The Willis Report: Understanding the costs of Obamacare - New York News

The Willis Report: Understanding the costs of Obamacare

Posted: Updated:

By Gerri Willis
FOX Business Network

The success of Obamacare and the health exchanges that opened this week hinges on one thing: Whether or not the 57 million young people under the age of 65 participate.

That's because higher costs assessed to younger consumers for coverage were imposed as a way of footing the bill for older and sick Americans. It's an open question whether this demographic will choose to buy coverage on the exchanges. With 51 percent of Americans saying they don't have enough information about the law to understand how it will impact them and their family, we decided to fill in the gap and give the facts and figures on what younger consumers need to know about the Obamacare exchanges:

There is no need to rush. Sure, the starting gun for Obamacare fired Tuesday with the opening of the exchanges, but individuals have at least three months and as much as six months to get coverage. The government doesn't requires individuals to be able to prove they have coverage until Jan. 1, 2014, but the fact is that people are allowed a "short coverage gap" of up to three months which means you can wait even longer. What's more, experts say the exchanges may not be ready for primetime. Major software glitches made it impossible in the days before the exchanges opened to reliably determine prices or subsidies, and staff was working around the clock to fix the problems. For that reason, the best strategy, if you want to see what Obamacare exchanges have in store for you, is to wait, until November or even December when, presumably, the problems will be worked out.

Don't bank on lower costs. Last week, the Obama administration said the average monthly premium enrollees in the exchanges will be charged is just $328. But that doesn't tell the whole story. Premiums may be lower, but your out-of-pocket costs will be higher according to analysis of the plans by health care consultant Avalere. That company estimates that deductibles (the amount you pay out of pocket each year before your coverage kicks in) will be $2,550 up to a high of $5,000. That average deductible is double the level of the average employer-sponsored deductible of $1,135. What's more, you may pay more for drugs, as much as 40 percent. Some experts say they expect people in their 20s and 30s to see their insurance rates rise as much as 30 percent under the Obamacare exchanges.

Compare apples to apples. You've no doubt heard about the thousands of "navigators" hired to advise people on choosing coverage on the exchanges. Truth is, some states have advised navigators to stay away from directly advising people about their choices. Some of the navigators have said they hadn't even seen the exchange offerings as late as Sunday. You could hire a broker to help, but chances are they are they may direct you to insurers paying their fees. So, it's really on you to find the best deal. The key to doing it successfully is comparing all of the costs. Don't just focus on monthly premiums, but also consider deductible and drug costs. If you are employed and have been on a so-called "high-deductible plan" offered by 70 percent of employers, compare the details. The average deductible in an employer-sponsored plan is $3,000, higher than the average for Obamacare at $2,550, but some of the government policies will have deductibles as high as $5,000.

Avoid the scammers. Like all government programs promising free money, the health exchanges are drawing lots of scammers. Fake websites are bilking seniors offering to allow them access to Obamacare. Understand that access to the legitimate exchanges is free (coverage isn't, obviously).

To find your state's legitimate website, go to www.healthcare.gov. You can find out whether you are eligible for subsidies to pay for your government-sponsored coverage, go to the Kaiser Foundation's website, www.kff.org, which has a subsidy calculator.

Experts say that single, young people earning less than $46,000 will be eligible for subsidies, but you may be underwhelmed by the amount you get. According to a study from the National Center for Public Policy Research, subsidies for younger consumers start phasing out at 300 percent of the federal policy level. In 11 of the 15 exchanges, taxpayer subsidies disappeared by people aged 18 to 34 before annual incomes of $34,470.

Interact with Gerri on Twitter @GerriWillisFBN and Facebook for more information, or to voice your concerns and questions.

  • BusinessMore>>

  • Facebook's Internet.org expands in Zambia

    Facebook's Internet.org expands in Zambia

    Thursday, July 31 2014 11:31 AM EDT2014-07-31 15:31:47 GMT
    Facebook's Internet.org project is taking another step toward its goal of bringing the Internet to people who are not yet online with an app launching Thursday in Zambia.
    Facebook's Internet.org project is taking another step toward its goal of bringing the Internet to people who are not yet online, launching an app Thursday in Zambia.
  • US stocks slump as earnings disappoint

    US stocks slump as earnings disappoint

    Thursday, July 31 2014 11:31 AM EDT2014-07-31 15:31:37 GMT
    Global stock markets were uninspired by an upbeat report on the U.S. economy, with most drifting lower Thursday after the U.S. Federal Reserve said it would make further cuts to its monetary stimulus as expected....
    U.S. stocks slumped Thursday as investors reacted to disappointing corporate earnings reports and assessed the implications of the approaching end to economic stimulus from the Federal Reserve. That stimulus has...
  • Average US 30-year mortgage rate at 4.12 percent

    Average US 30-year mortgage rate at 4.12 percent

    Thursday, July 31 2014 11:26 AM EDT2014-07-31 15:26:02 GMT
    Average U.S. mortgage rates declined slightly this week, hovering near their lows for the year.
    Average U.S. mortgage rates declined slightly this week, hovering near their lows for the year.
  • MorningsMorningsMore>>

  • Out & About: Flyboarding

    Out & About: Flyboarding

    Thursday, July 31 2014 11:21 AM EDT2014-07-31 15:21:46 GMT

    It's a new extreme water sport called flyboarding where a jet ski propels a board into the air.  Derek Kevra says it was amazing.

    It's a new extreme water sport called flyboarding where a jet ski propels a board into the air.  Derek Kevra says it was amazing.

  • City of Detroit posts improvement updates online

    City of Detroit posts improvement updates online

    Thursday, July 31 2014 7:18 AM EDT2014-07-31 11:18:29 GMT
    Residents will be able to view the number of new streetlights installed in their Detroit neighborhood, how many lots were mown and the number of vacant houses demolished by going to the city's website.
    Residents will be able to view the number of new streetlights installed in their Detroit neighborhood, how many lots were mown and the number of vacant houses demolished by going to the city's website.
  • Prosecutor to discuss sex-assault allegations against Tigers minor-leaguer Evan Reed

    Prosecutor to discuss sex-assault allegations against Tigers minor-leaguer Evan Reed

    Thursday, July 31 2014 7:12 AM EDT2014-07-31 11:12:05 GMT
    Evan ReedEvan Reed
    Wayne County Prosecutor Kym Worthy plans to hold a news conference to announce the results of the warrant review regarding former Tigers pitcher Evan Reed.
    Wayne County Prosecutor Kym Worthy plans to hold a news conference to announce the results of the warrant review regarding former Tigers pitcher Evan Reed.
Powered by WorldNow
Didn't find what you were looking for?
All content © Copyright 2000 - 2014 Fox Television Stations, Inc. and Worldnow. All Rights Reserved.
Privacy Policy | Terms of Service | Ad Choices