation to tax deductibles.

Finally, I have plans to discuss underwritten and guarantee issue plans.

Good stuff.

Today we discussed the consequences of not having health insurance and the how to navigate away from unwanted ACA subsidies.

We now know that knowledgeable health insurance experts are available to help guide our health insurance decisions.

Hey, this is Barbara, I am yours in health. Let me help you navigate the amazing world of health insurance.

Remember Every day can be a healthy day.

And as always, Thank you for being so awesome!