The Obama administration released a report on the options available in the new health insurance exchanges, which begin operating Oct. 1 as the country heads toward full implementation of the Affordable Care Act.
Individuals can use the exchanges formally known as health insurance marketplaces to shop for insurance if they do not have insurance through their employer. Under terms of the ACA, most Americans must have insurance starting in 2014 or pay a tax penalty the following year. People with incomes between 100% and 400% of the federal poverty level will be eligible for premium assistance from the federal government for insurance obtained in the exchanges.
Enrollment through the exchanges for 2014 continues through March 31 of next year. For people enrolled by Dec. 15, 2013, insurance will go into effect Jan. 1.
When the exchanges open, consumers will be able to find out whether they qualify for premium assistance and compare plans side-by-side based on pricing, quality and benefits. No one can be denied coverage because of a preexisting condition.
The report focuses on the 36 states where HHS will run the exchange or do so in partnership with the state. The 14 other states chose to run their own exchanges, which are expected to have similar insurance options. In all, 7 million people are projected to obtain insurance through the exchanges next year, according to the Congressional Budget Office.
In the 36 states in the report, consumers will have an average of 53 qualified health plan choices. Plans will be categorized as either platinum, gold, silver, or bronze, with bronze plans featuring the lowest premiums but higher cost-sharing. Young adults will also have the option of purchasing a catastrophic plan, thus increasing their number of choices to 57 on average.
About 95% of consumers will have a choice of two or more health insurance issuers, often many more. About one in four insurance companies is offering health plans in the individual market for the first time in 2014, an HHS news release noted.
The report also gives an overview of pricing and the number of coverage options across the nation. It finds that the average premium nationally for the second-lowest cost silver plan will be $328 before tax credits, or 16% below CBO estimates. About 95% of uninsured people eligible for the exchange live in a state where their average premium is lower than projections. States with the lowest premiums have more than twice the number of insurance companies offering plans than states with the highest premiums.
In the report, premium and plan options are broken down by state where information is available. For example, a 27-year old living in Dallas who makes $25,000 per year will pay $74 per month for the lowest-cost bronze plan and $139 per month for the lowest-cost silver plan, taking into account tax credits. That person will be able to choose from among 43 qualified health plans.
For a family of four in Dallas with an income of $50,000 per year, the lowest bronze plan would cost $26 per month, taking into account tax credits. The majority (around six in 10) of those who are uninsured today will be able to find coverage for $100 or less per month, taking into account premium tax credits and Medicaid coverage, according to a news release.
States have the option of expanding Medicaid to cover all adults making less than 133% of federal poverty, using federal funds to cover most of the additional costs. However, some states have said they will not expand the program, citing the potential to incur significant administrative and other costs down the line.
That decision may leave people making less than 100% of federal poverty with few affordable options in those states, since language in the ACA limits eligibility for premium assistance in the exchanges to those making between 100% and 400% of federal poverty. (When the law was drafted, the assumption was that those making less than federal poverty would be enrolled in Medicaid in all states. That was before the Supreme Courts 2012 decision on the constitutionality of the law made Medicaid expansion optional for states). Individuals who are eligible for Medicaid and whose states do not expand Medicaid are exempt from the mandate to buy insurance.
The latest on where states stand regarding Medicaid expansion, courtesy of the Advisory Board Company: http://bit.ly/15RUdhr.
Questions and answers
The Texas Association of Health Underwriters posted the answers to some of the most common questions consumers have about the ACA (the information applies to consumers nationwide):
Am I affected by the individual mandate for health insurance coverage?
Almost everyone is affected by the individual mandate for health insurance coverage, particularly if someone does not currently have health insurance coverage. If consumers can afford health insurance and do not have coverage in 2014, they might have to pay a penalty. They might also have to pay for all of their healthcare. The Congressional Budget Office estimates that in 2016, 24 million people will be exempted from the mandates penalties. Individuals are exempt from the coverage mandate if the premium costs exceed 8% of their household income, or their household incomes are below the minimum threshold for filing a tax return. Exemption categories also include individuals eligible for Medicaid under the health laws new rules but whose states chose not to expand their programs, prisoners, Native Americans eligible for care through the Indian Health Care service, immigrants who are in the country illegally, religious objectors to insurance coverage, healthcare-sharing ministry members and individuals experiencing coverage gaps of less than three consecutive months.
Do I have to buy my insurance from one of the new health insurance exchanges?
Health insurance coverage choices will remain outside the exchanges. However, if consumers want a subsidy or employers want a tax credit, then they will need to purchase coverage within an exchange. Both will need to weigh the pros and cons of whether purchasing through an exchange is best for them.
How do I know if I qualify for a subsidy?
Federal subsidies will be available on a sliding-scale basis for individuals and families who purchase their coverage through an exchange and whose income falls between 100% and 400% of the federal poverty level. For a family of four this range is $23,500-$94,200. In general, employees who are offered insurance through work are not eligible for subsidized exchange coverage unless the coverage fails to meet certain federal criteria. Individuals offered coverage from their employer will be eligible for a subsidy if the cost of that coverage exceeds 9.5% of their household income or does not have an actuarial value of 60%.
Are college students required to have health insurance?
College students who have insurance through their college or university will meet the laws coverage requirement. If a student cannot afford the insurance offered by the school, and they do not earn enough to trigger the income requirement of the legislation, they will not be required to carry health insurance. If a student wants health insurance and he or she is under 26, the legislation allows parents to include their children on their health plans.
Im a small business owner and am unclear what part of the Affordable Care Act will affect me and when.
Small businesses with fewer than 50 employees are not required to provide health insurance coverage for employees.
Consumers can get help finding coverage in the exchanges through a number of different resources. They can get more information through HealthCare.gov, or cuidadodesalud.gov, or can participate in online web chats or call 800-318-2596 toll free (TTY: 855-889-4325) to speak with trained customer service representatives, with translation services available in 150 languages.
Community health centers, designated navigators and other organizations are available in local communities to provide in-person help with coverage choices. Local libraries will help consumers learn about their options, and hundreds of Champions for Coverage, which include public and private organizations all across the country, are helping people learn about their options and enroll in affordable coverage.
Report on health insurance rates: http://aspe.hhs.gov/health/reports/2013/MarketplacePremiums/ib_marketplace_premiums.cfm
Additional data on rates: http://aspe.hhs.gov/health/reports/2013/MarketplacePremiums/datasheet_home.cfm