6 Moves to Make Right Now if You Lost Your ObamaCare Coverage
According to new figures from the Centers for Medicare and Medicaid Services, more than 3 million people enrolled in an Affordable Care Act (ACA) plan this year dropped their coverage.
Those millions of patients dropped their ObamaCare coverage as monthly premiums went higher and enhanced subsidies expired. Losing healthcare coverage can be an emotionally and financially challenging situation.
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If you’re among those who lost your coverage, here are smart moves to consider making now to protect your finances according to experts.
Look Beyond the Initial Shock
According to Cody Schuiteboer, president and CEO of Best Interest Financial, assume that the loss of coverage creates a new, fixed expense, rather than a temporary shock.
“The first step in accounting for a new expense should never be to search for a lower-cost plan,” Schuiteboer said. “Instead, a new expense should be accounted for in the monthly budget.
"Households that assume the loss of coverage creates a temporary expense are most likely to cover the expense using credit, and before the end of the month, they will have a coverage and debt problem.”
Act Within 60 Days of Losing Coverage
“Most people don't know this, but losing your ACA plan triggers a Special Enrollment Period,” said Andrew Lokenauth, founder of the blog Fluent in Finance. “You have about 60 days from the date you lost coverage to sign up for a new plan, either back on the marketplace or through a different option. I've seen people miss this window and end up uninsured for months. Don't let that happen to you.”
Drop Down to a Bronze or Catastrophic Plan
According to Lokenauth, a bronze plan won't cover as much, but it keeps you protected against a major medical event, which is the real financial risk.
"I personally think paying a lower monthly premium and accepting a higher deductible is far better than going uninsured entirely," he added.
Evaluate Your Other Options
Per Brandon Gregg, certified financial planner (CFP), advisor with BBK Wealth Management, the same company that provides your auto and home coverage may also offer private insurance options.
“It would be wise to set up a meeting to review available coverages,” he said. “At a minimum, you could compare and contrast past options with current opportunities to see if private insurance makes sense. Often, many of these policies are expensive and may not provide the full coverage needed, but cheaper options might cover a portion of a person's required medical expenses.”
Be Careful With Short-Term Plans
Experts warn that non-ACA health plans may not cover pre-existing conditions and may have significant limits on what's covered, network restrictions and other constraints that the ACA had specifically addressed or eliminated, Lokenauth said.
“I've talked to people on social media who signed up for cheap short-term plans, had a health scare and discovered the plan covered almost nothing,” he added. “Read every line of what's excluded before you commit.”
Build a Healthcare Emergency Fund
The financial pros noted it's almost certain that everyone will incur some medical expense annually and that could be a good reminder to develop an emergency fund.
“Regardless of your coverage, there will always be deductibles and out-of-pocket expenses,” Gregg said. “Plan ahead and set aside money for a healthcare emergency fund. This ensures that unexpected medical costs won't lead to a shortfall or unnecessary credit card or loan debt.”
The Bottom Line
Per Chad Cummings, an attorney and certified public accountant at Cummings & Cummings Law, older workers will be particularly affected, especially those above the Medicaid eligibility threshold but not yet eligible for Medicare.
“These individuals lost all subsidy eligibility, face premiums up to $20,000 annually and sit in a dead zone between employer coverage and Medicare,” Cummings said. “I advise this group to model spousal employer plan enrollment, S-corporation health insurance deductions or state-specific bridge programs before defaulting back to the ObamaCare market.”
This article was provided by MoneyLion.com for informational purposes only and should not be construed as financial, legal or tax advice.
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