Page 23 - Kiplinger's Personal Finance - November 2018

MONEY SPECIAL REPORT

pay up to three times what a younger charge a lot more for silver plans on
KipTip person might pay. You qualify for a the exchanges now that the govern-
Make the Most subsidy if your income is below 400% ment no longer reimburses them for
of the federal poverty level (which
cost-sharing subsidies, which help pay
of an HSA is $48,560 for singles, $65,840 for deductibles and co-payments for lower-
couples and $100,400 for a family
income people. But a few insurers,
of four). In that case, you should gen- including Kaiser Permanente, offer an
erally buy insurance on your state’s off-exchange version of the silver plan
Higher health insurance deductibles health insurance exchange; go to with a much lower premium.
have a silver lining: You can contribute
www.healthcare.gov for links. If you’re retiring early or leaving
to a health savings account. To qualify,
Policies are still pricey, but fortu- your job, check out the cost of con-
you must have an HSA-eligible health
nately, most buyers have more options tinuing your current coverage under
insurance policy with a deductible of
in 2019 than before. The best strategy COBRA, a federal law that lets you
at least $1,350 for individual coverage
is to “leave no stone unturned when keep your employer’s coverage for up
or $2,700 for family coverage—whether
it comes to evaluating all of the plans to 18 months after you leave your job.
you get insurance through your employer
available in your zip code,” says Ber- You have to pay the employer’s and
or on your own. You can contribute up
nard Health’s McCostlin. You can employee’s share of the costs, but that
to $3,500 to an HSA in 2019 if you have
shop for policies on your state ex- could be your best deal, says Wayne
individual coverage and up to $7,000 if
change even if you don’t get a subsidy. Sakamoto, a health insurance agent
you have family coverage, plus an extra
Or you can go through a Web broker, in Naples, Fla.
$1,000 if you’re 55 or older.
such as eHealthInsurance.com, or The federal penalty for not having
This powerful account provides a
buy directly from the insurer. You insurance will disappear in 2019
triple tax benefit: Your contributions
can also work with a health insurance (although some states have their own
are tax-deductible (or pretax if made
agent (find one in your area at www penalty), and new rules are expanding
through your employer), your money
.nahu.org). some types of coverage that don’t
grows tax-deferred, and you can use
It’s best to buy coverage through meet the ACA standards. Such policies
the money tax-free to pay deductibles,
your state’s health insurance exchange may have lower premiums, but they
co-payments, prescription drug costs,
if there’s any chance that your income also shift more risk to you. “I would
out-of-pocket dental and vision costs,
could qualify you for a subsidy. But look at these alternative options very
and other eligible expenses.
you may have some options off the cautiously. It’s very much a buyer-
You can’t contribute to an HSA after
exchange that aren’t eligible for a beware market,” says Sabrina Corlette,
you’re on Medicare, but you can use
subsidy but still meet the Affordable research professor at the Georgetown
money in the account to pay premiums
Care Act standards (which specify 10 University Center on Health Insur-
for Medicare Part B, Part D and Medi-
essential health benefits, no maximum ance Reforms.
care Advantage (but not medigap)
coverage limit and no preexisting- For example, starting in October,
after age 65. You can even withdraw
condition exclusions). Some insurers insurers may offer short-term plans
money tax-free from the account to
may offer off-exchange policies with that last for up to 12 months (short-
reimburse yourself for Medicare premi-
different premiums, cost-sharing or term plans had been limited to three
ums that are paid automatically from
provider networks than their on- months) and may be renewed for up
your Social Security benefits.
exchange versions. to three years at the insurer’s discre-
Lori Verni-Fogarsi, 47, an author in
It’s particularly important to look tion. “But the insurer can look at your
Holly Springs, N.C., and her husband,
at off-exchange options if you’re inter- health status and decide whether or
Mark Fogarsi, 56, have been contribut-
ested in a silver-level policy. The plans not to renew it,” says Corlette. Some
ing to an HSA for years, and Fogarsi’s
sold on the state insurance exchanges states have imposed stricter rules.
former employer contributed about
fall into four different levels based The premiums for short-term
$2,000 to the account each year. They
on the amount of coverage they pro- policies can be a lot less than they
have maxed out their contributions to
vide, with bronze policies generally are for ACA-compliant policies, but
other tax-advantaged retirement ac-
having the highest deductibles (and they don’t have to cover the ACA’s
counts and use the HSA to supplement
lowest premiums), silver policies pro- 10 essential health benefits (such as
their savings. “I usually pay cash for the
viding slightly lower deductibles and maternity care), and they can exclude
out-of-pocket costs instead of using the
co-payments, and gold and platinum preexisting conditions or reject you
HSA so we can leave it in there to grow,”
providing even more coverage. because of your health. Short-term
Verni-Fogarsi says.
Most insurers continue to “silver policies generally don’t cover prescrip-
load” their premiums—that is, they tion drugs, but they may provide a
30 KIPLINGER’S PERSONAL FINANCE 11/2018
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