The facts about health insurance exchanges in NC

[caption id="attachment_5395" align="alignleft" width="150"] courtesty Charlotte Observer[/caption]

by Karen Garloch, Charlotte Observer, September 29, 2013.

After years of partisan debate, public confusion and a Supreme Court challenge, the Affordable Care Act goes before consumers Tuesday when enrollment begins in the new online health insurance marketplace.

In North Carolina, 1.5 million uninsured residents will have the choice of 51 insurance plans offered by two private insurance companies.

About half of those consumers will be eligible for federal subsidies to make the insurance more affordable.

Under the new law, most adults under 65 will be required to have health insurance or pay a fine. The goal is to reduce the number of uninsured, estimated at 49 million, and provide more people with access to quality medical care.

In the Charlotte region, you’ll start hearing more about the “navigators” and other trained counselors who will offer one-on-one assistance with enrolling in the so-called insurance exchanges. They’ll set up shop in easy-to-find locations such free clinics, churches and shopping centers.

Those already covered by Medicare, Medicaid or an employer plan don’t need to do anything.

But if you’re uninsured or had trouble getting insurance because of a pre-existing condition, you’ll be able to go to a website to compare private insurance plans, determine if you qualify for subsidies, and purchase coverage.

If you’ve put off learning about the new law, it’s time to pay attention.

Q: What’s the deadline?

Enrollment starts Tuesday, but there’s no need to rush.

People must sign up by Dec. 15 to have insurance starting Jan. 1. But enrollment continues through March 31.

Plans sold after Dec. 15 will take effect later in 2014. But you can avoid a penalty if you sign up by March 31. After that, you’ll have to wait for the next open enrollment period in October 2014, unless you have a life-changing event, such as losing a job or getting a divorce.

“We’ll use all six months of open enrollment season,” said Karen Pollitz, a senior fellow at the Kaiser Family Foundation, a nonpartisan nonprofit that studies health care. “People don’t need to feel pressured to make a decision in October, or even by Jan. 1.”

Q: How will it work?

Most consumers will likely purchase insurance online at www.healthcare.gov. But they can also fill out paper applications or apply over the telephone.

It won’t be as simple as shopping on Amazon or buying a plane ticket online.

Consumers will face a variety of options, and they’ll have to provide an array of personal information, including Social Security numbers for identification as well as proof of income and citizenship.

If you’re using your home computer, you don’t have to complete the application in one sitting. You can stop at any point, save your work and pick up again later.

Q: Where to get help?

Three Charlotte-based organizations received federal grants to hire and train navigators who will provide free one-on-one assistance to people buying health insurance online. They are North Carolina MedAssist, Legal Services of the Southern Piedmont and C.W. Williams Community Health Center.

Other groups, such as Novant Health, Matthews Free Medical Clinic, Charlotte Community Health Clinic and the Mecklenburg County Health Department, will also be training “application counselors” to help with enrollment.

Throughout the six-month enrollment period, these helpers will fan out across the Carolinas, visiting community centers, school gyms, churches and libraries.

Independent insurance agents and brokers can also provide enrollment assistance. Make sure they are certified by the U.S. Centers for Medicare and Medicaid, which means they have training in the new marketplace.

In North Carolina, a telephone hotline will be set up where people can call to make appointments for enrollment assistance at locations across the state: 855-733-3711.

Q: Is everything ready?

Whether online exchanges will work properly when they open Tuesday is anyone’s guess. “I think we’ll be ready, but we have a lot of work ahead,” said Madison Hardee, a lawyer for Legal Services of the Southern Piedmont.

Because North Carolina chose to rely on the federal government’s exchange, it got less money for enrollment education and outreach than states that created their own exchanges.

Instead of $27 million, North Carolina received about $6.5 million for 36 agencies to hire and train navigators and other recruit volunteers to help with enrollment.

In Mecklenburg County, federal grants will pay for 11 full-time and part-time navigators who will provide 6,400 hours of assistance over 25 weeks, according to Lori Giang, executive director of MedAssist. Without the aid of other volunteer counselors, that wouldn’t be enough to enroll the 80,000 Mecklenburg residents who are eligible for premium subsidies, Giang said.

She and other advocates for the poor worry there won’t be enough help.

“People in rural parts of the state are going to have serious problems sitting down with someone, and the urban areas may get overwhelmed,” said Adam Linker, a policy analyst for the N.C. Justice Center.

Linker, who has been traveling around the state talking to residents about the new law, said many are confused. “The more people find out about the law, the more they realize how it will help them. But there are just still so many people who don’t know much about reform.”

Q: Who’s eligible for subsidies?

Across the country, an estimated 26 million low- and middle-income people will be eligible for premium assistance.

In North Carolina, about 869,000 of the 1.5 million uninsured will be eligible for financial assistance, according to estimates by Families USA, a national nonprofit for health care consumers.

Tax credits to subsidize premiums are available to those whose household incomes are from 100 percent to 400 percent of the federal poverty level. That would be: individuals with incomes of $11,490 to $45,960 and families of four with household incomes from $23,550 to $94,200.

So, even middle-income families can get help.

“A lot of young adults who are just starting out in their careers or may be part-time in school…are likely going to qualify for subsidies in the marketplaces,” said Kaiser’s Pollitz.

Q: What types of plans are available?

Every state exchange will offer plans at four levels: Bronze, Silver, Gold and Platinium.

Bronze plans will have the lowest premiums but cover only 60 percent of medical costs on average, so policy holders will have the most out-of-pocket expense for deductibles and copays. Platinum plans will have the highest premiums but cover 90 percent of the cost of care.

Out of more than a dozen insurers that sell individual policies in North Carolina, only two, Blue Cross and Blue Shield of North Carolina and Coventry Health Care of the Carolinas, have chosen to offer plans in the exchange. In South Carolina, four companies are participating.

In North Carolina, Blue Cross will offer 26 plans in all 100 counties. Coventry will offer 25 plans in 39 counties, including Mecklenburg.

North Carolina residents will have fewer policies to choose from than those in some other states, according to figures released by federal health officials last week. The average number of plans is 53 across 36 states that opted for federally run marketplaces instead of creating their own.

Joe Piemont, chief operating officer at Carolinas HealthCare System, cautioned consumers to make sure the plans they choose include the doctors and hospitals they want to use.

For example, Carolinas HealthCare worked with Coventry to develop a plan that is “predominantly exclusive” to Carolinas HealthCare doctors and hospitals, but the Charlotte-based hospital system is not included in Blue Cross’ “Blue Value” plan. Blue Cross officials said Carolinas HealthCare doctors and hospitals are included in 14 of the Blue Cross plans on the exchange.

Unlike Novant Health, Carolinas HealthCare is not providing counselors to help the uninsured enroll in the exchange. Instead, Piemont said the system will work with patients in an ad hoc manner, advising them to “choose their products wisely.”

“It’s going to be an interesting few weeks,” Piemont said. “(People) really have to take time to study it and make sure they understand what they’re selecting.”

Q: What else does the law require?

Along with the “individual mandate” to buy insurance, the Affordable Care Act also provides consumers protection against some longstanding discriminatory practices by insurance companies.

They’ll no longer be able to turn away or charge more to customers because of pre-existing medical conditions or charge older people exorbitant rates. They can’t charge higher premiums for women than men or set lifetime limits on benefits.

And every plan must cover 10 “essential” benefits, such as maternity care, and must also cover 100 percent of certain preventive care services, such as mammograms and colonoscopies.

Q: Is this universal health?

The new law continues to be a political hot button. But the new plan is not what some people think.

For one, it’s not universal health insurance. The number of insured Americans is expected to increase dramatically, but an estimated 33 million people, including some with the lowest incomes, will still be without coverage.

Second, it’s not government insurance. At each marketplace, or exchange, consumers will choose from private insurance plans offered by companies that choose to participate.

Third, it’s not free. Most people who qualify for premium subsidies will have to pay part of the premium and other out-of-pocket expenses.

Q: Will premiums be lower?

North Carolina residents will pay more than the national average, according to figures released last week by federal health officials.

Average premiums for a mid-range health insurance plan purchased on North Carolina’s exchange will be $369 a month before subsidies are applied, the federal report showed. The average monthly cost for mid-range coverage across 48 states will be $328, according to the U.S. Department of Health and Human Services.

Premiums will vary across North Carolina, depending on age, income, county of residence, deductibles and how many doctors consumers want in their network. For those eligible for subsidies, the out-of-pocket cost of premiums will drop. Some North Carolinians with low incomes will pay no monthly insurance premiums after federal subsidies are applied.

In general across the country, premiums will be higher for younger people than they are now, and lower for older people.

Here’s why:

Because the law prevents discrimination against people with pre-existing conditions, there will probably be in influx of higher-cost individuals who have previously been excluded from the market, according to the Kaiser Family Foundation.

To offset that increase in sick people, the Obama administration hopes to enroll more young healthy people who may not have bought insurance before but will now be required to have coverage or pay the penalty. These so-called “young invincibles” are considered ideal customers because they pay into the system but use it infrequently.

Premiums for these younger, healthier people may be higher than they are now because the law also prohibits insurance companies from charging higher premiums to customers who are older and sicker.

Also, because the law requires insurers to cover certain “essential” benefits, people who had purchased skimpier coverage in the past may see higher premiums, according to Kaiser. But they will probably see lower out-of-pocket costs because the law requires 100 percent coverage for many preventive services.

The new law does allow insurance companies to charge up to 50 percent more in premiums for tobacco users.

Q: How much will the subsidy be?

The size of the subsidy will be based on a sliding scale; the lower the income, the higher the subsidy.

Two examples:

• For a 45-year-old single person with a $23,000 annual income, the annual premium for a Silver insurance plan will be about $5,000. The federal government will subsidize $3,550, and the individual’s out-of-pocket contribution will be $121 per month, or $1,450 annually.

• For a family of four with an income of $35,300, the annual premium for a Silver plan will be about $12,500. The subsidy will be almost $11,000, and the family’s out-of-pocket will be $118 a month or $1,410 per year.

In the private market today, average annual premiums for employer-sponsored family health coverage reached $16,351 in 2013, up 4 percent from the year before, according to the Kaiser Family Foundation. Workers on average paid $4,565 toward the cost of their coverage.

The subsidies are tax credits that can be taken in advance. The money will be sent to the insurance company each month. Or you can choose to pay the premium up front and get the credit when you file the next year’s tax return. Some who receive premium help may also qualify for financial assistance to pay out-of-pocket costs, such as deductibles, copays and coinsurance.

Q: What about the Medicaid expansion?

North Carolina and South Carolina (along with more than 20 other states) chose not to accept federal reimbursement to expand Medicaid.

As a result, some of the poorest of the poor will not be eligible for insurance under the Affordable Care Act.

Medicaid expansion was the part of the law intended to provide insurance for people whose incomes are under 100 percent of the federal poverty level. The federal government promised to cover all of the extra cost for the first three years of that program. After 2017, the match would begin to fall over a few years to 90 percent.

But last year, when the Supreme Court upheld the constitutionality of the new law, it also decreed that states couldn’t be mandated to expand Medicaid.

Not anticipating that states would turn down federal assistance to expand Medicaid, the law’s authors designated the exchanges only for people with incomes from 100 percent to 400 percent of the federal poverty level. Those under the federal poverty level would be covered by the Medicaid expansion.

But without the expansion, half a million North Carolina residents and 284,000 in South Carolina will not qualify for Medicaid. And they also can’t buy insurance at the exchanges.

These are mostly healthy single adults without children who may be working full time but not earning more than $11,490 per year.

“You’re literally too poor to be eligible,” said Hardee, the Legal Services attorney.

Q: What will healthy young people do?

Many will be watching the reaction of the so-called “young invincibles,” young adults who don’t think they need insurance. Will they buy coverage or opt to pay the fines?

Today, premiums depend largely on age, gender and health status. But when insurers can’t charge more for sick people, the result will be that younger, healthy people will pay more to subsidize coverage for older, less healthy people.

In the first year, the penalty is $95 or 1 percent of income, whichever is greater. By 2016, the penalty will be $695 or 2.5 percent of income, whichever is greater.

To attract the young, the law offers customers up to age 30 a “catastrophic” plan with very low premiums and very high deductibles. It will cover three doctor visits as well as vaccinations and screenings. But you can’t get a subsidy for a catastrophic plan.

Q: Can you buy on the exchange if you already have insurance?

Yes. If you’re getting insurance now through an employer’s group plan, you can go to the new marketplace to check out the potential cost to switch. But you won’t qualify for tax credits because you’re already covered by a group plan. And without tax credits, the online marketplace will probably be more expensive than the plan you have.

Insurers are not required to sell through the exchanges. They will continue to offer individual insurance in the private market, but tax credits are available only to those who buy their insurance through the exchange.

Q: What about the employer mandate?

Businesses with fewer than 50 employees are not required to buy insurance for employees, but those with 50 or more employees must offer insurance or pay fines. That employer mandate has been postponed for a year, until January 2015.