Monday, February 20, 2017

Health Coverage Under Obamacare -- how to not be able to buy insurance

My son recently turned 26 and is sorting out health insurance (made worse because the anticipated health benefit through his job doesn't count as "creditable coverage" under the Affordable Care Act). In researching insurance options I learned something interesting about individual health insurance coverage.

There was a time when you could go out and buy health insurance on the open market. Since this wasn't part of a group plan, you could sign up whenever you wanted. You might have been part of the "uninsured" for a while, for whatever reason, but you could always become part of the "insured."

Now we have the Affordable Care Act, aka Obamacare. The whole point of the law was to reduce the number of uninsured. All well and good, but what happens if you're really uninsured? Instead of being able to buy insurance when you want, you can only buy during the "open enrollment" period in November (give or take). Outside the open enrollment period, you can only buy insurance if some specific event occurs, basically the same events which let you change employer provided insurance during the year.

I can understand part of the reason for open enrollment. Since Obamacare doesn't allow you to be penalized for pre-existing conditions, something needs to be done to prevent people from not signing up for insurance until they get sick. Still, the limited signup periods also have the effect of messing up people who, through no fault of their own, find themselves without coverage during the wrong part of the year without one of the acceptable excuses life events.

In my son's case, if his job had started a few weeks later (90 days until benefits kick in) or his birthday was a bit earlier he could have found himself out of luck because he was anticipating a benefit the job didn't provide.

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