Health reform’s next big kickoff
June Bennett is excited about the federal health insurance exchanges that will open Oct. 1.
Mostly her excitement centers on the federal tax subsidies many people will qualify for to help them pay for insurance coverage.
That’s because Bennett, at 64, of Fredericksburg, is too young for Medicare. A single, non-disabled adult with no minor children, she doesn’t qualify for Medicaid in Virginia. And because her one-woman cleaning business brings in just about $11,000 a year, she can’t afford the $185-a-month insurance policy she found.
“It’s just not in my budget at this time to add another $185 a month for health insurance right now,” Bennett said.
Insurance hasn’t been within Stafford resident Laura Pantazis’ budget either. That’s because Pantazis, 32, doesn’t have insurance through her job, and she does have a pre-existing condition: Ehlers–Danlos syndrome, a joint disorder. Essentially, her joints dislocate. While it no longer requires medical treatment—Pantazis just relocates her joints herself—it meant the last time she shopped for health insurance, her premium would have been $780 a month.
“The payments that they were asking me to pay were higher than my house payment,” Pantazis said. “It’s literally cheaper to pay out of pocket and just hope that nothing happens.”
The Affordable Care Act bars insurance companies from charging people with pre-existing conditions, such as Pantazis, higher premiums.
Bennett and Pantazis are two among millions of uninsured Americans who could find insurance easier to come by when the federal insurance exchange, or marketplace, opens up Oct. 1.
It’s difficult to estimate how many people might shop for insurance through the exchanges.
The Congressional Budget Office earlier this year estimated 7 million people nationwide might buy insurance through exchanges by 2015.
Federal health officials estimate more than 844,000 Virginians are uninsured and eligible to buy insurance through the exchange, and that 92 percent of those—about 775,000—could qualify for the exchange tax subsidies to help pay for premiums or for Medicaid if Virginia were to expand that program.
Insurance through the exchange isn’t free—those who enroll will pay a monthly premium, which can’t be more than a certain percentage of their income for those making less than 400 percent of the poverty level. And it isn’t a government program; these are private insurance plans offered by commercial carriers, although government dollars would help pay for premiums for people who qualify for tax subsidies.
People who aren’t insured and don’t get coverage—or who let it lapse through non-payment of premiums—will face a tax penalty. It’s low the first year at $95, or 1 percent of a person’s yearly income. But it jumps in future years, and by 2016, the fee for not having insurance is 2.5 percent of a person’s income or $695, whichever is higher.
There is still a lot of debate swirling around the 3-year-old law—Republicans want to defund it, lawmakers in states like Virginia don’t want to expand Medicaid and the requirements on larger businesses to provide comprehensive coverage to their employees have been postponed a year. But for now, the exchange market for individuals is poised to make an impact statewide and nationally.
WHERE THINGS STAND
The exchanges are due to open for people to start signing up for insurance plans on Oct. 1, although coverage won’t begin until Jan. 1. Like other private insurance, the exchange plans have a closing period, in this case March 2014. If you haven’t signed up by then, you’ll have to wait until the next open enrollment period.
Virginia is one of 34 states that have chosen to to use the federal insurance marketplace rather than setting up their own.
But the insurance plans sold to Virginians through that marketplace will be from companies that already have networks in Virginia, several of them familiar names like Anthem.
Nine health insurance carriers have offered plans for individuals in Virginia, six have offered plans for small group businesses, and 13 carriers are offering dental plans, although some of those carriers are different names for the same umbrella company. The law doesn’t mandate dental coverage as an essential benefit for adults.
While the state has signed off on those plans, the federal government had not as of Friday.
Still, with less than three weeks to go before the exchanges open, the federal government insists it will meet the Oct. 1 deadline.
HOW TO SIGN UP
Signing up for coverage is where things start to get complicated. The plans offered to Virginians through the exchange are many and varied.
Plans in the exchanges are ranked by a metal-named tier system—bronze for cheaper plans offering minimal coverage, silver for plans offering lower deductibles and more coverage, gold and platinum for more expensive plans offering more comprehensive coverage.
The ACA also allows companies to charge different rates to smokers, so each of those plans comes with a higher price tag for them. All told, there were more than 500 variations in plans proposed in Virginia, according to a state official in June.
Not all of those are available in all areas of the state because companies are offering plans where they already have provider networks.
In the Fredericksburg area, people buying exchange insurance will choose from plans offered by Anthem HealthKeepers, Kaiser Mid-Atlantic and Optima.
As of Oct. 1, Virginians should be able to look at all those plans online, at the government’s exchange website, healthcare.gov.
Currently that site has a lot of answers to questions about coverage and how it will work.
If you’re not a confident Internet user, the federal government has hired people, called navigators, to help you figure out the exchange and choose a plan.
That navigator in the Fredericksburg area is Bill Botts, who will also be training volunteer assistants. Botts and Dr. Chris Lillis will be at a community forum on the ACA and the health exchanges on Monday, Sept. 23, from 7-9 p.m. at the Central Rappahannock Regional Headquarters Library.
When it does come time to sign up, you’ll need your wage and tax information, especially if you think you’ll be eligible for federal subsidies.
Beginning Oct. 1, you can go to healthcare.gov to research plan options, costs and whether you qualify for a subsidy.
Pantazis has been preparing, looking up information online and reading a book about the new law—she even read some of the law itself, which is hundreds of pages long.
Before, she said, insurance shopping “just became too frustrating. Because nothing was ever affordable … I’ve actually really been looking forward to this starting up.”
HEALTH INSURANCE PRICE TAG
Cost of insurance under the new Virginia marketplace as well as in other states is still an unanswered question.
Federal officials say you can find out the costs of premiums for the various plans when the marketplace opens on Oct. 1, and that you also find out whether you qualify for help in paying for those premiums by applying for coverage through the marketplace—again, not until Oct. 1.
The cost of individual plans hasn’t been finalized. But the Kaiser Family Foundation studied proposed plans in various states, including Virginia.
According to its analysis, which in Virginia focused on Richmond, a person making $28,725 per year (250 percent of the poverty level) could expect to pay an average of $193 a month for a silver plan after receiving subsidies.
The law caps the amount people at certain income levels will have to pay out of pocket for health insurance, measuring the cap as a percentage of income. The federal government is offering tax subsidies to people who qualify—based on income—to help pay for the rest of the cost of insurance premiums above that cap.
The credits are available to people who can’t get affordable, comprehensive coverage through their jobs, and whose household income is less than 400 percent of the federal poverty level, which this year is about $46,000 for an individual.
Individuals with yearly income between about $11,500 and $45,960 should qualify for subsidies, according to healthcare.gov. For a family of four, the income levels for subsidy help ranges from $23,550 to $94,200.
The original law intended for states to expand Medicaid eligibility to cover lower-income people. State expansion of Medicaid eligibility, to cover people making up to 133 percent of the poverty level, was a major part of the Affordable Care Act as originally proposed.
But last summer’s Supreme Court ruling that upheld the constitutionality of the ACA as a whole said that Medicaid expansion was optional for states. Virginia has so far opted not to expand.
That means there’s a hole in which some people will fall—people whose incomes are low enough that they could have qualified for expanded Medicaid, but are also too low to qualify for subsidy help in buying exchange insurance.
In Virginia, Medicaid covers people with disabilities, adults with minor children and some other groups, but does not cover non-disabled adults with no minor children.
In states like Virginia that didn’t expand Medicaid, people who would have qualified for Medicaid under the expansion and are now in a gap where they don’t make enough to get subsidies, are exempt from paying the annual fee for not having insurance.
WHO MIGHT BUY MARKETPLACE INSURANCE?
The idea of the new insurance exchange is to create a central shopping point for those buying insurance, and to provide help to make it less expensive for those with lower incomes.
People who don’t have insurance and can’t get it through work, can’t afford private insurance plans and don’t qualify for Medicare or Medicaid, the exchange is meant for you.
If you currently are on Medicare, you don’t need the exchange. If you currently are eligible for Medicaid in Virginia, you’ll stay on that program. If you get comprehensive insurance through your employer and that situation isn’t changing, then you don’t need the exchange. If you’re already paying for a private insurance plan, if you’re in Tricare or veterans health programs, you don’t need the exchange.
Small businesses, with 50 or fewer employees, can use the exchange, but much of the attention has been focused on the individual market.
The individual exchange is meant for those who don’t have insurance through an employer or a government program. That applies to June Bennett, of Fredericksburg, who is self-employed and ineligible for government programs, and Laura Pantazis, of Stafford, who works for her mother, an attorney. Pantazis’ mother gets insurance through Pantazis’ father’s plan, and the cost of business insurance to just insure Pantazis was prohibitive.
Both Bennett and Pantazis want insurance and have shopped for it before, but couldn’t afford the premiums.
“I have adult children who keep saying ‘Mom, you really should sacrifice somehow and get your own health insurance,’” Bennett said. “But again, it really has not been doable in my budget.”
Bennett goes to a Fredericksburg community health center for most care; she had to call around to find a doctor who could do an MRI on an injured knee for an affordable price.
Pantazis pays out of pocket and crosses her fingers she doesn’t get anything worse than the flu.
“I try to wait it out if I can,” Pantazis said. “There’s nothing more frustrating than going to the doctor, paying out of pocket just to be told wait it out.”
Locally, a community forum on the Affordable Care Act and the health insurance marketplace is scheduled fro 7-9 p.m. on Sept. 23 at the library headquarters on Caroline Street. There will be a question-and-answer session following presentations by Dr. Chris Lillis and Bill Botts, the local ACA navigator.
Also, for more information on health reform: healthcare.gov, 800/318-2596, TTY 855/889-4325, kff.org/health-reform.
Chelyen Davis: 540/368-5028