Decision Time on Insurance

Practitioners wade through Affordable Care coverage options to meet the new law’s requirements.

November 2, 2013

For three years, Sylvia Campa of Keller Williams Realty has been without health insurance. Her Santa Rosa, Calif., market had been hit hard by the downturn and although sales have improved, keeping health coverage for her children through a state program is all she can manage. “I had to make a choice,” she says. “It was either pay $600 to $700 a month to have insurance as an independent contractor or go without, and I chose to go without because I chose to pay my mortgage.”

The open enrollment period for the federal government’s new health law, the Affordable Care Act, started Oct. 1 and Campa is planning to purchase coverage for herself and her children on her state’s exchange. She’s found a policy that’s more affordable than what she would pay otherwise for family coverage when she factors in the law’s premium credits, which reduce the cost of insurance for eligible households. “After reviewing the plans, I found that we qualify for a fairly large credit. So I can now put myself and the children on the insurance and it’ll cost me under $300.”

Not everyone has found insurance on their state exchange that meets their budget. Based on a query REALTOR® Magazine posted on Facebook in early October, about a dozen of the roughly 50 respondents said the coverage they found was more expensive or had less favorable terms than their current coverage. About half a dozen said they found better or cheaper coverage. The rest did not specify whether they found better or cheaper coverage.

Darcie Alexander of Oregon First Real Estate in Portland, Ore., says she found more affordable coverage on her state’s online exchange than when she was covered under an individual plan several years ago, but she doesn’t plan to change her coverage because last year she went on her husband’s plan, and that’s less expensive than what she found on the exchange. “But I noticed that the plans on the exchange were quite a bit better than the private plan I was on before,” she says. “Lower deductible, lower out-of-pocket maximums, and lower monthly rates.”

Under the law, everyone must have health coverage or face a penalty unless they meet one of the law’s exceptions, including financial hardship, defined as spending at least 8 percent of your income on insurance. The requirement takes effect in 2014. If you don’t meet one of the exceptions and decide not to buy insurance, the penalty is 1 percent of your household income or $95 for each uninsured person in the household, whichever is greater, although you’ll never pay more than the price of the lowest-priced plan on the exchange. 

Households with income of up to 400 percent of the federal poverty level (about $96,000 for a family of four) are eligible for premium credits. To be eligible, the insurance has to be available on your state exchange, even if you don’t purchase the policy on the exchange. NAR has launched a private exchange, called the REALTORS® Insurance Marketplace, and is working with SASid to operate it and provide help on selecting plans that meet the law’s requirements.

Depending on your state, expanded Medicaid insurance could be an option for coverage as well. As part of the new law, Medicaid was expanded to make its coverage available to households earning up to 138 percent of the poverty line, about $38,000 for a family of four, but it’s up to each state to adapt its Medicaid program to the new criteria. As of late 2013, about half of states have done so.

Robert Freedman

Robert Freedman is the former director of multimedia communications at NAR.