Your Questions About the Affordable Care Act

I can’t take it anymore. I just can’t take the lies and misinformation out there about the Affordable Care Act (ACA) and healthcare reform. Nearly ever  time I tell someone something about the Act, or answer a question, they are surprised at how the truth differs from what they’ve heard.

To that end, I put out the word to friends and others to send me their questions about the ACA. Here’s the first batch. If you have any questions, send them on. I’ll keep answering them until we run out.

Question: Are the insurers currently participating in the system locked in on Jan 1st? Can they decide to pull out during the year?

Answer: If they decide to participate in the exchanges they must provide coverage for the year so no, they can’t pull out during the year. The only reason they can cancel your coverage is if you lie on the application.

Question: How will income be calculated?

Answer: Based on adjusted gross income (AGI), which includes certain deductions. Note that income is based on your household income, not individual, and that it is based on estimated income for the following year. If you estimate wrong and received a subsidy, you’ll have to settle up with the IRS at tax time.

Subsidies are available to those with household incomes between 100 and 400 percent of the federal poverty level (higher than you might think). See where you fall here.

Question: Will the premiums (subsidized or not) still be fully deductible?

Answer: Sure, just as it is today — if your total medical expenses (including premiums) are above 10 percent of your AGI. Of course, you also need to itemize your deductions at tax time.

Question: Why do the Republicans want to strangle the act/law by defunding it through the budget negotiations and are holding our government and people hostage?

Answer: If I knew the answer to that I would be also be able to turn water into wine.

Question: Why do so many of the American people think the act is a job killer?

Answer: Because that’s what they’ve been told. The reality is that more jobs have been created since the ACA was passed, primarily in full-time positions. That’s not my opinion, that’s from September’s Bureau of Labor Statistics monthly report.

Question: What happens if there are no health exchanges in my state or my governor refuses to expand Medicaid to provide access?

Answer: The federal government is running exchanges in states that refused to run their own. If a state did not expand Medicaid, then those individuals who do not qualify for Medicaid can shop on the exchanges. However, since the law assumed the Medicaid expansion, there are no subsidies available for people with incomes below 100 percent of the federal poverty level. Hopefully, that glitch will be fixed with future legislation (assuming we can ever Congress to work again).

Question: It looks likely that some states will have substantially elevated premium increases when the health exchanges are put in place, while other states are reporting that they expect only minimal (or no) rate increases compared with existing prices. Why is this?

Answer: I’m not sure what you mean by “substantially elevated premium increases.” Are you referring to the cost of insurance on the exchanges? If so, then the majority of people purchasing insurance on the exchanges who already had individual insurance should see their premiums drop substantially given that they can no longer be charged premiums based on gender or pre-existing conditions. We’ve already seen this in New York.

individual premiums have always been high because people typically only purchase insurance when they need it, ie, when they’re sick. By mandating coverage, insurers now have premiums from healthier people that will help bring down the cost of insuring sicker people.

In addition, estimates are that between 80 and 90 percent of people shopping on the exchanges will be eligible for subsidies. A report last week from the department of Health and Human Services estimated that about 6.4 Americans purchasing health insurance through the exchanges will pay less than $100 a month, thanks to subsidies. Add in other expanded insurance programs like Medicaid and the Children’s Health Insurance Program (CHIP) and that number jumps to about 20 million currently uninsured people.

A recent analysis from the Kaiser Family Foundation found that most of the 18 exchanges evaluated have three or more insurance companies participating, and that while premiums will vary across the country, they “are generally lower than expected.”

What is clear is that the more health insurers that participate in the exchanges, the lower the premiums (thanks to price competition).  Some large insurers have a adopted a wait-and-see approach regarding the exchanges. Experts predict they’ll jump into the pool next year.

Question: How can a person find out what to do if they are self-employed?

Answer: You can get help navigating the exchanges online, in person, or on the phone. Just visit, enter your state, and you’ll be directed to your state’s exchange (or the federal exchange), which will have information on navigators.

8 Responses to “Your Questions About the Affordable Care Act”

  1. Anne

    This is really helpful, Debra, thank you. Thanks also for answering my questions! One clarification: the question about tax-deductible premiums. What about for the self-employed, who can currently deduct 100% premiums “above the line” before AGI is calculated (line 29 on 1040)? This is independent of the itemized medical costs. I’m wondering if this could potentially be a circuitous equation, because one would have to know the cost of next year’s premiums to be able to estimate line 29 to obtain the modified AGI … which will be used to calculate whether the premium will be subsidized… Hope that makes sense!

    • Debra Gordon

      Hi, Anne.

      I think you can still deduct the premiums if you’re self-employed. Doublecheck with your accountant, but I’m nearly 100 percent sure.

  2. Heather A. Spears

    As a part of the Healthcare Reform Center & Policy Institute, ( I have come across the same sense of misguided, misinformed, and mismanaged information out there. So many individuals, it seems, don’t know where to go for the facts. Since hearing the National Practice Leaders and Employee Benefit Attorneys that are in the trenches of healthcare reform educate our students, I have felt better that the truth has become obtainable. Thank you for your article!

  3. Rebecca

    You stated that income is based on household income, not individual. My 30 year old son lives with us because he makes minimum wage and cannot afford to live on his own at this time. It seems unfair that his eligibility is being based on our household income. A subsidy would help him have more disposable income that he could use to be out on his own.

    • Debra Gordon

      Hi. He’s not a dependent, so he should only put in his OWN income. If he were married, that would be household income. He should be eligible for a major subsidy.

  4. Ken Rossi

    Is it true that labor unions want an exemption from the ACA and Congress recently exempted themselves and their staff from the ACA? If true then I find this to be very disconcerting since I believe labor unions and Congress (at least the Democrats) were ardent supporters of the ACA.

    • Debra Gordon

      Labor unions are NOT exempt from the ACA. However, the ACA does provide for the possibility of exempting “certain self-insured, self-administered plans” from the law’s temporary reinsurance fee in 2015 and 2016. This is the so-called “belly button” tax. See this story.

      Meanwhile, the ACA Aincludes a provision that would require members of Congress (and their personal staffs) to get their insurance on the small business (SHOP) exchanges. The federal government will still contribute the employer share of the cost that it’s been contributing, and Congress and their staffs are not eligible for any subsidies.


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