Written By: Alex Hammersley, CPA

For those under the age of 65, the Affordable Care Act (ACA), also known as “Obamacare,” can result in serious savings on health insurance. For some background, here are a few key provisions provided by the ACA, enacted in 2010:

• Health Insurance Marketplaces: The law establishes health insurance marketplaces where individuals and small businesses can compare and purchase private health insurance plans. These marketplaces, also known as exchanges, provide standardized information on available plans, including coverage options and costs.
• Medicaid Expansion: The original Obamacare expanded Medicaid eligibility to cover more low-income individuals and families. However, a Supreme Court ruling in 2012 made this expansion optional for states, leading to a patchwork of Medicaid coverage across the country.
• Essential Health Benefits: Insurance plans offered through the marketplaces are required to cover essential health benefits, including preventive services, maternity care, prescription drugs, and mental health services. This ensures that all plans provide a minimum level of coverage.
• Pre-existing Conditions: ACA prohibits insurance companies from denying coverage or charging higher premiums based on pre-existing conditions. This provision ensures that individuals with health issues still can access affordable insurance.

How It Works

The ACA health care savings depends on the amount of income you earn in a tax year. The more income you earn, the less healthcare savings you receive. The income counted towards calculating the savings on your health insurance includes wages, 100% of Social Security income, interest, including tax-free interest, dividends, capital gains, pensions, IRA distributions, and any other forms of income reported on your tax return. 

Strategy

At Carlson Financial, we can provide income and insurance planning to maximize savings on your yearly healthcare costs with the ACA. An effective income strategy is to take retirement distributions from your brokerage account or Roth IRA so that your recognizable income stays as low as possible to yield the highest possible savings on your health insurance. Another strategy is to take policy loans from any existing and eligible life insurance policies because these transactions are not recognized as income under the ACA. 

Resource

To see if you can save under the ACA, go to the following link: https://www.healthcare.gov/see-plans/#/. Once you type in your information and income, this site will give you a slew of insurance plans to choose from. Some states have their own ACA website, and HealthCare.gov will provide a link to your respective state’s website once you type in your zip code.

Have any questions? That’s what we’re here for! Call us at 844-227-5766 today!

Say What?

A McDonald’s cashier who started working at the fast-food restaurant as a single mother in the late 70s, recently served her last drive-thru customer. Dot Sharpe recently retired at age 84. When she started working for McDonald’s in 1978, a small order of fries cost 35 cents. 

This week in history

1945 – The US flag was raised on Iwo Jima, and the iconic image was captured by photographer Joe Rosenthal. 

1980 – US hockey team beats the Soviet team in the “Miracle On Ice.”

1980 – The first (and only) Best Disco Recording was given to Gloria Gaynor for “I Will Survive.” After years of disco dominating the musical landscape, the National Academy of Recording Arts and Sciences gave the green light for a new Grammy Award for the genre, just as the musical style was preparing to die.

What did it cost? 

Postage stamps

1974 – A postage stamp cost 10 cents

2004 – A postage stamp cost 37 cents

2024 – A postage stamp costs 66 cents