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When N.M. and her husband qualified for Medicare, they were surprised to learn how expensive supplemental plans are …

Expensive supplemental plans for our seniors…

One year ago, N.M. lost her job. With that loss, she and
her husband also lost their health insurance. Luckily, N.M. and her husband were both over 65 and could transition together to Medicare. However, they knew that in order to have high quality coverage and care, they should also obtain supplemental insurance. N.M. purchased the supplemental plan through the Public Employees Health Plan. Her monthly social security check is $1,080. Medicare takes out a $100 fee, so her take home check is $980. The supplemental insurance for both her and her husband is $688 a month. 70% of her social security goes to paying insurance. Luckily, her husband is still earning an income. But once they are on a fixed income, N.M. worries that such high insurance costs will impact their ability to pay their property taxes.

The Patient Protection and Affordable Care Act (PPACA)will lower costs, improve choices and competition and offer assistance to ensure that Americans can afford health insurance.

PPACA places a cap on what insurance companies can require individuals to pay in out-of-pocket expenses, such as co-pays and deductibles. This will ensure that Americans are not forced to file bankruptcy due to high health care costs. It also eliminates lifetime limits on how much insurance companies cover if you get sick and regulates plans’ use of annual coverage limits until 2014, when they are prohibited.

Effective 2014, premium assistance tax credits will limit the amount an individual spends on their health care premium for the essential benefits package from two percent at 100 percent of the Federal Poverty Level (FPL) to 9.5 percent of income at 300-400 percent of the FPL. The amount of the credit is tied to the premium of the second-lowest cost (silver) plan in each area.

PPACA also provides credits to reduce the amount of cost-sharing for lower-income individuals. Their annual out-of-pocket limits would be a fraction of the standard amount: one-third for those with income below 200 percent of the FPL, 50 percent for those with income from 200 to 300 percent of the FPL, and two-thirds for those with income from 300 to 400 percent of the FPL. In addition, there will be state-based Exchanges will help eligible individuals and small employers compare and purchase health care coverage at competitive prices online.