Why Obamacare is Fantastic, Albeit Confusing for Peace Corps Volunteers

For many Peace Corps Volunteers serving out in the bush somewhere, we’ve all but forgotten about Obamacare. Why? Well, the days blur together and no one is ever quite sure what year it is. Also, the bush part. Yes, we have access to news and facebook and email, but sometimes that means standing on a rock waving your arms wildly in the air hoping to get a signal. So I’m sure it simply slipped the minds of many PCVs worldwide that the online marketplace has gone live. Or they have no idea what that even means.

For the Volunteers returning to America in the next 6 months, Obamacare is fantastic. We are perfect candidates for the new system. Most of us will be returning unemployed, previously uninsurable (chronic Montezuma’s revenge should be a pre-existing condition), and likely in serious need of insurance. Peace Corps provides one month of insurance upon returning to the States, after that you can decide to purchase AfterCare for some months. (Word on the bush path is AfterCare will no longer be an 18 month contract, but 3 months instead.) After reviewing the premium cost (about $240/month) and reviews (terrible) of AfterCare, I’ve decided that shopping for options on the marketplace is a better alternative.

Shopping for plans hits a snag though for Peace Corps Volunteers. Firstly, you need to know what state you live in. Secondly, you need to estimate your 2014 income. I’m going to go out on a limb here and assume that all Peace Corps Volunteers returning to America hope that their income will be higher than their in country allowance. If I go back to America and I get a job making $175 a month, I’m coming back to Ghana! So you can see the difficulty here – we don’t know where we will be living or how much money we will be making (if we can get a job). We might move back in with our parents while we look for a job, but odds are many PCVs are looking for jobs in multiple states. So, what’s a poor, homeless RPCV to do?

Well, let’s learn some facts about the new Obamacare roll out and answers some questions (scroll down for some insurance related definitions as well):

Income Related

1. 2014 income estimation determines whether you qualify for tax subsidies or Medicaid. The tax subsidies can change your out-of-pocket premium expenses in the long run. If you earn enough though, you won’t qualify for subsidies. Let’s do an example of what a returning PCV might have to pay:

Example A: a 27 year old PCV has just returned to America. He’s living with his parents right now in Oregon as he readjusts to running water, stable electricity, grocery stores, and hipsters. He is applying for jobs in Oregon and estimates that once he gets a job, he’ll be making $30,000 a year. Here’s his estimate for the Silver plan:

$164/month ($1976/year) premium
No subsidies

Example B
: a 25 year old has just returned and wants insurance. Since she’s 25 she still qualifies under her parents’ insurance. She tells her parents to add her as a dependent on their insurance. Done.

Example C: a 26 year old RPCV is looking for jobs in many different states, she needs insurance in the interim though. She doesn’t know how long it will take to get a job, so she’s living at home with her dad in Texas. She’s looking at nonprofit jobs though for when she does get a job. She guesses her salary will be $25,000. Her estimate:

$223/month ($2680/year) premium
$951 tax subsidy
Premium after subsidy: $144/month ($1729/year)

(All estimates are from: http://kff.org/interactive/subsidy-calculator/)

2. If you estimate your income incorrectly, it will be adjusted for your 2014 taxes (read: April 2015). But what does that mean? Here’s a breakdown:

You estimate $30,000, but end up making $42,000 (first of all, congrats!). You don’t qualify for subsidies either way. You’re fine.
You estimate $22,000, but end up making $37,000. You qualified for subsidies with the lower income, but since you made more money, you’ll have to pay the subsidy back.
You estimate $40,000, but end up making $20,000. You probably qualify for subsidies now, which means you’ll be getting money back.

So, my advice: estimate high. It is better to be pleasantly surprised with a subsidy check, than disappointed when one doesn’t come. (Although, not having a subsidy means you are doing well, so win win either way.)

3. Does my readjustment allowance count as 2014 income? If you COS before December 31, 2013 you don’t have to worry about this question.
For the past two years, you’ve been paying taxes on your readjustment allowance since it has been adding up each month. In terms of income, it isn’t the lump sum in tax terms you think it is. If you COS in 2014, your income should be adjusted based on whatever remaining months you had for your readjustment allowance. (Disclaimer: I am by NO MEANS a tax accountant or professional, my mother is and this is what I understood from her.) So that means:

If you COS in March, that’s $825. It isn’t going to affect you terribly when estimating your income, but if you feel wary overestimate.

4. If I take cash-in-lieu does that count as income? Again, according to my tax-loving mom and the Peace Corps (http://files.peacecorps.gov/multimedia/pdf/policies/taxguide2011.pdf), it does not.

Where do I live?!

1. If you move after you apply/receive insurance, you are qualified for a 60 day new open enrollment. If you apply for insurance in Oklahoma, but move to Texas a few months later you will have 60 days in which to reenroll for insurance. After 60 days, you have to wait for the next time to sign up for insurance – October 2014. If you COS in 2014, you will most likely apply for this exception as well. So you can apply for insurance after returning to the States.

2. What if I get a job that offers insurance and I already bought a plan through the marketplace? You will have to decide if you want to keep your current plan or switch to the insurance provided through your employer. If you want to cancel your current plan, you will have to contact the actual insurance company and discuss with them cancelling. Be sure to ask about premium proration! If you want to keep your current plan, but switch later – talk to your new employer about the next open enrollment period. Mark that date on your calendar and switch then.

What are these terms?

open enrollment – a couple months during the year in which you can sign up for insurance. This is the only time when you can sign up for new insurance or switch.

premium – consider it like a monthly subscription cost. This is the amount of money you pay each month in order to have insurance. (Just like car or renter’s insurance)

income – if you are curious what qualifies as income and what doesn’t check out this website: http://laborcenter.berkeley.edu/healthcare/MAGI_summary13.pdf

subsidy – The health care subsidy is in the form of a tax credit, but unlike most tax credits, you won’t have to wait until you file your taxes to receive it. The subsidy will be applied directly to your insurance premium when you purchase a plan through the online marketplace.

 

My Recommendation

You have until March 31, 2014 to purchase insurance through the marketplace. Starting April 1, you will have to pay a penalty for not having insurance. For Peace Corps Volunteers returning to America with our incredible amount of parasites, worms, and scars – Obamacare is a great thing. So ditch AfterCare and pick a plan that works for you.

If you are looking for jobs, estimate your income based on the salary of jobs you’re looking at. Check glassdoor for more ways to estimate salary. If you move, just reapply for insurance. You never know, you might get a better deal in a different state!

If you are still curious about Obamacare and how it impacts new RPCVs, ask away in the comments below. Or check out these websites for more information:

https://ttlc.intuit.com/health-care

http://kff.org/health-reform/

Wary about Obamacare’s impact on your taxes when you return to the land of paying taxes, here’s information about how Obamacare/Affordable Care Act is being paid for:

http://obamacarefacts.com/obamacare-taxes.php

http://www.irs.gov/uac/Affordable-Care-Act-Tax-Provisions

You can find the marketplace at: https://www.healthcare.gov/

Update: October 21 – for details on the prices I found for plans check out this post: https://mapya.wordpress.com/2013/10/21/obamacare-update/

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16 thoughts on “Why Obamacare is Fantastic, Albeit Confusing for Peace Corps Volunteers

    • I’m sorry you hate providing low cost insurance options to people who need care, especially when 98% of the public will bear minimal tax burden (http://www.irs.gov/uac/Affordable-Care-Act-Tax-Provisions).

      If you are not a Peace Corps Volunteer, then you can consider health insurance through your employer, the marketplace, or pay the penalty for not being insured. Peace Corps is a two year service commitment. We are ordinary Americans who have chosen to serve our country by aiding in the development of nations not as fortunate as our own. We risk our health and safety in impoverished villages. Upon returning to America it is nice to have options for our healthcare.

      My post specifically details options available for Peace Corps Volunteers upon returning to America, and my advice pertains specifically to that.

  1. Starting January 1, 2014, any American who goes without health insurance coverage that meets the standard for “minimum essential coverage,” as laid out in the Affordable Care Act, for MORE than three consecutive months in a given year may be subject to a financial penalty.

    As a low-cost, limited benefit plan, AfterCorps DOES NOT qualify as minimum essential coverage. This is why Peace Corps is limiting coverage under the AfterCorps program to a total of three months, with one month paid by the Peace Corps and an option for RPCVs to purchase an additional two months of AfterCorps coverage if they choose to do so…

    After Corps. care is really a waste of money when you think of it… Really the Affordable Care Act allows all RPCVs to purchase insurance with little to no cost and its the only option I have being post-grad/as a RPCV most likely only with part-time employment or as unpaid intern. It’s great for us!

    • Perhaps with the new option for low cost healthcare, Peace Corps will do away with AfterCorps and simply recommend RPCVs to the online marketplace.

      • Our host country did just that… although they are still offering all volunteers After Corps. care with the ability to purchase it to up to 3 months. However, what returned Peace Corps. volunteer has $275 USD to purchase After Corps care when it doesn’t even meet the requirements for the standard “minimum essential coverage”?

        Eventually surely, Peace Corps will get rid of After Corps. care or at least offer a better health care package that does meet the criteria for “minimum essential coverage” to returning volunteers in the future. Researching Obamacare/Affordable Healthcare Act data when you’ve been essentially under a rock while living and working overseas can be a little overwhelming… but Obamacare really does allow for low-cost healthcare options for returned volunteers that many Peace Corps. volunteers aren’t aware of.

        Regardless of how you feel about the government requiring you to purchase health insurance. Obamacare offers affordable/low-cost options for Returned Peace Corps. volunteers that allow us to purchase health insurance that we wouldn’t otherwise be able to purchase due to our limited income.

    • I agree 100%. I’m very grateful to at least have options, whereas before it was just a giant void after service unless you choose the other bad option.

      • Very true. I wrote this primarily for the age demographic I’m familiar with. Additionally, I knew a lot of the 20 something PCVs in my country were confused by the new insurance marketplace.

        I’d be interested to know how it affects other age demographics as well.

  2. Thank you for a wonderful post. And congrats on COSing soon. I know it will be bitter-sweet. I wish you well once you get back to the USA. Thank you for serving your country and serving the people of Ghana. 🙂

    PS. Thank goodness I don’t have to deal with this for another 2-years.

    Jim
    Thailand 2014-2016

  3. I purchased insurance yesterday for 108 a month (thank you Gov.Perry for not extending medicare/medicaid).

    Medicare/Medicaid seems to be the most affordable option for RPCVs in my group (if you’re in a state that extended coverage to include you!)

    Something to also take note for RPCVs is the penalty for NOT having insurance will NOT affect you if you’re not planning to file taxes for last year (i.e. your income was only- your Peace Corps. readjustment and/or your living allowance – its taxable but, you still fall below the national poverty line and won’t be required to pay taxes). You can apply for the waiver from your state agencies.

    My dad’s an oncologist so, I know that bad stuff can happen and I want to be responsible citizen (and not contributing to rising premium rates) so I’m happy that I had the chance to pay for at least yearly “well-visits” to a doctor and will not have to pay full price for high medical care costs in the unlikely event I discover something is seriously wrong(i.e. cancer, chronic illness)/suffer from catastrophic injury (i.e. car accident).

    My deductible is pretty high – but “catastrophic” plans if you’re under the age of 30 (and not a smoker) are the best bet since, its unlikely you’ll be using a lot of medical care and the monthly premiums are significantly lower but, in the event something DOES happen you’ll have a higher deductible to pay your insurance company (mine is over $6,000).

    You can also purchase dental plans- My monthly premium for dental is about $8.

    $116 for medical care (that falls within the “minimum essential coverage”) and dental! Still cheaper than After Corps. which does NOT include dental or provide minimum medical coverage.

    The website is still pretty awful – but if you have time during the day call the phone numbers provided on the website, from my experience its easier to apply over the phone rather than through the buggy website. You can also check plans before you apply over the phone – online.

    • From what I understand, the tax penalty won’t be taken until April 2015. So your income is based on 2014 earnings.

      So far I’ve been pretty happy with my plan, going to the doctor for the first time in two weeks. I don’t like not being able to just go to a pharmacy and get my prescriptions without seeing a doctor!

  4. Sorry if you already covered this. (This post is helpful, by the way!) Any idea about PCVs who COS post the enrollment deadline? We come home in July, and I’m just clueless. Will we still be able to buy insurance after open enrollment? Obviously it’s not an option to buy it before COS-ing, in efforts to stay within the deadline. Any idea? Thanks!

    • Hi Danielle, because you are moving, you qualify for a different open enrollment for 60 days after your COS date. Additionally, you won’t face a tax penalty if you sign up within the 60 days. At COS PC provided a flowchart with more information about specific timelines. But 60 days is the magic number to remember.

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