By TARA SIEGEL BERNARD
But after much anticipation, the curtain will finally rise on the
exchanges next week, providing millions of consumers with an online
marketplace to compare health insurance plans and then buy the coverage
on the spot.
The exchanges are likely to be most attractive to people who qualify for
subsidized coverage. Individuals with low and moderate incomes may be
eligible for a tax credit, which can be used right away, like a gift
card, to reduce their monthly premiums. People with pre-existing
conditions will no longer be denied coverage or charged more (this
applies to most plans outside the exchanges, too). And all of the plans
on the exchanges will be required to cover a list of essential services,
from maternity care to mental health care.
“In today’s individual market, it’s like Swiss cheese coverage,” said
Sarah Dash, a research fellow at the Health Policy Institute at
Georgetown University. “Consumers should have an easier time figuring
out what they are getting for their money.”
But it’s still going to take some time to analyze the plans and their
costs, which are expected to vary widely across the states. And the
coverage may still pinch many families’ budgets. Fortunately, there’s a
six-month window, from now to March 31, for people to figure it all out.
Here’s some information to get you started:
Q. Where can I apply or get more information on the exchanges?
A. To avoid fraud artists, enter through the front door: Healthcare.gov.
From there, you can find links to the exchange offered in your state.
There may be technical glitches as the program gets started, so
alternatively, you can call 1-800-318-2596.
Q
. When does coverage go into effect?
A. You can apply as early as Oct. 1, but coverage won’t
begin until Jan. 1. The enrollment period for coverage in 2014 closes
on March 31, 2014. After that, you can enroll only if you have a major
life event like a job loss, birth, marriage or divorce.
Q. What sort of coverage will be offered?
A. All plans will have to provide the same set of essential benefits,
including prescriptions, preventive care, doctor visits, emergency
services and hospitalization (this also applies to most individual and
small-employer group plans sold outside of the exchanges). But plans can
offer additional benefits, or different numbers of services like
physical therapy, so you’ll need to do a side-by-side comparison to see
what fits your needs — or at least the needs you can anticipate.
Q. Are the plans sold on the exchange more comprehensive than plans outside?
A. There are four plan levels, each named for a
precious metal. They all generally offer the same essential benefits,
but their cost structures vary. The lower the premium, the higher the
out-of-pocket costs.
The bronze level plan, for instance, has the lowest premiums, but will
require consumers to shoulder more costs out of pocket. They generally
cover 60 percent of a typical population’s out-of-pocket costs, and
include deductibles, co-payments and coinsurance. The silver plans cover
70 percent; gold, 80 percent; while platinum covers 90 percent (and
therefore carries the highest premiums).
If you buy a plan on an exchange, your annual out-of-pocket costs cannot
exceed $6,350 for individuals and $12,700 for a family of two or more
in 2014. Catastrophic plans are also available to people under age 30 or
those suffering a financial hardship. These carry high deductibles
(equivalent to the out-of-pocket maximum, or $6,350 for a single person,
in 2014). You cannot apply tax credits to these plans, either.
Premiums will vary
across the states because of a variety of factors, like market
competition, the underlying cost of care and the negotiating power of
the exchanges, according to Kaiser research.
Q. If the costs with plan levels are similar, how will plans differ within the metal levels?
A. Networks of doctors and hospitals will differ, and
cost-sharing structures may also vary. One plan might have lower
deductibles and higher co-pays, whereas another plan might have a
separate deductible for prescriptions. Various medications may also be
covered differently. “If you are someone who is taking medicines, make
sure you know what your drugs will cost in the various plans being
offered,” said Cheryl Fish-Parcham, deputy director of health policy at
Families USA, a Washington consumer advocacy group.
Q. Will I be eligible for a premium tax credit (subsidized coverage)?
A. People with income between 100 percent of the
poverty line (or about $23,550 for a family of four) and 400 percent of
poverty ($94,200 for a family of four) are eligible for a tax credit to
defray premium costs. (All income eligibility is based on your modified
adjusted gross income; the online version of this column links to a guide explaining how that is calculated).
The tax credits are set up so that consumers will not have to pay more
than a certain percentage of their income, ranging from 2 percent for
those with incomes of up to 133 percent of the poverty level ($15,282
for a single and $31,322 for a family of four) to 9.5 percent for those
with income of 300 to 400 percent of the poverty level, according to the
Center on Budget and Policy Priorities. The dollar amounts of the
credits are calculated based on the costs of the second-to-lowest-cost
silver plan available to you.
Kaiser has a calculator that can give you an idea of your eligibility.
Q. Can I get help with my out-of-pocket expenses, like deductibles?
A. People with incomes between 100 percent of the
federal poverty line ($23,550 for a family of four) and 250 percent
($58,875 for a family of four) are also eligible for cost-sharing reductions,
which means you’ll pay less for items including deductibles and
co-payments, and you’ll have lower out-of-pocket maximums.
There is a big caveat: you can qualify for the reductions only if you
buy a silver plan. When choosing a silver plan — and compare them
closely, because they will differ — the exchange Web site will
automatically show what you will pay, with the cost-sharing reductions
included, according to the Center on Budget and Policy Priorities.
Even if you’re tempted by the bronze plans’ lower premiums, remember
you’ll probably end up paying more for out-of-pocket costs. For people
who qualify for both premium and cost-sharing subsidies, the silver plan
will usually be the better deal, Ms. Fish-Parcham said.
Q. Should I use all of my subsidy at once? How can I avoid owing taxes?
A. The premium subsidies are delivered in the form of a
refundable tax credit, which can be used immediately to reduce your
monthly premiums.
You can use it all right away, or you can use part of it, or none at
all. If you expect your income to remain the same, you might use the
entire credit. But if your income is likely to rise, it may pay to use
only a portion of the subsidy. That way, you’ll avoid owing money to the I.R.S. at tax time.
If your income does change, report it to the exchange. If your income
drops, you may be eligible for a larger credit. Changes in family size
should also be reported. “It will all get reconciled on your taxes in
the spring of 2015,” said Karen Pollitz, a senior fellow at the Kaiser Family Foundation.
Q. How can I find out if my doctor accepts exchange-based insurance?
A. Many of the insurance providers’ networks of doctors
and hospitals will be narrower than are typically found in commercial
insurance, as my colleague reported
this week. So just because your doctor accepts, say, a Blue Cross plan
provided by your employer, that doesn’t necessarily mean the doctor will
take the same carrier’s plan offered on the exchange.
The plans will be required to provide a directory that lists their
network’s providers, Ms. Pollitz said, so inspect them carefully.
Q. How will I know if my drugs are covered by the plans?
A. The exchanges must include a summary of benefits and
coverage for each plan. That includes information about what your
co-payments would be for generic, brand name and specialty drugs. It
should also provide a Web link to the plan’s list of covered drugs and
how they are categorized by a particular plan, said Ms. Fish-Parcham.
Q. If I have employer-based coverage, can I go to the exchange for coverage?
A. You can, but you probably won’t want to. Your
employer’s plan is usually a better deal. Many employers heavily
subsidize your premiums and you can pay for your coverage using pretax
dollars, something you can’t do if you buy coverage on the exchange.
“Plus, employer plans are typically fairly generous,” said Lynn Quincy, a senior policy analyst at Consumers Union.
Besides, if your employer offers you coverage, you probably won’t
qualify for a tax credit unless your share of the premium (for the
lowest-cost plan for individual coverage offered by your employer) is
more than 9.5 percent of your modified adjusted gross income, Ms. Quincy
explained.
If your employer’s insurance plan doesn’t cover 60 percent of medical
costs, on average (what’s known as “minimum value”) you may also qualify
for subsidized coverage. Your employer is supposed to let you know
where the plan falls in terms of minimum costs. “If you are spending
huge amounts out of pocket each year and you have a high deductible,
it’s worth looking at what your possibilities are,” said Sara R.
Collins, vice president of the health care coverage and access program
at the Commonwealth Fund.
Q. Am I eligible for Medicaid?
A. The health care law aimed to expand Medicaid so that
everyone under age 65 would qualify if they earned up to 138 percent of
the federal poverty level (that’s about $16,000 for an individual and
$32,500 for a family of four in 2014). But the Supreme Court ruled in
June that the decision to expand Medicaid is up to the states — and only
26 states have decided to move forward, according to Kaiser.
Q. So if I’m poor but not eligible for Medicaid, can I get insurance on the exchange?
A. Yes, but unfortunately, many people in this
situation won’t be able to afford it. People who don’t qualify for their
state’s Medicaid program but earn too little to qualify for subsidies
on the exchange will have to pay full price for the coverage offered on the exchanges. So if you can’t get Medicaid and
your income is below 100 percent of the poverty level, you will not be
eligible for subsidized coverage on the exchange.
Q. What if I’m self-employed or own a small business?
A. If you’re self-employed with no employees, you can shop for coverage on the exchange.
If you have fewer than 50 employees, you can get coverage for yourself and your workers though the Small Business Health Options program, known as the SHOP Marketplace.
“Small employers have always wanted to have the buying clout of a large
employer and the SHOP exchanges offer them just that,” said Kevin Lucia, project director at Georgetown University’s Health Policy Institute.
Q. What are the penalties for not having coverage? Are there any exceptions?
A. Most people will be required to have insurance, with
some exceptions. You are not required to buy insurance if: the cost of
insurance premiums would exceed 8 percent of your income, your income is
below the threshold for filing taxes, you have a certified hardship, or
you would have qualified for Medicaid but live in a state that did not
expand the program. Illegal immigrants, the incarcerated, members of
Indian tribes and those who qualify for certain religious reasons are
also exempt.
Everyone else will pay a penalty. In 2014, it will cost you $95 or
approximately 1 percent of your income, whichever is greater. The
penalties will rise each year.Source: http://www.nytimes.com/2013/09/28/your-money/health-insurance/a-guide-to-the-new-health-insurance-exchanges.html?ref=your-money-email&nl=your-money&emc=edit_my_20130930&_r=0
