Q&A on Obamacare
by David Wahlberg, Wisconsin State Journal
Three-and-a-half years after President Obama signed the Affordable Care Act, a key feature of the law — an exchange, or government-run marketplace where people can shop for private health insurance — opened for enrollment October 1.
Most people, who get insurance through their job or government programs, won’t use the exchange.
But many people who are uninsured, buy insurance on the individual market or are being shifted off Medicaid are expected to use it. Small businesses can, too.
They can apply online, by phone, with a helper or by mail for insurance plans with a variety of premiums and coverage levels. People who make up to four times the federal poverty level can get financial help to reduce their costs.
Coverage begins Jan. 1, the same day most Americans must have insurance or pay a penalty.
Despite legal and political battles over the law, exchanges are expected to operate in every state.
Confused? Here are answers to frequently asked questions about the law and the exchange:
1. Do I have to use the exchange, or marketplace?
No, but it might offer the best coverage available for people who are uninsured, are losing their insurance, have a hard time finding affordable coverage on the individual market or have been enrolled in special high-risk plans.
Private insurance plans will still be available outside of the exchange.
Most people will keep getting insurance the way they have — through their job, Medicare, Medicaid or programs such as veterans’ health. People with access to employer insurance can use the exchange. But if their employer’s insurance is considered comprehensive and affordable, with premiums less than 9.5 percent of the employee’s salary, they won’t qualify for subsidies.
2. If I use the exchange, will my insurance cost more than it does now?
It depends. In general, younger, healthy people — especially men — might pay more. Older people, especially those with medical conditions, might pay less.
Insurance companies can no longer exclude people with medical conditions or charge them more. They have to provide 10 “essential health benefits” — including maternity care and mental health services, which some plans don’t offer today. Insurers also have to stop charging women more, and they can’t charge older people as much more as before.
So, younger people might pay higher premiums than they do today and older people might see lower premiums.
People age 30 and younger or with very low incomes can buy cheaper, catastrophic plans.
3. How do the subsidies work?
People who use the exchange can qualify for two types of subsidies, or tax credits, to reduce premiums or out-of-pocket costs. They can use the subsidies up front, immediately reducing their costs, or through refunds after they file tax returns.
The first type of subsidy will lower premiums. It is for people whose incomes are between 100 percent and 400 percent of the poverty level, or up to $45,960 for a single person and $94,200 for a family of four this year.
The premium subsidy limits the percentage of income people must pay, on a sliding-fee scale, for a mid-level plan on the exchange. People at 150 percent of the poverty level won’t pay more than 4 percent of their income, for example, and those at 400 percent won’t pay more than 9.5 percent.
A 40-year-old who makes $30,000 a year can get a subsidy of about $112 a month to reduce a typical monthly premium of $321 to $209, according to a Kaiser analysis. The same subsidy could be used for cheaper plans.
The second type of subsidy reduces deductibles, co-payments and other out-of-pocket costs for people up to 250 percent of the poverty level if they buy a mid-level plan.
4. If I have insurance through my job, does anything change?
Most employers that provide insurance to employees today are expected to keep doing so. Some could eventually drop coverage and, starting in 2015, pay a penalty.
“I can’t think of a single client that is dropping coverage” in 2014, said Karen Breitnauer, a compliance attorney in the Madison, Wis., office of M3 Insurance, a brokerage firm that works with many employers in the area. “The reason: Nobody else is. They want to be competitive and attract good employees.”
The cost of employer coverage could go up because of fees imposed by the law, Breitnauer said.
Employer plans will have to comply with new rules next year, such as eliminating annual coverage caps and limiting waiting periods to 90 days. Already, the law requires them to allow children up to 26 to be on their parents’ plan and have no lifetime coverage limits.
Some employer plans that existed before the law was passed in 2010 are “grandfathered.” They don’t have to follow some rules, such as offering the 10 essential health benefits and providing free preventive care. If these plans make significant changes, however, they will lose grandfathered status.
Some employers self-insure, meaning they pay benefits directly instead of buying insurance coverage. Such plans must follow some of the new rules but not others.
In 2017, states can let large employers start using the exchange to shop for employee coverage. In 2018, employers offering high-end “Cadillac” plans will have to start paying a tax.
5. My employer doesn’t offer insurance. Will it have to?
No, but incentives and penalties will encourage employers to offer insurance.
Businesses with up to 50 employees can use the exchange to shop for employee insurance next year. Those with fewer than 25 employees, whose average annual wages are less than $50,000, can get tax credits to help pay for coverage.
Employers with at least 50 full-time employees (at least 30 hours a week) that don’t offer insurance will have to pay an annual penalty of $2,000 per worker, not including the first 30 workers, starting in 2015. If employers offer coverage that isn’t considered affordable, they’ll have to pay $3,000 for each worker who gets a subsidy on the exchange.
6. What are the 10 essential health benefits?
They are benefit categories all plans must include: outpatient care, emergency services, hospitalization, maternity and newborn care, mental health and substance abuse services, prescription drugs, lab services, pediatric services, preventive/wellness services and chronic disease management, and rehabilitative and habilitative (gaining a function that was not already there) services.
7. I’m on Medicaid. Does anything change for me?
Most people on Medicaid won’t see any changes from the law.
8. I’m on Medicare. Does anything change for me?
People on Medicare won’t do anything differently. They’ll still use medicare.gov, not the exchange, to sign-up for Medicare plans.
Medicare enrollees have been getting additional benefits from the law, including free preventive services and a discount on some prescription drugs.
9. If I want to use the exchange, how do I sign up?
The best place to start is healthcare.gov. You can enter your information, shop for plans and fill out an application. You can also call the exchange at 800-318-2596.
You can apply by yourself. But if you want assistance, you can find trained helpers. You can also check with your local library or public health department.
A list of helpers will be available at healthcare.gov.
Enrollment begins Tuesday and continues through March 31. To get coverage by Jan. 1, you must sign up by Dec. 15.
“It’s good to explore options early,” said Donna Friedsam, health policy programs director for the UW-Madison Population Health Institute. But you don't have to enroll right away. “Don’t panic,” Friedsam said.
The next enrollment period, for coverage in 2015, will be Oct. 15 to Dec. 7, 2014. People can sign up between enrollment periods if they have life-changing events, such as death of a spouse, birth of a child, loss of a job or a move to another coverage area.
10. What kind of insurance is available on the exchange?
Coverage comes in four main tiers: platinum, gold, silver and bronze. Platinum plans have the highest premiums and cover 90 percent of health care costs. Bronze plans have the lowest premiums and cover 60 percent of costs. Cheaper catastrophic plans are available to people 30 and younger or with very low incomes.
11. What if I don’t want insurance? What is the penalty?
Most people will have to pay a penalty if they don’t have insurance beginning Jan. 1. The fine is $95 (or 1 percent of income exceeding the tax filing threshold, which was $9,750 for an individual for 2012) next year, $325 (or 2 percent of such income) in 2015 and $695 (or 2.5 percent of such income) in 2016.
The penalties will be assessed through income tax returns, which will ask for proof of insurance.
People exempt from penalties include those who don’t make enough money to file income taxes, those who would have to pay more than 8 percent of income for insurance and those who would have qualified for the law’s full Medicaid expansion.
Other groups that don’t have the pay the penalty are people with religious exemptions, members of Indian tribes and two groups that aren’t allowed to use the exchange: undocumented immigrants and the incarcerated.
12. What if Congress overturns or defunds the Affordable Care Act?
The Republican-controlled House of Representatives has voted to repeal the law dozens of times, but the action hasn’t gone anywhere in the Democrat-controlled Senate.
Some House Republicans want to defund the law through negotiations over the government’s spending authority and debt limit. But the Senate and White House are unlikely to allow that.
October 9, 2013