The Uninsured Musician’s Guide to The Affordable Care Act

October 16th, 2013 by

According to one survey by The Future of Music Coalition, about 43% of artists and musicians currently lack health insurance. This is roughly 2.5x higher than the average national rate.

It seems natural to assume that as musicians and freelance creative workers, we’re going to be among those who are most affected by the new reforms around health care.

As of 2014, many of us will not only be able to afford health insurance for the first time, most of us will be required to buy it, or face a small tax for choosing to forgo the stuff.

The Insurance Store is Now Open

Despite the ongoing gridlock in Congress, the new Health Care Exchanges opened on October 1, 2013. This allows all of us to begin comparison shopping for health insurance – and to see if we’re eligible for any kind of Federal subsidy towards buying it.

Although the Federal exchanges had some trouble keeping up with the unexpectedly huge amount of traffic that flooded their servers in the first days, they’ve been getting progressively more stable.

The Economist reports that “glitches may be short-lived. Officials and contractors are rushing to fix them. New York’s exchange seems to have recovered. In one week it quadrupled the capacity of its computer servers, and as of October 8th more than 40,000 New Yorkers had signed up for coverage. But other exchanges are making slower progress.”

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Earlier this week, I finished my own application, and was up in no time, comparing the cost of new plans on the New York State exchange. If all goes well, I’ll soon have insurance for the first time in a decade.

To get started yourself, visit https://www.healthcare.gov. I found that the entire sign-up process took about 1/20th the time of doing my taxes. It may not be instant, but it was over a lot sooner than I expected – even with freelance income to account for.

Who Can Expect Big Changes (And Who Will Be Unaffected)

If you’re one of those rare musicians, engineers or producers who already gets health insurance through an employer, don’t even worry about the exchanges. You don’t have to do a thing.

If you’re covered by Medicare or Medicaid, you’re already all set too. If you’re a young person on your parents plan? Cool. Now you can stay that way til you’re 26.

If you already pay for your own insurance and like it just fine, you may want to check out the exchanges anyway. There’s a good chance you’ll end up paying less, particularly if you’re young, have a pre-existing condition, or if you don’t make a ton of money.

For those who have been unable to afford healthcare in the past, there’s a good chance that’s going to change now.

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How Much Do the New Plans Cost and What Do They Cover?

Caduceus.svgFor most musicians and younger people, the new plans are likely to cost less and cover more than what they’re used to seeing. For many others, prices may stay about the same.

If you make anything under $46,000 each year, chances are you’ll also qualify for subsidies that could dramatically reduce what you pay out of pocket.

Coverage plans start with the “Catastrophic” tier, which is now available in high-cost areas like New York City for as little as about $180 a month. (In less expensive states, like Virginia, a similar plan now costs as little as about $40 a month.)

If this sounds like a lot of money to you, chances are you haven’t shopped for insurance before. In my own fruitless attempts to find affordable health insurance over the past decade, I’ve generally found plans that cost almost twice as much and seem to cover even less than these do.

The “Catastrophic” plans, which are available only to those 30 and under, will usually have high deductibles – meaning that if you have a major health emergency you’ll have to pay out over $6,000 in costs out of pocket before insurance kicks in. This is no good for anyone who anticipates recurring medical costs, but it could be a great option for otherwise healthy young people.

Still, even these kinds of plans also offer more coverage than you might expect. Under the Affordable Care Act, annual checkups, major vaccines, essential screenings and many women’s health services are now included in the cost of the plan.

The next level of coverage, the “Bronze” plans, start at about $300 here in New York, depending on your age. These plans offer lower deductibles, prescription plans, copays for doctor’s visits and the like.

(Once again, the quoted prices here in New York City are very high compared to the rest of the nation. If you live outside the big cities where so many of our readers are located, please hit the exchanges yourself for more accurate pricing. In less expensive states, plans may cost 1/5th as much.)

In New York City, “Silver” plans start closer to $360, and get you quite a lot of coverage: Copays of $30 for doctors visits and $10-$70 for prescriptions. Even significant services or medical procedures may carry copays of just $50-$100.

After that, you’re looking at “Gold” and “Platinum” plans, which start at about $400 and $450 in New York, and range all the way up to around $850 for a single adult.

Again, copays and deductibles go down – this time to as little as $0. Once again, exact prices may vary significantly depending on age, location and certain risk factors. For exact pricing, the best thing you can do is check out the exchanges for yourself.

If you can afford them, these plans are a great idea for families, older people and those with regular medical expenses.

You Might Not Pay Full Price

What if I said you could take these sticker prices and chop them in half? Well, if you’re making significantly less than $46,000/year, that may be the case for you.

For instance, a 30-year-old making $35,000/year might expect a monthly subsidy of over $100/month, effectively reducing his or her cost out-of-pocket for a Bronze plan by 33%.

A person making even less might spend as little as $130 for a Silver plan, even in New York City.

Those of you who live in other areas might pay next-to-nothing, even without qualifying for a government program like Medicare or Medicaid. (Which incidentally, have recently been expanded.)

Many more of those who make very little income will now be eligible for Medicaid, the government-assisted health program. In New York, the cutoff is now at about 133% of the Federal Poverty rate. That’s about $15,800 a year for a single person, or $32,500 for a family of four.

Opting Out of Health Insurance Will Cost You (But Not Much)

The other big part of the Affordable Care Act is the “mandate.” This means that if you don’t buy healthcare to help support what is essentially a volume discount for Americans across the board, you will have to pay a small tax to help offset the cost that your uncovered risk adds to the system.

If you could plausibly afford health insurance but choose to go without it anyway, you’ll eventually have to pay a fee of $695, or 2.5% of your income, whichever is greater. But that doesn’t really kick in until 2016. The opt-out fee for next year is comparatively slim.

In 2014, if you make over $9,500/year and don’t otherwise qualify for a “hardship exemption,” you’d only have to pay $95, or 1% of your income if you decide to go without health insurance. In 2015, that fee ramps up to $325 or 2%. Only in 2016, does the full fee finally kick in, should you choose to forgo insurance altogether.

You Still Have Some Time (But Not Much)

If you’re currently uninsured but haven’t checked out the exchanges yet, now is the time to start.

If you want to have your coverage kick in by January 1st, 2014, you’ll have to decide on a plan and make your purchase by December 15, 2013 at the latest. Get moving, because that’s just two months away.

You can delay just a little bit longer if you’re not ready to take the plunge. Those who are uninsured for less than three months in any given year get to avoid paying any opt-out fee. So, if you want your plan to kick in for March, 2014 and avoid paying any fee, that means you have until February 15th, 2014 to sign up and buy your plan.

At the end of March, 2014, the exchanges will close for the year, and you’ll have to wait for the next window in the fall of 2014 to shop for coverage.

(Why do the exchanges close? So that people can’t wait until they’re sick to sign up for coverage. Purchase windows like these have been common throughout the health insurance industry for some time.)

There’s Help If You Need It

Health insurance plans now come with extra coverage, lower prices, and for those who make under $46,000, Federal subsidies to help make them more affordable.

But those aren’t the only perks. Federal and State governments also have trained healthcare “Navigators” to help regular people find their way around this new system.

For personal assistance, in person or over the phone, visit healthcare.gov or call toll-free at 1-800-318-2596.

For local assistance in New York, visit nystateofhealth.ny.gov or call toll-free at 1-855-355-5777.

One more good resource is the Kaiser Family Foundation, a nonprofit that focuses on major health care issues and gives good written and video primers on the new law (below), and how it effects you.

The Politics of The Affordable Care Act

For one reason or another, The Affordable Care Act has become a partisan lightning rod. On a purely logical level, this is difficult to understand. Of all the bills in recent years, one would imagine this one would get the most bipartisan support.

The reality is that the Affordable Care Act (aka, “Obamacare”) is intended to be a market-based solution. The principle of the act was originally advanced by folks like the American right, including the conservative think tank, Heritage Foundation, former Republican House Speaker Newt Gingrich, and former Republican Presidential candidate, Mitt Romney.

The idea was eventually picked up by Democrats like President Obama as a politically feasible alternative to a tax-based single-payer system, which is unlikely to ever fly in the market-focused USA. The law was then passed by both houses of Congress, and later upheld as Constitutional by a largely conservative Supreme Court.

In a saner political environment, a law like this one might be perceived as one of the great bipartisan compromises of modern history. Unfortunately, that is simply not the case at this moment. But as the exchanges open, and millions of Americans – musicians, artists and freelancers especially – are able to find affordable coverage for the first time, that legacy may change. I was personally surprised to find myself looking at health insurance I could afford for the first time in my adult life. Only time can tell if it will stay that way, and if the tradeoffs presented by the law prove worthwhile.

But don’t take my word for it. Go on the exchanges today and decide for yourself. If, for some reason, you don’t like what you see, you can always opt out and check back in the future. With any luck, basic health care costs should continue to go down over the years as the bargaining power of consumers goes up. That’s the idea, anyway. We’ll see what history has in store.

Happy hunting – and stay healthy.

Justin Colletti is an audio engineer, educator and journalist.

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