What you need to know about open enrollment, health care amid COVID-19
Yahoo Finance’s Brian Sozzi and Alexis Christoforous discuss health care open enrollment and savings options with Nicola Smith Jackson, Market Analyst and Wealth Strategist.
ALEXIS CHRISTOFOROUS: Question marks over the growing pandemic and what may happen with stimulus causing investors some anxiety. And they're also wondering how that may impact how they decide to deal with open enrollment and savings options this time of year. Let's bring in market analyst and wealth strategist Nicole Smith Jackson for this week's FA Corner, presented by PIMCO.
Nicola, good to see you again. How should people be approaching this open enrollment differently compared to previous years?
NICOLA SMITH JACKSON: Well, I can tell you with us, no one expecting the pandemic, the effects of the pandemic to still be wreaking havoc on us from a health and financial way. We're going to need to take this open enrollment much more seriously than we have in the past, where 157 million Americans depend on employer-sponsored health coverage.
But that's going to change because of loss of employment, as well as where many people now would have never looked at the marketplace for insurance because they didn't have pre-existing conditions. That has also changed because of the lasting health effects of people who have the virus. And so I would say that unemployment might be down from 22 million, where we're at the end of quarter one into quarter 2. However, we're still 10.7 million people out of jobs.
BRIAN SOZZI: Should a possible stimulus have any impact on how people think about open enrollment?
NICOLA SMITH JACKSON: I would definitely say the stimulus would have a great impact. At least it will give more people cash on hand. But given that cash on hand without instructions to that money still will not be an answer. And so we want to increase the financial literacy of Americans, for them to be able to understand and count all the costs of health coverage.
So they're going to need to understand truly what the premiums are, like that monthly payment that they pay for, their health coverage, versus the deductible. Understanding, like, how much will they have to pay in before their insurance kicks in, as well as the coinsurance and copayments, how much should they have to pay going to the doctor. And, you know, the maximum pay out every year is extremely good.
It's going to be extremely important because most people are not prepared financially. Cash is down, so there are some options for them. And what we want to know is that, OK, you get this stimulus money, let's give them some instructions with the stimulus money and help them understand all of the options that are available. Because many people will not qualify for private health insurance because of their health conditions now that they may have not had last year.
ALEXIS CHRISTOFOROUS: Are you advising clients about what to do if the Supreme Court overturns the Affordable Care Act?
NICOLA SMITH JACKSON: Well, I can tell you right now, looking at lower premiums, higher deductibles, where whatever cash you do have, to maybe look at if you're a self-employed individual looking at, you know, health savings accounts where you can get more tax benefits. Also, you know, if you are an employee, look at maybe the flexible savings accounts. But you want to make sure you understand that with those FSAs, there may not be a carry over into the next year.
So if you don't use it, you lose it. And so extremely important that we understand what our options are. And as well as, we've got to look at multiple streams of income. Americans are going to have to take some responsibility in their idea of, what can I do? Because there are so many variables when it comes to the decisions that may happen in Washington.
So at this time, we need additional streams of income. We need to look at where the money is going, make sure you may have, you know, a side gig that may become your main gig. Position yourself for more cash on hand as well as more options for income streams. Extremely important.
BRIAN SOZZI: For those clients that are nearing retirement or have just retired, how have they-- what are their big biggest concerns around the election?
NICOLA SMITH JACKSON: Well, there are going to be some reductions around Medicare. And obviously, that can be scary because you're not able to hop into the job market and maybe, you know, overcoming the emotional or even the change. You're thinking that your life is kind of going into, you know, after you work so hard, going into the relaxation that we all much deserve. But that may change.
And so it's extremely important that we stay educated in knowing exactly what's happening concerning the health care and the bills that are onboard around, you know, the candidates. No matter who's in office, we have to live with this as Americans. And so we may need to be taking a look at, you know, our financial game plans with our families and some, you know healthy, strong family members that are going to have to help our elderly.
And so we are going to need to look at actions of additional streams of income as well as having that income working for us, putting it into the marketplace. And we've heard about the volatility that may be, you know, aboard because of the election. However, get professional help. And there are still some safe ways to invest your money and look at for the long haul. Because we will come through this.
ALEXIS CHRISTOFOROUS: We most certainly will. Lots of things to consider there this morning. Nicola Smith Jackson, thanks so much.
NICOLA SMITH JACKSON: Thank you.