Our Take on Obamacare

Here at Kiplinger, we specialize in giving readers advice they can act on. So we have avoided the wrangling over Obama­care till we could see how the new law will actually affect you. The state exchanges for people who don't have group coverage are scheduled to be up and running during open enrollment starting in October -- right on cue you'll find our story about navigating Obamacare. Unfortunately, it's still not clear exactly how things will shake out. So I asked contributing editor Kim Lankford, our insurance specialist, for her perspective on some of the unknowns and potential surprises.

See Also: Get Ready for Obamacare

Kim notes that each state has its own exchange. Although many exchanges will be run by the federal government, she says, "I don't think people realize how much insurers and premiums will vary from state to state, and even from region to region."

Similarly, insurance premiums will be approved on a state-by-state basis. For instance, says Kim, "it's no surprise" that some New York residents will see rates decline. New York has some of the highest premiums in the country because insurers have been required to charge everyone the same rate, regardless of whether they were young and healthy or older and sick. But in other states, residents could see premiums rise significantly.

For years, Kim has advised readers that individual health insurance was very affordable for most healthy young people—as little as $100 a month (see Health Insurance for Twentysomethings). Yet many young adults still didn't bother to buy it. Now their premiums could be much higher, says Kim, so it's not clear whether they'll sign up.

Subsidies could ease the burden. But with no mechanisms yet in place to verify who qualifies for coverage on the exchanges or who's eligible for premium subsidies, the exchanges will be taking applicants at their word. So it's possible that some people could try to game the system, or that tax issues could arise if they're later found ineligible and have to pay the money back.

People who don't qualify for subsidies probably don't realize that they can still buy coverage directly from insurers outside the exchanges, says Kim. Direct-sold policies give insurers more flexibility to offer smaller networks of health care providers, which can mean lower premiums if you don't mind the restrictions. "There's a whole extra marketplace that people may overlook," says Kim.

Kim has recommended for many years that people who don't have group coverage shop for policies on eHealthInsurance.com, which already functions as a de facto national marketplace. Come to think of it, says Kim, "a lot of money is being spent to teach people to do what we've been writing about all along."

Retirement advice. Every year I take our summer interns out to lunch and ask what they've learned during their time with us. I'm always surprised that one lesson rises to the top: the importance of saving early for retirement. "It's crucial for me to know what to do as a 21-year-old leaving college and getting a real job," says intern Mary Clare Fischer, now a senior at the University of Maryland. "And it's crucial to know what to do later on, when I start tapping various accounts."

For readers in that situation, I recommend our cover story on how to make your money last in retirement. And if you have not yet claimed Social Security benefits, I recommend that on September 23 at 6 p.m. eastern time you log on to a free webcast presented by William Meyer, our partner in Kiplinger's Social Security Solutions. Sponsored by TD Ameritrade, the 45-minute webcast will tell you how to get the most out of Social Security. Register at kiplinger.com/go/social).

And one more piece of advice courtesy of Mary Clare: "Read Kiplinger's."