Health care reform takes some big steps starting in October, and that raises questions for consumers in Nebraska and Iowa, namely: What will happen to me?
Individual situations vary, but we've found answers to some basic questions that start to clear up the future under the Affordable Care Act, also known as Obamacare. One the other hand, health care is still a hot political issue, which means changes are still possible as provisions of the new law roll out.
Insurance companies plan to offer policies through online state marketplaces, or exchanges, that open Oct. 1. The policies' coverage will take effect Jan. 1.
Four companies — Blue Cross Blue Shield of Nebraska, Coventry Health Care, CoOportunity Health and Health Alliance Midwest — plan to offer insurance through the Nebraska exchange. Coventry, CoOportunity and Health Alliance also plan to offer individual insurance in Iowa's exchange, along with Gunderson Health Plan, Avera Health Plans and Sanford Health.
The answers are compiled from interviews with Cliff Gold, co-founder and chief operating officer of CoOportunity of Des Moines; Andy Williams, a spokesman for Blue Cross in Omaha; state officials from Iowa and Nebraska; and government websites. Many of the questions arose during a recent statewide tour with The World-Herald's livewellnebraska.com.
Q. I've got decent, reasonably priced insurance through my job. Will anything change for me Jan. 1?
A. If you work for a business with 50 or more employees, your coverage probably won't change, but you and your boss will have some added fees and taxes: a $63-a-year transitional reinsurance fee per covered person; a health insurance tax that may raise premiums by about 2.5 percent; and a patient-centered outcomes research fee of $2 per covered person for 2014. If your employer has between two and 49 employees, company insurance must have 10 “essential coverages” to qualify. Adding required coverages, including maternity and pediatric dental and vision coverage, probably will raise your premiums.
Q. Are all those effects the same whether my employer is self-insured or buys insurance coverage?
Q. Who will qualify for a government subsidy on the new health exchanges?
A. A study by Families USA estimated 169,000 Nebraskans and 254,000 Iowans will be eligible. You don't qualify if you are covered by Medicare or Medicaid. You may qualify for a subsidy if your employer doesn't offer insurance or if your out-of-pocket spending with your employer's plan is more than 9.5 percent of your family income, which makes it “unaffordable” under the law. The law says people may qualify if their income is between 100 percent and 400 percent of the federal poverty level. That's between $11,490 and $45,960 for a single person, $15,510 and $62,040 for a couple and $23,550 to $94,200 for a family of four.
Q. How does Medicaid fit in?
A. Because of Affordable Care Act rules and a U.S. Supreme Court ruling, some low-income Nebraskans won't qualify for either Medicaid or Obamacare subsidies. As enacted, Obamacare required states to expand Medicaid eligibility to anyone making up to 138 percent of the federal poverty level, which would eliminate their need to buy private insurance. But the Supreme Court ruled that is optional for states, and Nebraska has not expanded eligibility. Nebraska doesn't use federal poverty levels to determine Medicaid eligibility, but some people with incomes below the 100 percent level do not qualify for Medicaid. That means they make too much money to qualify for Medicaid in Nebraska but less than the 100 percent of poverty level minimum for subsidies under the Affordable Care Act.
Q. What about Medicaid in Iowa?
A. Iowa is adopting a form of Medicaid expansion and apparently would not have an eligibility gap between Medicaid and Obamacare subsidies. In states that expand Medicaid coverage, people who make up to 138 percent of the federal poverty level would be eligible for Medicaid but not subsidies.
Q. How much of a subsidy will I get?
A. The lower your income, the bigger the subsidy. A Kaiser Foundation subsidy calculator estimates that a single nonsmoker making $30,000 a year would receive a $507 subsidy and pay $2,512 a year for midlevel coverage under the exchange. But amounts will vary from state to state, depending on the policies offered.
Q. How can I determine whether I qualify for a subsidy?
A. Go to your state's online insurance exchange when it opens on Oct. 1 and fill out a three-page form (11 pages for a family) giving your salary and other information, including whether your employer offers affordable coverage. The facts are “self-attesting,” which means they won't be checked until later. The online exchange will tell you whether you qualify for a subsidy.
Q. If I qualify, how do I get the subsidy?
A. The subsidy reduces the monthly health insurance premium you pay. The government pays the subsidy amount to the insurer. When you file your tax return, the amounts will be reconciled, along with the income and other information you listed on your subsidy application.
Q. Could that reconciliation cause problems?
A. If you listed your income too low on the subsidy application, you might have to pay back some or all of the subsidy. If you said your employer's insurance wasn't affordable and it actually was, you might have to pay back the whole thing.
Q. Could one spouse qualify for a subsidy but not the other?
A. Yes, because individuals are rated separately on subsidies. Some employers' policies may be much more expensive for spouses and dependents, and the law doesn't require employers to offer insurance to family members. One spouse might have an affordable employer policy, while the other and the dependents might qualify for a subsidy.
Q. How will insurance companies vary rates among individuals?
A. For individuals and small groups, they can consider only age, smoking status and geographic area. Previous underwriting standards had more variations, including gender and pre-existing health conditions. The law allows the highest rates based on age up to three times the lowest rates; previously, insurers could have top age-related rates up to five times the lowest rates.
Q. Can I buy exchange coverage even if I don't qualify for a subsidy?
A. Yes. In addition, you don't have to buy coverage from the exchange. You can use your subsidy to buy a qualified plan outside the exchange, if you prefer.
Q. How much will the exchange insurance cost?
A. We may know soon in Nebraska and within a month or so in Iowa. Some policies in Oregon, where rates already are known, cost less than expected, starting at $116 a month; some in Ohio were more expensive than expected.
Q. Does this change my health savings account, health reimbursement account or flexible spending account?
A. No, they continue as they are.
Q. What are these bronze, silver, gold and platinum health plans I'm hearing about?
A. The “metallic” health plans vary by how much the insurer (or the employer in a self-insured plan) pays on claims versus the customer. From bronze to platinum, the insurer's share is 60, 70, 80 or 90 percent, respectively. Insurers must offer silver and gold (70 and 80 percent) plans on the exchanges. Having consistent payment levels lets consumers compare plans with similar coverages.
Q. Why will all policies, even those for single men, include maternity benefits?
A. Policies can't discriminate based on gender, and maternity is one of the essential health benefits for employer groups up to 49 employees. (Policies also cover prostate exams.) The idea is to spread all health risks among all policyholders.
Q. I'm young and don't smoke. Will that save me money?
A. Yes. Many policies cost 50 percent more for smokers, whether inside the exchanges or outside. Being young helps, too, but less under Obamacare. In general, younger, healthier people will pay more and older, sicker people will pay less than they would have with previous underwriting standards.
Q. If I don't get health insurance, what's the penalty?
A. In 2014 it's $95 for an individual and up to $285 for a family, or 1 percent of income, whichever is larger. In 2015 it's $325 for an individual and up to $975 for a family, or 2 percent of income. In 2016 and beyond it's $695 for an individual and a $2,085 maximum for a family, or 2.5 percent of income. The penalties are to be assessed on tax returns.
Q. How will the government know whether I have insurance?
A. Tax returns probably will have a box for you to list your insurer, which could be cross-checked with the employer's tax filing or your insurer's information. If you lie or don't buy insurance, you may get a letter asking you to pay a penalty. The IRS can't garnish your wages to collect, but it can reduce your refund. Employers already list insurance benefits on your W-2 income tax form.
Q. Does this apply to federal employees and veterans with health benefits?
A. Veterans' Tri-Care coverage meets the law's requirements, and federal employees also will have to comply.
Q. Are some people exempt from the law?
A. Yes. Those who are not required to file tax returns are exempt. The law also will allow hardship exemptions, on a case-by-case basis.
Q. What was the one-year delay the president approved this summer?
A. The mandate that employers with 50 or more workers must provide affordable insurance or pay penalties will take effect in 2015.