YOUR MIND ON MONEY: Everyone should educate themselves on ACA

2013-09-26T07:57:00Z 2013-09-26T16:48:15Z YOUR MIND ON MONEY: Everyone should educate themselves on ACAF. Marc Ruiz Times Business Columnist
September 26, 2013 7:57 am  • 

In my experience, few topics elicit as much emotional response as the Affordable Care Act, otherwise known as Obamacare.

Love it or hate it (there doesn’t seem to be much in between), the first major consumer initiative of the new plan rolls out Oct. 1 in the form of the new health insurance exchange marketplace.

From what I’ve seen so far, I think everyone will need to begin educating themselves on this program, and even those who get their insurance through their employer will need to pay attention. With employers such as UPS, IBM, Walgreens, Trader Joe’s, Home Depot and others already announcing some level of employee or retiree coverage changes, the writing is on the wall.

In my opinion, the two most major consumer issues are the advent of the government subsidized premium and the elimination of the coverage restrictions for those with pre-existing health conditions.

While neither of these changes will actually begin until Jan. 1, the online exchange marketplace will begin listing prices for these unrestricted, subsidized health insurance plans on Tuesday.

In the meantime, the Kaiser Family Foundation has a coverage cost simulator on its website – While the costs are openly advertised as a rough estimate, I did some simulations to get my expectations in line.

I simulated costs for my family of six using what will be called the bronze plan. The simulator indicated my monthly cost (unsubsidized of course) would be about 8.5 percent higher than we pay now (not bad), but at the same time the new plan also would involve an out-of-pocket maximum amount if one of us gets sick nearly 70 percent higher than we have now (ouch). While there may be additional benefits on the new bronze plan, it will be hard to justify the dramatically higher potential out of pocket costs.

One of the places I was really hoping this new program might make a difference is in the early retirement market. It is not uncommon for individuals retiring before the Medicare eligibility age of 65 to have a pre-existing condition, which often makes it difficult or untenable to get health insurance coverage, making early retirement impossible. The new law will solve the pre-existing condition issue.

So I simulated a couple both age 62, with $72,000 in household income. Using the bronze plan the monthly premium (also unsubsidized) was estimated at more than $1,100 per month with an out of pocket maximum around $13,000.

In my experience, this premium is simply too high. Early retirees understand health insurance will be expensive, but most will be intimidated by this sticker price.

I’ve tried to remain open-minded about this potential new planning tool, but the closer it gets and the more I learn the more discouraged I become. Stay tuned.

Opinions are solely the writer's. F. Marc Ruiz is a local investment strategist and co-host of "Your Mind on Money" at noon Mondays on WLPR-FM 89.1 The Lakeshore. Reach him at

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