Apr 28, 2016 4 min read

The issue of health care costs continues to stir debate in this country. We have one of the highest per capita costs, yet people live longer than us in a number of countries. There is no shortage of ideas about what to do about this problem. The last major overhaul was the Affordable Care Act, passed several years ago.

Marilyn Tavenner was in charge of Centers for Medicare and Medicaid when the Affordable Care Act was passed. Her department was charged with implementing this program. She now works as a lobbyist in the insurance industry. She is warning of big premium increases later this year when renewals take place. The fact is many employers and individuals who have to pay their own premiums have already been feeling the pain.

Last week, UnitedHealth Care – one of the biggest insurers in the country – announced it was pulling out of ACA plans in most states. Medical costs are continuing to rise and many prescription prices even faster. I was surprised when I recently heard the United States is one of only two countries that allow prescription advertising on television. The other is New Zealand. This could increase the cost of drugs to cover this cost and put pressure on doctors when there may be a lower cost alternative.

Before the ACA, you could choose the coverage for things you were concerned about. Today, all policies must cover the same 10 essential things even if you can’t use many of them. In the under-65 market, you must make sure you select a policy that will be accepted by your doctor. This is not a concern in the over-65 Medicare market because both major healthcare organizations will accept many policies.

The ACA requires you to have health insurance or pay a fine at income tax time. The first few years, the amount was not large, so some people did not buy coverage. The penalty is much more substantial now, so make sure you get this coverage.

When open enrollment opens in the fall, take the highest level coverage you can afford. The plans are called Bronze, Silver, Gold and Platinum. The Bronze plan is a 60/40 arrangement where the company pays 60 percent and the individual pays 40 percent. Each level provides 10 percent more coverage.

Some people take the lowest coverage because of the amount of subsidy they get covers the cost. At least the Silver level is required to get all of the help paying that might be available. Some people in the Bronze plan cannot afford their share thus cannot afford to use the coverage. Remember none of the plans cover all of the cost.

Once you reach age 65, you must go on Medicare unless you or your spouse is working for a company with 20 or more employees. When you retire or lose coverage, you get a special enrollment period to get coverage. Everyone already on Medicare has open enrollment every year between Oct. 15 and Dec. 15. This is when you select your coverage for the next calendar year. Ninety-eight percent of all people on Medicare have some kind of supplement because it is an 80/20 plan with a number of deductibles.

Make sure you have a plan to deal with health care cost at every age. Be sure to have sufficient emergency money to meet any out of pocket expenses. Health care is very important in living a long and happy life.

Gary Boatman is a Monessen-based certified financial planner. He is the author of “Your Financial Compass: Safe passage through the turbulent waters of taxes, income planning and market volatility.”

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