MONEY Kids and Money

The Real Price of Having a Baby

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Image Source—Getty Images

The hospital where you give birth plays a huge role in how much you'll pay out of pocket.

Which hospital parents pick to deliver their baby can have serious cost consequences, according to a new study.

Hospital costs for women who had no maternal or obstetric risk factors to complicate childbirth ranged from less than $2,000 to nearly $12,000, the analysis of discharge data found. The wide variation in cost means that for expectant parents, it can pay to shop around.

The variability was surprising, says study co-author Dr. Jessica Illuzzi, an associate professor of obstetrics, gynecology and reproductive sciences at the Yale School of Medicine.

“We limited our sample to low-risk women, a uniform group, so finding that variability” was unexpected, she says.

The study, published this month in Health Affairs, analyzed data from 267,120 births at 463 hospitals that were collected from the 2011 Nationwide Inpatient Sample, part of a project sponsored by the federal Agency for Healthcare Research and Quality. Estimated average hospital childbirth facility costs per maternity stay ranged from $1,189 to $11,986, with a median of $4,215. The figures did not include professional fees for obstetricians, midwives or anesthesiologists, who generally bill separately for their services.

Since consumers increasingly face high deductibles and increased cost sharing for medical care, giving birth at a high-cost hospital could add significantly to their out-of-pocket costs, Illuzzi says. Some government agencies and other organizations now report data related to childbirth, including cesarean delivery rates and details about delivery costs and charges by hospital.

The federal government’s Hospital Compare website reports the percentage of pregnant women who had elective deliveries one to three weeks early that weren’t medically necessary.

The study found that hospitals with higher rates of cesarean deliveries, among other factors, were more likely to have higher facility costs. Hospital rates of cesarean delivery for low-risk births varied widely, from 2% to 39%, the study found.

According to the study, pricier care didn’t necessarily lead to better outcomes. Hospitals with higher estimated costs were significantly more likely to have serious complications among low-risk childbirths.

The study notes that adding professional fees to the cost estimates and including newborn care in addition to maternal care might result in different cost patterns than those found in the study.

Nearly 4 million children are born each year, and childbirth is the No. 1 reason for hospital admissions.

“There’s so much attention being paid to the cost of care today, but little attention is paid to maternity costs, the leading cause of hospitalization,” Illuzzi says.

Read next: Is it Cheaper to Have a Baby When You’re 26 or 36?

Kaiser Health News (KHN) is a nonprofit national health policy news service.

MONEY Debt

Living Out of a Suitcase Was The Best Thing for My Family’s Finances

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Richard Drury—Getty Images

Friends were shocked when we told them we were selling everything and moving from one country to the next, but we wouldn’t have it any other way.

The year was 2013, and by all outward appearances, my husband, William, and I were living the good life in St. Louis.

He was finishing up his MBA and had an internship at a well-known consumer-products company that was sure to put him on the corporate fast track—all while running his own successful tutoring and test-prep business on the side.

I was juggling getting my Ph.D. in reproductive epidemiology while also being a mom to our pride and joy, Desmond, then 2.

But during William’s last semester in the MBA program, our family took a life-altering trip to Spain as part of his study abroad offering. What was just supposed to be a three-month trip overseas turned into two years … and counting.

Since then, we’ve lived and worked in five different countries, from Hungary to Peru—and have even added to our brood along the way.

Our nomadic lifestyle may seem a bit unorthodox to some—family and friends were shocked when we told them we were selling all of our belongings to pack up and ship out—but we wouldn’t have it any other way.

The best part? It’s done wonders for our finances.

Truth be told, the career and life paths we’d always envisioned for ourselves weren’t quite panning out.

Despite the fact that most business students would have killed to have William’s internship, he was disillusioned by corporate life.

The monotony of his day-to-day routine coupled with having to work for someone else, just didn’t feel natural to him. He wanted something more.

I was feeling a similar dissatisfaction. I’d been working on my Ph.D. for almost five years, and continuing my research while caring for a little one left me struggling to maintain motivation. I was gradually falling out of love with academia.

All of this prompted William to pose a question before we embarked for Spain for his study abroad program: What if we didn’t come back to the states at semester’s end?

What if we stayed in Europe for a few more months—one last hurrah before putting down roots?

I thought he was crazy.

We had a toddler and a mountain of debt—more than $100,000 in student loans between us, a $25,000 business loan, and about $6,000 of credit card debt. We couldn’t go gallivanting around Europe like carefree college students.

But when I saw he was dead serious, it stirred something in me. I couldn’t help but feel like maybe this could be an amazing adventure for our little family.

So we got out of our lease, moved our stuff into storage, and found an apartment in Barcelona through Airbnb for $1,200 a month—not supercheap, but still less than the $1,500 we were spending to rent a home in St. Louis.

Once we settled in Spain, William had yet another crazy idea: What if we never went back and instead built out his tutoring business overseas?

We had both been employees of the company back when we lived in Salt Lake City, and when the opportunity arose, the entrepreneur in him decided to take out a business loan to buy the company from its previous owners.

When we moved to St. Louis for his MBA program, William continued to manage the business remotely, hiring two codirectors to oversee the roughly 15 tutors we employed back in Salt Lake City. He drew a salary of about $35,000—but being abroad made us realize there was an even greater opportunity to make money.

William could meet with international schools throughout Europe and pitch them our services, in which one of our tutors would spend a few weeks doing SAT/ACT prep at their schools to help students who wanted to attend college in the U.S.

I believed in the plan, but the thought of living in—not just visiting—so many different countries terrified me. But if we were going to try this, it was now or never.

So I put my Ph.D. on hold and became our family’s Chief Travel Officer.

5 Countries, $300 Rent, $0 Credit Card Debt

We stayed in Barcelona for about five months, taking in the culture, loving every minute—and mapping out our next destinations based on whether there were international schools close by, our interest in the region, and the cost of living.

Our next, three-month stop was Budapest, Hungary, which was a much cheaper place to live. By avoiding renting in a tourist area, we were able to get a great apartment for just $300 a month.

It was then that I realized how living abroad could actually be good for our finances because, if we planned well, life could be so much cheaper.

When the holidays rolled around, we headed back to St. Louis to sell all of our personal belongings and officially leave our U.S. life behind. But, first, we made a pit stop in Rome—which is when we discovered that our second baby was on the way!

Giving birth in a safe place where I felt comfortable, was important to me, which is why we chose to live next in Colombia. I was born there and still had family there, so it was comforting to know we’d have some support.

After finding a fully furnished apartment in Bogota for $900, we headed out there in February 2014—and welcomed our second son (named Roman, in a nod to Italy) in the spring.

We didn’t have international health insurance at the time, so we paid out of pocket for the birth, which only added up to $1,800, including all of my prenatal visits. Since then, we’ve gotten family coverage for just $200 a month.

In the eight months that we were in Bogota, William took countless meetings, nabbing new contracts and growing the business even more. He gradually increased his salary to about $45,000 a year, and the company helps subsidize such expenses as flights for business meetings, as well as our rent. I also brought in occasional income by doing some freelance research and public-health data analysis on the side.

While we don’t get a tax break from living abroad—we still have to file U.S. income taxes—we do get some tax write-offs for any business-travel-related expenses we have to cover.

This new life has allowed us to get our $6,000 credit card balance down to zero last year—and pay off our $25,000 business loan.

And while chipping away at our student loans will be a slower endeavor, we’ve been able to contribute to a 529 college savings account for Desmond, open a trust account for Roman, and maintain an emergency savings fund of about $2,000.

Our next goal will be to resume contributions to a Roth IRA, which we’d put on hold during graduate school.

Living frugally, of course, helps a lot. For starters, we always opt for cheap housing, even if it means choosing less-prime neighborhoods. Our rent abroad—including furnishings, WiFi and utilities—has averaged $1,000, which is about $500 less than what we were paying in St. Louis.

But, without a doubt, our biggest savings has come from no longer having to pay for gas, insurance and repairs for two cars—we quickly familiarize ourselves with public transportation in every new city. I also do a lot of cooking at home, using seasonal and local ingredients as much as I can, to save money.

In cities where the cost of living is higher, we keep stricter tabs on our expenses, so we know when we’re close to going beyond our budget. Plus, living out of suitcases means we can’t accumulate much stuff—so no extravagant shopping sprees for us!

These frugal habits have accompanied us in the five countries we’ve lived in—Spain, Hungary, Colombia, Peru and Mexico—and the dozens of places we’ve visited. We’re currently back in Bogota, but it’s off to Japan next to build an East Asian client base.

The Intangible Perks of Our International Life

One of my initial concerns with living abroad was how the kids would adjust, but they’ve taken to the nomadic life with ease.

Desmond has attended four different preschools, and in just a few short months, we’ll enroll him in an all-Japanese kindergarten. Once he gets to first or second grade, we plan to home-school because we know international schools can get very pricey.

In our opinion, these experiences have helped shape Desmond into an outgoing, fearless kid—not to mention that he now speaks Spanish fluently!

People ask how long we plan to keep up our gypsy lifestyle. The honest answer: I’m not sure. There are times when I think I’d love to own a permanent home, but then I look around and realize that we’re living most people’s once-in-a-lifetimes.

We’ve spent the past few years marveling at Machu Picchu, taking overnight train rides through Transylvania, and braving the outdoor markets of Santiago.

We may not be millionaires, but we also aren’t struggling. When we started this journey, the company had one international class. We have 11 classes starting this fall, and even more in the works for the spring semester—which has more than doubled our profits.

Over the last few years, my most fulfilling memories have been watching my children play with kids who speak different languages and hold different beliefs. I’ve also come to realize that the best memories happen when you’re willing to surrender a little control and embrace the unexpected.

At the very least, what our nomadic life has taught us is that when we finally do settle down, we won’t need a great, big house with a fancy car to be happy. I’ve learned that you don’t need to have a permanent address to feel like you have a home.

–As told to Maryanne Hayes


More From LearnVest:

 

MONEY Medicare

Why You Should See a Dentist Before You Retire

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Peter Dazeley—Getty Images

Most seniors pay for dental care out of pocket.

If you plan to retire soon, add this item to your to-do list: a visit to the dentist before your dental insurance disappears.

Retirees transitioning to Medicare are often surprised to learn that the program does not cover routine dental care or more complex procedures.

Overall, 40% of the 65-plus population has some form of dental benefit, according to the National Association of Dental Plans. For seniors who use Medicare Advantage managed care plans, about half offer very limited coverage for cleanings and exams. A small percentage of seniors have dental insurance from a former employer, and Medicaid covers dental care for low-income residents in some states, although benefits vary. Some buy individual commercial plans or have coverage through an association such as AARP.

But most seniors just pay for dental care out of pocket – the mean expense for Americans age 65 and older was $870 in 2012, according to the Agency for Healthcare Research and Quality, a research arm of the U.S. Department of Health and Human Services.

The costs can be far higher for more complex procedures. The average cost of a crown in New York City is $2,500; a periodontal procedure in Los Angeles costs $1,700, according to Fairhealthconsumer.org, a service that tracks prices of healthcare and health insurance.

Those numbers help explain why 34% of seniors had not seen a dentist in two years in 2010, and 22% had gone without care for the past five years, according to the Kaiser Family Foundation (KFF).

“Dental care is conspicuously absent from the health care coverage for older adults,” says Dora Fisher, director of older adult programs at Oral Care America, a nonprofit group that advocates for better oral health.

Medicare celebrates its 50th anniversary later this month, and adding basic dental coverage is on the wish list of many health policy experts reflecting on the program’s future.

Research shows clear links between poor oral health, diabetes and heart disease. One out of four Medicare beneficiaries has edentulism – that is, they no longer have any of their natural teeth, according to KFF; that can cause other health issues, such as nutritional deficiencies and problems with speech.

Pricing Options

Premiums for private plans, are reasonable – PPO plans cost around $15 per month, Ireland says. But individual coverage is not as robust as group dental plans. “Most have waiting periods before coverage for major procedures begins, and the dollar caps on coverage may be lower,” she says.

Ireland adds that dental insurers have been negotiating with the federal government to offer individual standalone dental plans (independent of health insurance) through the Affordable Care Act insurance exchanges, and she hopes expanded offerings will start showing up in 2016 or 2017.

Dental plans are available on many exchanges now, but they can only be purchased along with general health insurance. That effectively cuts out seniors, who are covered by Medicare.

Consumer advocates are pushing for Medicare to pay for dental care made necessary by other procedures that the program does cover. The Center for Medicare Advocacy (CMA), a non-profit legal organization, has filed lawsuits on behalf of cancer patients who have been denied coverage for dental procedures made necessary due to aggressive radiation of the head and neck.

“Medicare covers what happens to the patient’s eyes even though it doesn’t provide routine eye care – but there’s no coverage for this type of extreme dental care, and people are ending up in the hospital with infections,” says Margaret Murphy, an associate director and attorney with CMA. The Centers for Medicare and Medicaid Services did not respond to requests for comment.

The litigation has not been successful so far, but CMA has not given up. “We’re trying to figure out where to go with it next,” Murphy says.

TIME health

Obamacare Allows Phony Applicants to Automatically Re-Enroll in Program

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Jon Elswick—AP File photo dated Oct. 1, 2013 of application and instructions paper work for the Affordable Care Act.

Investigators from the Government Accountability Office had set up fake applications in 2014

(WASHINGTON) — Phony applicants that investigators signed up last year under President Barack Obama’s health care law got automatically re-enrolled for 2015. Some were rewarded with even bigger taxpayer subsidies for their insurance premiums, a congressional probe has found.

The nonpartisan Government Accountability Office says 11 counterfeit characters that its investigators created last year were automatically re-enrolled by HealthCare.gov. In Obama’s terms, they got to keep the coverage they had.

Six of those later were flagged and sent termination notices. But GAO said it was able to get five of them reinstated, by calling HealthCare.gov’s consumer service center. The five even got their monthly subsidies bumped up a bit, although GAO did not ask for it. The case of the sixth fake enrollee was under review.

HealthCare.gov does not appear to be set up to detect fraud, GAO audits and investigations chief Seto Bagdoyan said in prepared testimony for a Senate Finance Committee hearing Thursday. A copy was provided to The Associated Press.

HealthCare.gov’s document-processing contractor “is not required to seek to detect fraud,” said Bagdoyan. “The contractor personnel involved in the document-verification process are not trained as fraud experts and do not perform antifraud duties.”

Administration officials told GAO there has been “no indication of a meaningful level of fraud” in the program, Bagdoyan said.

Federal health care subsidies go directly to insurers, so the money does not end up in the bank accounts of individual enrollees. But health insurance is a valuable product in and of itself, with the cost of family coverage averaging close to $17,000 a year.

Finance Committee chairman Orrin Hatch, R-Utah, said the GAO’s investigation reveals “negligence” by the Obama administration, which “calls into question the legitimacy of the health law’s enrollment numbers and challenges the integrity of the website’s security checks.”

Last year, when GAO first disclosed that it had succeeded in signing up fake beneficiaries, the administration said it would work to strengthen HealthCare.gov’s verification checks. Administration officials had no initial comment Wednesday on GAO’s latest findings.

HealthCare.gov is an online insurance marketplace used by residents of 37 states to get subsidized private coverage under the health care law.

Although the administration has terminated coverage for more than 200,000 people who could not prove their citizenship or legal immigrant status, and some 300,000 have had their subsidies changed because of discrepancies over reported income, GAO’s bogus beneficiaries largely evaded that dragnet.

It’s unclear whether the fictitious enrollees would have been kicked out of the program eventually. For example, no tax returns were filed on behalf of any of them. Since health insurance subsidies are income-based, tax returns are one of the main ways the government checks applicants.

GAO’s investigation also uncovered a problem that bedevils millions of real people dealing with the program’s new bureaucracy: confusing and inaccurate communication.

Investigators said their bogus enrollees received unclear correspondence that failed to identify the problems with their applications.

“Rather than stating a message directly, correspondence instead was conditional or nonspecific, stating the applicant may be affected by something, and then leaving it to the applicant to parse through details to see if they were indeed affected,” said Bagdoyan.

The fake enrollees also got some perplexing instructions from HealthCare.gov. Eight of the 11 were asked to submit additional documentation to prove their citizenship and identity. But the list of suitable paperwork detailed documents for verifying income instead.

About 10 million are getting coverage this year through HealthCare.gov and state health insurance markets. GAO said the results of its undercover testing, while illustrative, cannot be generalized to the full population of applicants and enrollees.

MONEY health insurance

What’s the Difference Between a HSA and a FSA?

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Chris Stein—Getty Images

And which should I use?

I recently started a new job and am choosing my health insurance benefits. It looks like I have the option of using a health savings account (HSA) or a flexible spending account (FSA) to set money aside for medical costs. But I don’t know which is better, and the language in my benefits paperwork is confusing. Can you help?

Answer:

Setting aside money for health care costs is a savvy move, but your confusion is understandable. Choosing the right health benefits can be tricky, and with several key differences between HSAs and FSAs, it literally pays to get this decision right.

Both HSAs and FSAs allow employees with health insurance to set aside money for health care costs referred to as “qualified expenses,” including deductibles, copayments and coinsurance, and monthly prescription costs. Sometimes employers will also contribute funds to these accounts. In most cases, you receive a debit card for your account and can use it to pay for qualifying expenses throughout the year. Both types of accounts have tax benefits, too, although those benefits aren’t the same.

In general, electing to sign up for an HSA or FSA is smart. Knowing which one to select and how to get the most out of it will take some education.

Are you eligible for an HSA?

Health savings accounts are not available to everyone. This is the first key difference, and if you aren’t eligible for an HSA, it makes your decision much easier. Only people who have high deductible health plans, or HDHPs, can select an HSA.

For 2015, an HDHP is defined as health insurance with a deductible of $1,300 or more for an individual or $2,600 or more for a family. To qualify for an HSA, this HDHP must be your only health insurance plan, you must not be eligible for Medicare and you cannot be claimed as a dependent on someone else’s tax return.

Important differences between FSAs and HSAs

As you can see in the following table, there are several additional differences between these accounts. Things like your flexibility in contributing, the ability to keep your unused balance and additional tax benefits make HSAs the wisest choice if you have the option. Still, either account stands to save you money and make budgeting for medical costs easier.

Health savings account (HSA) Flexible spending account (FSA)
Eligibility requirements
  • No eligibility requirements
Contribution limit
  • 2015 contributions capped at $2,550
Changing contribution amount
  • You can change how much you contribute to the account at any point during the year.
  • Contribution amounts can be adjusted only at open enrollment or with a change in employment or family status.
Rollover
  • Unused balances roll over into the next year.
  • With a few exceptions, FSAs are “use it or lose it,” and you forfeit any unused balance.
Connection to employer
  • Your HSA can follow you as you change employment.
  • In most cases, you’ll lose your FSA with a job change. One exception: if you’re eligible for FSA continuation through COBRA.
Effect on taxes
  • Contributions are tax-deductible, but can also be taken out of your pay pretax. Growth and distributions are tax-free.
  • Contributions are pretax, and distributions are untaxed.

You cannot choose both, unless …

If you qualify for an HSA, you cannot elect to set up both an HSA and an FSA, unless the FSA is a “limited purpose” FSA. Your HR representative will be able to tell you if this is the case at your new job.

A limited purpose FSA works like a regular FSA but can be used only for vision care and dental expenses. If you expect to have high medical costs throughout the year, or want to maximize contributions to your HSA while minimizing your withdrawals, using a limited purpose FSA for expected vision and dental expenses could be a smart choice.

Which should you choose?

Both accounts have benefits that can make managing your out-of-pocket medical expenses easier throughout the year. But you should opt for an HSA if you qualify, if for no other reason than the limits are higher and you can carry over your contributions from year to year. If you don’t qualify, sign up for the FSA.

A good rule of thumb as you begin thinking about how much to contribute: Start with enough to cover your deductible, expected medication costs, anticipated doctor’s visits and any planned treatments or surgeries. Also, don’t be afraid to ask your HR representative as you come across questions; you can’t be expected to know all of the ins and outs of your new benefits.

More From NerdWallet:

TIME Uber

Why the Obamacare Decision Is Great for Uber

Berlin's Taxis As German Court Considers Uber Technologies Inc. Ban
Bloomberg—Bloomberg via Getty Images A passenger holds a HTC Corp. smartphone displaying the Uber Technologies Inc. car service application (app) as they sit in a taxi in this arranged photograph in Berlin, Germany, on Monday, Nov. 24, 2014.

The gig economy should be celebrating this week

Uber may have publicly praised Supreme Court’s Friday decision clearing the way for nationwide same-sex marriage, but a decision that came a day earlier promises a bigger impact on the ride-hailing company.

The Supreme Court on Thursday issued a decision preserving federal tax credits tied to the Affordable Care Act, also known as Obamacare. The ACA is an essential ingredient in the success of the so-called “gig economy,” wherein workers serve as independent contractors on a flexible schedule for on-demand service companies like Uber, Postmates, Instacart and more.

Because Uber and many companies like it consider their workers independent contractors instead of employees, they’re not required to provide those workers with health insurance, as the ACA only mandates that employers extend coverage to full-time employees. That loophole saves the companies a tremendous amount of money. Obamacare’s subsidies for individual insurance buyers, meanwhile, make it easier for Uber drivers and similar workers to get affordable coverage, making the work more attractive.

Uber CEO Travis Kalanick reportedly said at a November dinner that Obamacare is “huge” for his company because it frees up more workers to come drive cars for Uber when they might otherwise be tethered to a job that offers health benefits. “The democratization of those types of benefits allow people to have more flexible ways to make a living,” Kalanick said at the dinner. “They don’t have to be working for ‘the man.'” (An Uber spokeswoman confirmed Kalanick’s comments, but declined to elaborate further.)

Indeed, when Uber recently surveyed its drivers about whether they would prefer a “9-to-5 job with some benefits and a set salary” or one where they could make their own schedule, 73% said they would forgo the benefits package in favor of freedom, according to a report the company released in January. And Uber is making efforts to help its drivers get insured, announcing late last year a partnership with Stride Health to guide workers in choosing a plan on the government insurance exchanges.

It’s unclear, however, how much Uber is actually spending, if anything, on this ancillary benefit: Stride’s services are already available for free to anyone. A spokeswoman for Uber says drivers who use Stride through Uber’s “customized” app would “save time” because their personal information would already be “pre-populated” into tool.

Still, how much longer Uber might capitalize on a combination of Obamacare and employment status rules remains up in the air. A California labor board recently found that a single Uber driver was more accurately characterized as an employee, not an independent contractor. While that decision is non-binding, it has called into question Uber’s policies regarding health insurance and other benefits. On-demand grocery service Instacart, perhaps seeing the writing on the wall, recently announced that it is experimenting with turning some of its workers into part-time employees in what could be the first step in a broader trend across gig economy companies.

For now, however, Uber is safe to celebrate. Had the Court gone the other way Thursday, it may have found its business model in serious jeopardy.

This article originally appeared on Fortune.com.

TIME

Looking To Stay On Your Partner’s Insurance? It May Be Time To Get Married

Empire Blue Cross Blue Shield health benefits cards are arra
Bloomberg—Bloomberg via Getty Images Empire Blue Cross Blue Shield health benefits cards are arranged for a photograph Tuesday, September 27, 2005.

Domestic partner benefits may become a lot less common.

It’s official. The Supreme Court ruled 5-4 in favor of legalizing gay marriage across the U.S., opening up the rite of commitment to any person regardless of their sexuality.

It’s a historic moment–and the last thing that’s on many peoples minds is insurance. (Though, quick reminder! The Supreme Court also made an important decision yesterday to uphold Obamacare subsidies.)

But, now that the right to marry is extended to everyone, many companies could start streamlining their benefits packages and take away the perk of insurance coverage for domestic partners, according to analysis by Aon Hewitt. If you want to stay on your significant other’s employer-sponsored insurance policy, now may be the moment to pop the question.

Such a move could affect both gay and straight couples who may opt to be committed partners but not marry, which is more common for the Millennial generation. Nearly 9.2% of Millennials co-habit with a partner, nearly twice the rate of Gen Xers at the same age, according to the Pew Research Center.

About 77% of employers currently offer same-sex domestic partner health care coverage, according to data from Aon Hewitt. Such benefits were a way for companies to even the benefits playing field for couples who couldn’t legally wed. But many companies could opt out of that offering, streamlining their benefits (and costs) to only cover spouses–now that all people have equal access to marriage.

Some companies, including Delta Air Lines and Verizon Communications, had already started to eliminate domestic partner benefits in states where gay marriage was legal prior to the Supreme Court ruling. Those policies will likely be extended now that marriage is widely accessible, making insurance benefits available only to legal spouses–gay or straight.

“The main idea is to make things fair for everyone,” Verizon spokesman Ray McConville, told the Wall Street Journal. “Currently, if you’re a guy living with a longtime girlfriend or vice versa, you don’t have the ability to get health insurance for your partner.”

Streamlining benefits helps companies ease the cost of administrative functions, especially when it comes to applying different standards to employees in various states, said Aon Hewitt.

Other companies, like Google, IBM and Dow Chemical, offer domestic partner benefits to all couples and don’t envision getting rid of the perk anytime soon. They see it as a way to attract top talent, recognizing that some people simply prefer not to marry.

MONEY Health Care

What is Obamacare?

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Robert A. Di Ieso, Jr.

Here's how President Obama's health insurance reform law actually works

Today, there’s been a lot of talk about the Supreme Court’s latest ruling on the Affordable Care Act, better known as Obamacare. But while the law signed by President Obama in 2010 made huge changes to the health insurance system, most people under 65 still get their coverage the way they always did: from their employer. Unless you bought a health insurance plan on a government-run marketplace, you might not be familiar with how the ACA provides coverage. Here are answers to some common questions:

How does the law help people get insurance?

The law set up insurance “exchanges” that offer consumers and small businesses a choice of standardized and heavily regulated health plans. For the most part, this marketplaces serve people who aren’t offered insurance by a large employer.

And how is that different from the way people bought their own insurance before?

On the exchanges, insurers are not able to turn anyone down because of a pre-existing condition; from pregnancy to heart disease, they’re all covered. The law also restricts or blocks annual and lifetime limits on what insurers, including in employer plans, will pay.

Rates aren’t tied to your health, although smokers may have to pay up to 50% more. The oldest people in a plan will pay no more than three times the rate paid by the youngest. In short, policies you buy yourself will be a lot more like the group plans you get at work.

What does coverage cost?

The insurance on the exchanges isn’t free—a family of four could well face annual premiums of $10,000 a year. But many of those using the exchanges will also receive federal subsidies—technically, tax credits—to help them buy. Those subsidies reach deep into the middle class: For families earning up to four times the poverty line—about $95,000 for a couple with two kids—the tax credits will be set so that they pay no more than about 9.5% of their income for a fairly basic health plan. (That cap is designed to rise gradually should premiums grow faster than incomes.)

People with lower incomes pay even smaller percentages. Some pay almost nothing.

The law was also meant to allows millions of the near poor to join Medicaid through the exchanges, although a Supreme Court decision left it up to individual states whether to participate in the expansion. Currently, 21 states are opting out.

What kind of coverage can I get?

All the plans must provide at least a standard menu of essential benefits. They come in four basic types: bronze, silver, gold, and platinum.

Although plans can compete by mixing different premiums, deductibles, and co-pays, you’ll know the average level of out-of-pocket costs you can expect in each type. For example, the silver plans ask you to pay about 30% of your costs out of pocket. (Subsidies are based on the cost of the silver plans.) The more expensive platinum plans, which would be most similar to a large employer’s coverage, would have out-of-pocket costs of just 10%.

How is all this paid for?

In a number of ways, but the most direct one is that high earners got a payroll tax hike. Starting in 2013, couples have paid additional taxes on earnings above $250,000 ($200,000, if you’re single)—0.9% on earned income and 3.8% on investment income.

Why are some people fined for not buying coverage?

By 2016 you’ll be dunned $695 a year or 2.5% of your income, whichever is higher, if you don’t have health insurance. However, there’s an exemption if premiums top 8% of your income. Insurers fought for this provision. Even with subsidies, some people may decide that coverage is too expensive. They’ll tend to be healthier than average—that’s why they’d be willing to take the risk. But that poses a problem in a system where insurers have to take all comers. If healthy people drop out, the pool of people paying in will typically be sicker and more expensive to treat. That causes premiums to rise, which causes more healthy people to drop out, which means higher premiums, and so on. To prevent this “death spiral,” the law pushes people to buy.

Adapted from “The Truth About Health Care Reform,” which appeared in the May 2010 issue of MONEY.

MONEY Health Care

Here is How Much the Government Will Pay to Help You Buy Obamacare

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The Supreme Court decided that health care subsidies should remain available to everyone who buys Obamacare plans

Today the Supreme Court decided that Americans who buy health insurance on Healthcare.gov are eligible for subsidies to help them pay their premiums.

The decision shines a bright light on the oft-forgotten linchpin that holds the sweeping 2010 health care law together: The federal government is handing people significant amounts of money to pay their premiums.

Under the Affordable Care Act, popularly known as Obamacare, those who don’t have health insurance can buy plans on government-run marketplaces or “exchanges.” States may either set up their own marketplaces or opt to use the federal government’s marketplace, available on Healthcare.gov. Then, the government provides subsidies to help people afford the healthcare premiums.

The court case was about whether the law said the subsidies applied in states that didn’t set up their own exchanges. (The argument was over how to read one clause in the legislation.) The Supreme Court decided that health care subsidies should remain available to everyone who buys Obamacare plans.

The subsidies make a huge difference to the people who receive them: On the federal exchange, they’re worth an average of $272 a month.

Use this calculator from the Kaiser Family Foundation to see how much an Obamacare plan would cost you, and how much is covered by the subsidies:

And a lot of people qualify: 87% of people who bought Obamacare plans on the federal exchange got a subsidy. Anyone who makes up to 400% of the poverty line is eligible. In 2015, families of four that earned $95,400 made the cutoff.

Policymakers will continue to debate whether the subsidies are accomplishing the goal of making health care affordable. The Government Accountability Office recently found that subsidies “likely contributed to an expansion of health insurance coverage in 2014.” But it’s not like health insurance premiums are cheap, even with financial assistance from the government. After all, Americans who get health insurance at work pay less, on average: $90 a month for single coverage, according to the Kaiser Family Foundation. That’s up from just $27 a month 15 years ago.

And by the way, workplace coverage is (indirectly) subsidized by the government too, in the form of a tax break that makes it very attractive for companies to offer.

MONEY Health Care

When Your Health Plan’s Deductible Is So High That You Can’t Afford to See a Doctor

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23% of respondents to a new survey were underinsured, in part due to rising deductibles.

The Affordable Care Act (aka Obamacare) was designed to help provide health insurance for those who could not previously afford insurance, and it appears to have succeeded in that goal. (Given that insurance coverage is becoming a mandate punishable by fines, how could it not?)

However, the underpinning of Obamacare is to spread costs out through subsidies toward a greater use of higher deductible health plans (HDHPs) to control costs. Higher deductibles tend to contribute to a different problem — underinsurance. You may have insurance now, but is your deductible so high relative to your income that you tend not to use it? The latest findings from the Commonwealth Fund Biennial Health Insurance survey suggest that was the case for many people in 2014.

According to the survey report, approximately 23% of the respondents between 19 and 64 years of age who had continuous insurance over a twelve-month period were underinsured. That means that approximately 31 million insured people have insufficient coverage. Unfortunately, the 23% value shows no statistical difference since the report became biennial in 2010, but it does show a doubling in the underinsured rate since the first study in 2003 — as well as a tripling of those with HDHPs.

The consequences of underinsurance are significant. According to the report, just over half (51%) of the underinsured had problems with medical bills and corresponding debts. Debt loads of at least $4,000 were noted by half of the underinsured and another 41% of the privately insured with HDHPs. Worse, 44% of the underinsured avoided some form of medical care because of the cost.

To be underinsured for study purposes, you had to meet one of these criteria:

    • High Medical Costs – Out-of-pocket costs (premiums excluded) over the previous twelve-month period were at least 10% of household income. If you were below the poverty line (under 200% of the federal poverty level (FPL)), the threshold percentage was 5% of household income.
    • High Deductibles – Your deductible was at least 5% of your household income, regardless of that income level.

By that definition, we would expect lower income families to make up most of the underinsured — and they do, at more than twice the rate of higher income families. At least the numbers have improved slightly. The 2014 survey shows 42% of those below the poverty line on the survey were underinsured, down from 44% in 2012 and 49% in 2010.

Meanwhile, the number of the insured with deductibles that are more than 5% of income has steadily risen from 3% in 2005 to 11% today. Those with employer-provided coverage were more likely to have HDHPs if they were employed at a smaller firm with less than one hundred employees (20% compared to 8% at larger firms). For those with individual coverage through any source including the exchanges, the HDHP share was 24%.

Overall, deductibles of at least $3,000 are paid by 11% of the fully insured, up from 4% in 2010 and a paltry 1% in 2003. One-quarter of the respondents have no deductible, 37% have deductibles below $1,000, and the remaining 27% have deductibles between $1,000 and $3,000.

Download the full report here

In fairness to ObamaCare, since the survey was conducted between July and December 2014, the effect of the ACA cannot possibly be measured in this survey (since most coverage through the exchanges could not cover the entire twelve-month period). However, the effect should be measurable in the next biennial survey.

Will Obamacare and the upcoming employer mandates truly provide affordable insurance for all, or will there primarily be a shift from the uninsured to underinsured who do not use their benefits? By the time the next survey comes out in 2016, we will know the answer. The only sure thing is that both friends and foes of Obamacare will be spinning the results to meet their preferred view of health care.

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