With a $2,000 deductible Is the Affordable Care Act 'affordable'?
Original article from https://money.cnn.com
By Tami Luhby
Until now, much of the debate swirling around the Affordable Care Act has focused on the cost of premiums in the state-based health insurance exchanges. But what will enrollees actually get for that monthly charge?
States are starting to roll out details about the exchanges, providing a look at just how affordable coverage under the Affordable Care Act will be. Some potential participants may be surprised at the figures: $2,000 deductibles, $45 primary care visit co-pays, and $250 emergency room tabs.
Those are just some of the charges enrollees will incur in a silver-level plan in California, which recently unveiled an overview of the benefits and charges associated with its exchange. That's on top of the $321 average monthly premium.
For some, this will be great news since it will allow them to see the doctor without breaking the bank. But others may not want to shell out a few thousand bucks in addition to a monthly premium.
"The hardest question is will it be a good deal and will consumers be able to afford it," said Marian Mulkey, director of the health reform initiative at the California Healthcare Foundation. "The jury is still out. It depends on their circumstances."
A quick refresher on Obamacare: People who don't have affordable health insurance through their employers will be able to sign up for coverage through state-based exchanges. Enrollment is set to begin in October, with coverage taking effect in January. You must have some form of coverage next year, or you will face annual penalties of $95 or 1% of family income (whichever is greater) initially and more in subsequent years.
Each state will offer four levels of coverage: platinum, gold, silver and bronze. Platinum plans come with the highest premiums, but lowest out-of-pocket expenses, while bronze plans carry lower monthly charges but require more cost-sharing. Gold and silver fall in the middle.
The federal government will offer premium subsidies to those with incomes of up to four times the federal poverty level. This year, that's $45,960 for an individual or $94,200 for a family of four. There will be additional help to cover out-of-pocket expenses for those earning less than 250% of the poverty line: $28,725 for a single person and $58,875 for a family of four. The subsidies are tied to the cost of the state's silver level plans.
Related: I'm signing up for Obamacare
California offers insight into how much participants will actually have to pay under Obamacare. The state, unlike most others, is requiring insurers to offer a standard set of benefits and charges in each plan level. The only variables are monthly premiums, doctor networks and carriers in your area.
For those in need of frequent medical care, the platinum or gold plans would reduce out-of-pocket costs for treatment. These plans have no deductible, and doctors' visits and medication are cheaper. But the trade-off is that they have higher monthly premiums. California has not yet released the premium range for these tiers.
On the flip side, a young man who never visits the doctor and wants to minimize his monthly charge could opt for a bronze plan. A 40-year-old enrolling in this plan could pay as little as $219 a month. But, if he did get sick, he'd get socked with a $5,000 deductible, $60 co-pays for primary care visits and a $300 emergency room charge.
The Patient Protection and Affordable Care Act provides protection for those who need a lot of care by placing a cap on out-of-pocket expenses. The maximum a person in an individual platinum plan will spend a year is $4,000, while those in the other tiers will shell out no more than $6,400.
"Insurance is expensive. It's hard for anyone who isn't well off to afford it," said Gary Claxton, director of the health care marketplace project at the Kaiser Family Foundation. "But it is good enough that you can afford to get sick without bankrupting yourself."
Whether potential enrollees find these plans affordable will depend on how healthy they are and whether they are currently insured.
Many individual insurance offerings currently available come with much higher deductibles, cover fewer expenses and limits on how much they'll pay out in a year. Plans on the exchange, on the other hand, are required to cover a variety of "essential benefits," including maternity care, mental health services and medication.
"In many cases, depending on the plan, the coverage will be more comprehensive than what the enrollee currently has," said Anne Gonzalez, a spokeswoman with Covered California, which is running the state's exchange.
What’s Ahead this Year as Health Insurance Exchanges are Rolled-out Nationwide
Original article https://www.theihcc.com
By Cindy Gillespie
Exchanges are a key component of the Affordable Care Act (ACA). Here’s a snapshot of exchange developments across the country, potential regulations to watch for, and where exchanges might be by October 2013 for open enrollment and by January 1, 2014, when they are slated to “go live” nationwide.
Health Insurances Exchanges: The Vision
The ACA directed each state to establish two types of exchanges or have the federal government do so on its behalf — the American Health Benefits Exchange (AHBE) for individuals and the Small Business Health Options Program (SHOP) for small employers. Under the statute, individuals are eligible to buy insurance on the AHBE if they are:
- a U.S. citizen or legal alien
- not incarcerated
- a resident of the state in which the exchange is based
AMERICAN HEALTH BENEFITS EXCHANGE
The ACA includes robust premium and cost-sharing subsidies for individuals who purchase insurance through the individual exchange who are living at levels between 100 and 400 percent of the federal poverty level — between approximately $12,000 and $46,000 a year — and who are not eligible for other public insurance programs (i.e. Medicaid, Medicare, Tricare) and who do not receive “affordable” insurance coverage through their employers (that meets minimum value standards).
Employers which have more than 50 employees whom are eligible for tax credit subsidies, either because the employer does not offer coverage or because the coverage offered is unaffordable to the employee according to ACA standards, or not of minimum value, will be subject to a penalty.
SMALL BUSINESS HEALTH OPTIONS PROGRAM
Meanwhile, the ACA allows employers with up to 100 full-time employees to purchase insurance through SHOP, although the state has the option to limit access to employers with 50 employees or less for the first two years. Most states have taken advantage of this option in order to maintain consistency with the outside market’s definition of “small employer.” States also maintain the option to allow employers with more than 100 employees to purchase insurance through the SHOP beginning in 2017, with approval of the U.S. Department of Health and Human Services (HHS).
Tax credit subsidies are also available to employers who purchase coverage on SHOP for employers with less than 25 employees who have an average taxable wage under $50,000 per year. Employers cannot claim the tax credit for more than two consecutive years.
Health Insurances Exchanges: 3 Primary Models
Although the ACA envisioned 50 different exchanges championed by individual states, the reality of ACA implementation has been far different. Indeed, political, logistical, and operational challenges faced by both HHS and the states have led only a subset of states to embrace exchanges. The update below provides a snapshot of how exchanges are developing across the country.
1. STATE-BASED EXCHANGES
Seventeen states and the District of Columbia are developing State-based Exchanges as envisioned under the ACA. These states have received “conditional approval” from HHS to operate them for the 2014 plan year. Under these exchanges, states execute all functions but may turn to the federal government for issues such as tax-credit eligibility determination, risk adjustment, and reinsurance.
While several of these states have been making great strides toward October 1, 2013 open enrollment, others are relatively behind in the planning process and may struggle to meet the impending deadlines. For example, some states still lack legal authority to operate a State-based Exchange, while others have yet to procure any IT-related services necessary to make the exchange function.
2. STATE PARTNERSHIP EXCHANGES
Seven states have received conditional approval from HHS to operate State Partnership Exchanges. This exchange model, not envisioned under the ACA, is an option created by HHS for states that may want to play a small role in exchange operations either permanently or as they move toward a State-based Exchange. States have two primary options for pursuing State Partnership Exchanges: a plan management partnership or a consumer partnership. States also have the choice to participate in both partnership models.
States participating in a plan management partnership assume responsibility for issuer account management and issuer oversight as well as monitoring, quality reporting, and data collection. In addition, these states also play a key role in determining qualified health plan (QHP) certification. Plan management partnerships will recommend which plans should be certified as QHPs to HHS, which has the legal authority to make QHP certifications.
States also have the option to pursue a consumer partnership exchange. States choosing this approach control the day-to-day management of Navigators and in-person consumer assistors, and will have the option to engage in outreach, education, and branding activities. Navigators and in-person consumer assistors will be the “boots on the ground” in states to help educate consumers about plan choices and coverage options. For states choosing a Federally-facilitated Exchange (FFE), consumer partnership states oversee and provide technical assistance to Navigators, but HHS retains authority over the Navigator programs.
3. FEDERALLY-FACILITATED EXCHANGES
Twenty-six states have decided not to pursue a State-based or Partnership Exchange. In these states, the federal government is establishing a Federally-facilitated Exchange (FFE). Under an FFE, the federal government performs all exchange functions with states, maintaining the option to make final Medicaid determination and operate its reinsurance program. Although the option to operate reinsurance programs has yet to gain traction, many FFE states have expressed interest in maintaining the responsibility to make final Medicaid determination for individuals assessed as eligible for Medicaid.
Marketplace Plan Management
Several federal requirements necessary for health insurance plans to be qualified in order to be offered on the exchange are already criteria commonly examined as part of routine, state insurance regulatory activities. HHS has indicated that its preference is to integrate states’ existing regulatory activities into its decision-making for qualified health plan (QHP) certification, even in states with an operating FFE.
To further facilitate this relationship, HHS has indicated it will offer states a marketplace plan management option, essentially allowing states to perform activities associated with a plan management partnership but without requiring them to submit a formal exchange blueprint. HHS guidance dated February 20, 2013 also indicates that states can apply for federal funds to support these activities, similarly as it did for the State-based and State Partnership models.
3 Issues to Watch in 2013
As the clock ticks on the path to open enrollment, there are several issues still under consideration that are worth tracking, particularly for the small and large employer communities.
Recent guidance from HHS indicates that employee choice and premium aggregation will not be required of SHOP exchanges in the 2014 plan year. In the same set of proposed rules, HHS also indicates that federally-facilitated SHOPs (FF-SHOPs) will not offer these services in their first year of operation.
As you may recall, employee choice and premium aggregation (the process of collecting premiums from qualified employers and delivering a single streamlined payment to insurers) are two tools at the disposal of SHOP exchanges to help drive enrollment. This recently proposed approach could potentially undermine the viability of SHOP exchanges and the small business market nationwide.
Additional rules from HHS surrounding 10 essential health benefits indicate that to meet these requirements outside the exchange, health insurance plans will need to either embed pediatric oral services, the tenth category of essential health benefits coverage, or be “reasonably assured” that the individual has obtained dental coverage from an exchange- certified, stand-alone dental plan. This is a new proposal from HHS and is therefore receiving significant scrutiny from several stakeholder groups, as the requirements could cause operational challenges in the market. Stay tuned.
HHS released additional details regarding employers’ interface with the exchange in January. Most interestingly, the rules verify that there is no central databank containing details on employer-sponsored health insurance plans. As a result, until that information is available, exchange applicants must attest to the details surrounding their employer-sponsored health insurance plans when seeking health insurance on the exchange. The exchange will then use available data sources to attempt to verify individuals’ claims. Absent inconsistencies in available information, the exchange will be permitted to proceed to enroll the applicant in a health insurance plan along with the applicable subsidies. Employers will be notified of employees who claim a tax credit on the exchange. However, exchanges must select a valid sample of people for whom employer coverage details could not be verified and verbally call employers for additional information. If the exchange cannot obtain information within 90 days, eligibility will remain unchanged.
Looking Toward 2014
The issues described above are only a select set of developments that have emerged in recent months. Indeed, there are a host of unanswered questions and operational challenges that stand between today and open enrollment. ACA implementation process has passed the window for planned delay. Employers and the health benefits industry should expect for exchanges to “go live” and for tax credits to be available beginning January 1, 2014. The Stakeholders should prepare for implementation, albeit with hiccups along the way, as scheduled.
Understanding Exchanges Still a Struggle for Consumers
Source: https://www.benefitspro.com
By Kathryn Mayer
Yet another poll is out underscoring one of the main concerns over health reform — that consumers just don’t get it.
According to this survey, released Thursday by InsuranceQuotes.com, 90 percent of Americans don’t know when the new health insurance exchanges will open.
A major component of the Patient Protection and Affordable Care Act, the new health insurance exchanges will be available for online and telephone enrollments beginning Oct. 1. Coverage begins on Jan. 1, 2014. Exchanges are intended to give families and small-business owners accurate information to make apples-to-apples comparisons of private insurance plans and get financial help to make coverage more affordable if they’re eligible.
The exchanges are a core component of the individual mandate that will require all Americans to obtain health insurance or pay a fine. As a result, tens of millions of previously uninsured Americans are expected to gain access to health insurance.
The survey of roughly 1,000 U.S. adults found that 40 percent expect health reform to have a major effect on their lives, while 39 percent think the law will have a minor effect and 19 percent expect no effect.
The survey found that Americans were more knowledgeable about other aspects of health reform. For instance, 73 percent correctly answered that health plans cannot deny coverage based on preexisting health conditions. And 66 percent accurately said that health plans must extend coverage to dependent children up to age 26. Those two provisions have been among the most popular.
Still, insurance experts say having only some knowledge isn’t enough.
“A lot of people need to study up on health care reform and what it means to them,” said Laura Adams, senior insurance analyst at InsuranceQuotes.com. “We found a very inconsistent understanding of the Affordable Care Act, and we fear that many people will miss key deadlines and benefits because they don’t adequately understand the new law.”
Uninformed consumers who are unaware of what the exchanges do and what health reform means for them has been a huge hurdle of PPACA. It’s something that government officials are working to alleviate. In January, The Department of Health and Human Services relaunched healthcare.gov, a website aimed at informing consumers about the health reform law while giving them a place to purchase insurance.
In total, 39 percent of Americans said they are somewhat knowledgeable about PPACA, 28 percent said they aren’t too knowledgeable, 21 percent said they aren’t at all knowledgeable and only 10 percent said they are very knowledgeable.
The survey was conducted March 7-10 by telephone by Princeton Survey Research Associates International.
Exchange Notice Requirements Delayed
The Affordable Care Act (ACA) requires employers to provide all new hires and current employees with a written notice about ACA’s health insurance exchanges (Exchanges), effective March 1, 2013.
On Jan. 24, 2013, the Department of Labor (DOL) announced that employers will not be held to the March 1, 2013, deadline. They will not have to comply until final regulations are issued and a final effective date is specified.
This Power Group Companies Legislative Brief details the expected timeline for the exchange notice requirements.
Exchange Notice Requirements
In general, the notice must:
- Inform employees about the existence of the Exchange and give a description of the services provided by the Exchange;
- Explain how employees may be eligible for a premium tax credit or a cost-sharing reduction if the employer's plan does not meet certain requirements;
- Inform employees that if they purchase coverage through the Exchange, they may lose any employer contribution toward the cost of employer-provided coverage, and that all or a portion of this employer contribution may be excludable for federal income tax purposes; and
- Include contact information for the Exchange and an explanation of appeal rights.
This requirement is found in Section 18B of the Fair Labor Standards Act (FLSA), which was created by the ACA. The DOL has not yet issued a model notice or regulations about the employer notice requirement.
When do Employers have to Comply with the Exchange Notice Requirements?
Section 18B provides that employer compliance with the notice requirements must be carried out "[i]n accordance with regulations promulgated by the Secretary [of Labor]." Accordingly, the DOL has announced that, until regulations are issued and become applicable, employers are not required to comply with the exchange notice requirements.
The DOL has concluded that the notice requirement will not take effect on March 1, 2013, for several reasons. First, this notice should be coordinated with HHS's educational efforts and IRS guidance on minimum value. Second, the DOL is committed to a smooth implementation process, including:
- Providing employers with sufficient time to comply; and
- Selecting an applicability date that ensures that employees receive the information at a meaningful time.
The DOL expects that the timing for distribution of notices will be the late summer or fall of 2013, which will coordinate with the open enrollment period for Exchanges.
The DOL is considering providing model, generic language that could be used to satisfy the notice requirement. As a compliance alternative, the DOL is also considering allowing employers to satisfy the notice requirement by providing employees with information using the employer coverage template as discussed in the preamble to the Proposed Rule on Medicaid, Children's Health Insurance Programs and Exchanges.
Future guidance on complying with the notice requirement under FLSA section 18B is expected to provide flexibility and adequate time to comply.