By Mark Miller
CHICAGO (Reuters) - When Carmen Oberai was diagnosed with breast cancer several years ago, she knew the treatment would make it tough for her to stay at her job. But she needed the health insurance provided by her employer, so she worked through the illness.
Oberai, 62, works with at-risk pregnant women for a nonprofit agency in Port Charlotte, Florida. "My treatment wasn't as brutal as they make it sound, but you do get tired as a side-effect, and my work is very demanding," she says. "I didn't really know how much time I might need away from work, and I was worried that if I quit I'd lose my insurance and couldn't get covered anywhere else with my pre-existing condition."
The health insurance choices for workers like Oberai will change dramatically next year with final implementation of national healthcare reform. The Affordable Care Act (ACA) prohibits insurers from turning away applicants for pre-existing conditions, and that's expected to turn the key for workers facing "job lock" - people who need to leave their jobs but can't afford to lose healthcare coverage.
The changes will be especially important for workers over 50, who are too young for Medicare but more likely to have health problems. Nearly half (47 percent) of workers retire earlier than planned, and 55 percent cite a health or disability issue as the cause, according to the Employee Benefit Research Institute.
"I've talked with a lot of people who need to leave their jobs because of health problems - but they need the health insurance," says Kathleen Stoll, director of health policy for Families USA, a nonprofit health care advocacy group. "They're not sick enough to qualify for disability benefits but they need to cut back on work."
The end of job lock also will be important for another group of workers - people who have been hanging on to jobs for health insurance but would rather work on their own or start a business.
A recent study by the Urban Institute's Health Policy Center and Georgetown University's Health Policy Institute forecast that health reform will boost the number of self-employed people by 1.5 million. And research by the Ewing Marion Kauffman Foundation, which is devoted to entrepreneurship, found that baby boomers have had the highest rate of startups during the last decade.
Older workers who want to jump ship also will benefit from provisions of the ACA designed to control the cost of insurance purchased in new state health insurance exchanges - markets where Americans will be able to shop for a healthcare plan, comparing benefits and prices. Insurers are permitted to set premium rates three times higher for applicants over the age of 50. But for many applicants, out-of-pocket costs will be held down by subsidies and tax credits offered under the new law.
Tax credits are available to families with incomes between 100 percent and 400 percent of the federally-defined poverty guideline. This year that is $11,490 for an individual and $23,550 for a family of four.
The law also offers reduced copayments and deductibles for families up to 250 percent of the poverty level. And some families below 138 percent of the poverty level will qualify for Medicaid - the federal health program for the poor - in states that opted to accept the ACA's expansion of that program.
How does that compare with existing group coverage offered by employers? Last year, the average worker contribution for an individual policy was $951, according to the Kaiser Family Foundation. For workers buying family coverage, the average contribution was $4,316.
In the exchanges, Kaiser estimates that a household with two 55-year-old adults and 2014 income of $50,000 would pay $4,750 for a "silver" plan, which covers 70 percent of healthcare costs. If that same household had income of $150,000 - too high to qualify for subsidies and credits - Kaiser estimates the annual silver premium would be $13,461.
Three other tiers of coverage also will be offered, with varying levels of premiums and cost-sharing - bronze, gold and platinum.
Exact comparisons between group coverage and policies in the new healthcare exchanges are complicated, since much will depend on the quality of group coverage that workers are leaving behind.
"It really depends on what kind of business they work for," says Linda Blumberg, co-author of the Urban Institute-Georgetown University study. "Is it a large company or a small business? Are the workers mostly older? All that will have a big influence on what they're paying now."
The new health exchanges are to have final insurance prices online in time for open enrollment, which starts October 1. In the meantime, Kaiser has an online subsidy calculator that can provide ballpark estimates of your costs based on your income, age and number of family members needing coverage (http://kff.org/interactive/subsidy-calculator/).
(The writer is a Reuters columnist. The opinions expressed are his own.)
For more from Mark Miller, see http://link.reuters.com/qyk97s
(Follow us @ReutersMoney or at http://www.reuters.com/finance/personal-finance; Editing by Lauren Young and John Wallace)