By Barbara Peters Smith
Originally Posted On May 22, 2013
You may have lost that loving feeling for your job, but still show up every morning, partly because it’s so hard to get health insurance you can afford on your own.
Nearly 48 percent of Americans between 55 and 64 have at least one pre-existing condition that would make it hard for them to buy health insurance, according to "Worry No More," a report from the health advocacy group Families USA. Even if you don’t have such a medical issue, your age alone can make a policy’s cost forbidding and cancellation threats a constant.
Obamacare and Job Mobility
But starting in 2014, as a result of the Affordable Care Act (aka Obamacare), you may find it quite a bit easier to quit your job and buy health insurance.
Much of the public discussion about that law has focused on healthy, younger Americans. If all goes as planned, though, people in their 50s and 60s will find it much easier to slip their ties to the corporate world and find affordable coverage that can’t be denied due to a pre-existing condition.
“This guarantee is just essential, so people can plan and be protected when they leave a job,” says Cheryl Fish-Parcham, deputy director of health policy for Families USA, a strong backer of the Affordable Care Act.
Despite lingering political resistance to Obamacare, it’s becoming increasingly difficult to derail the coming changes mandated by the health care reform law. The insurance industry has already begun gearing up to sell policies to individuals through government-run exchanges starting in January 2014.
Outlook for Health Premiums
Insurers will likely focus their marketing efforts initially on young people without health coverage. If enough of them enroll, that will broaden the insurance risk pool and result in lower costs for older Americans hankering to leave their workplaces.
Exactly how much health premiums will fall is anyone’s guess at this point. But when insurers offer individual policies through online exchanges, older Americans will have one clear advantage.
Today, premiums for a 64-year-old are typically five times higher than for a 19-year-old. The health reform law will lower that differential, capping it at 3 to 1, which means younger Americans will pay more than they do now and older people will pay less.
Will You Get a Premium Subsidy?
Another potential bonus: If you wind up taking a cut in income to start your own business or begin an encore career, you may be eligible for a health insurance premium subsidy, Fish-Parcham says.
The Henry J. Kaiser Family Foundation’s website has a tool for calculating this possibility, known as the Health Reform Subsidy Calculator. You plug in what your age will be in 2014 and how much you expect to earn and the calculator estimates the cost of a policy and the size of a government tax credit you could receive to help pay for it.
The estimates are “simply an illustration” of how the formula will work, Kaiser spokesman Chris Lee says.
What Health Exchanges Will Offer
Definitive pricing information for health insurance policies sold through federal exchanges isn’t expected until late this year. But those policies will be required to cover at least 60 percent of all health care costs for a typical enrollee.
The health exchange policies will be required to include what are known as “essential health benefits” (ambulatory and emergency care, hospitalization, maternity care, mental health and substance abuse treatment, prescription drugs, lab tests, rehab, chronic disease management and dental and vision care for children).
What We Still Don’t Know
There’s still a lot we don’t know about this brave new health care environment and the degree of workplace mobility it will allow, though we’ll learn more as the year progresses.
It could turn out that what you pay for a health insurance policy will depend on whether your state has its own exchange and the health of others sharing your risk pool.
The volatile political climate could also affect health reform’s rollout. “There may be some noise about delaying certain provisions this year,” Fish-Parcham predicts.
Meanwhile, if you’re considering an escape from your current job and its benefits, remember to factor in the Affordable Care Act’s capacity to help you become a free agent. Those recurring daydreams about launching your own yarn shop or consulting firm might not be as soft and fuzzy as they now seem.
Barbara Peters Smith is the health and aging reporter for the Sarasota Herald-Tribune and the John A. Hartford/MetLife Foundation Journalism in Aging and Health Fellow.