Affordable Care Act Income Support Levels

We know there is a lot of confusion about the new Affordable Care Act and we are here to help! 

As the enrollment period for the Affordable Care Act (ACA) starts we hope the official exchange website will be able to handle (what is anticipated to be) a huge volume of traffic from folks shopping and those ready to purchase.

The website address is  www.wahealthplanfinder.org but beware of sites with similar names that are not the official site, but rather sites run for commercial purposes.

For the past three months we could only access screenshots of what the website looks like.

Here are some basic facts regarding the new plans.

For those with income is below 400% of the Federal Poverty Level (FPL), you will qualify for some level of support.

If your income is below 138% of the FPL, you will qualify for the new Washington Apple Health Plan, which is the new name for Medicaid for health insurance.

If your income is between 139 and 250% of the FPL, you would qualify for a large amount of premium support as well as reduced cost sharing in the form of deductibles and co-pays. 

Basically, this means a silver plan will act more like a gold level plan.                                                 If you claimed to be in this group and then your income was later deemed to be over the 250% FPL limit, you will have to repay some of the premium tax credits taken, but would not have to repay any of the reduced deductibles and co-pays.                                                                                                An interesting little fact that might be useful to a small group of folks.

If your income is between 251 and 400% of the FPL, you will be eligible for a reduced premium through premium tax credits.

A word of warning. If you take the full credit available and your income on your tax return is more than anticipated, you may have to repay some of the credits you claimed.

We know that the process for applying for coverage within the exchange requires you to provide far more information than purchasing outside the exchange.

Why is this? In order to guestimate the level of premium support you are eligible for, you need to provide personal information in greater detail. In what we call "Uncle Sam has hired Big Brother", the government has contracted with Equifax to help verify your identity. Equifax is one of the big three credit bureaus in the credit reporting business.

They did it because it's widely recognized that some items generally used to verify identity are not as private as one would assume or hope for. For example, how many people or businesses have your date of birth and Social Security numbers? Probably far more than you assume.

If you are on the Exchange website and are asked random questions you think the government shouldn't know answers to, they do, because of their relationship with Equifax.

If your income is over 400% of the FPL and you decide to purchase a plan outside the Exchange, the paperwork to enroll is far easier.  

A few tips that might benefit you as you review your options.

Purchasing within the exchange with dependents under age 19 means you must buy pediatric dental for $26.50 per month, whereas outside the Exchange, pediatric dental is included. While benefits are similar, there is a major difference. Within the Exchange, the dental benefit only has a $65 annual deductible while outside the Exchange, the medical deductible (ranging from $1,000 to $6,250) must be satisfied before any dental services are covered.

This next benefit to be classified as "strange but true". Pediatric vision plans state a child is eligible for one set of glasses each year, including frames. However, it does not limit the price of the frames, so I can envision (pun intended) a whole lot of teenagers wearing really fancy designer frames.          This is an area that might be tweaked prior to the following benefit year.

We hope this is helpful. Have questions. Call us!
For the more complex and complete version of the facts keep reading below.

The health insurance marketplaces (HIMs) mandated by the Affordable Care Act (ACA), aka ObamaCare, are scheduled to go live on 10/01/13. The ACA was signed into law by President Obama on 3/23/10 (i.e., 3 ½ years ago) and is intended to create a competitive market in the health insurance industry. Millions may ultimately purchase health insurance via the HIMs (also referred to as "exchanges"), but a focus of the law is the 41.3 million uninsured Americans (source: Health and Human Services).

JUST DO IT - The ACA required all 50 states to establish a HIM by 10/01/13. 14 states opted to build their own HIM, e.g., California. 26 states ceded the duty to the federal government, e.g., Texas. The remaining 10 states elected to establish their HIM in partnership with the federal government, e.g., Illinois (source: BTN Research).

HOW IT WORKS - Each state's HIM has a section for individuals to enroll, as well as self-employed persons with no employees. The HIMs will also have a section (Small Business Health Options Program or SHOP) for small businesses with 2-50 employees to select coverage and enroll employees (source: ACA).

YOU ARE SET - Full-time employees working for big companies (> 50 employees) that are insured through their employer and seniors on Medicare are not impacted by the HIMs. Big company full-time employees covered by an existing group plan at work that is effective through a date in 2014 will continue to select their health insurance during their employers' open enrollment periods. Medicare beneficiaries will continue to go to www.medicare.gov to sign up for Medicare, but not for their supplemental plan coverage (source: BTN Research).

QUESTIONS? - "Navigators" (aka "Guides") have received at least 20 hours of online training to answer ACA questions. "Guides" are legally barred from making recommendations to individuals. Over concerns about access to private information, 17 states have restricted the actions of "navigators" (source: ACA).

FIRST STEP - Americans may begin shopping for health insurance on their state's HIM on 10/01/13. Your first stop is the website www.healthcare.gov. The website is designed to tell a consumer if they can buy health insurance through the HIM and whether or not subsidies (i.e., tax credits) are available based upon your level of income .

HELP - Subsidies to offset the out-of-pocket cost of insurance purchased through a HIM are available to lower income Americans. The subsidy is a sliding scale tax credit, e.g., if your income (individual) is between $11,490 (federal poverty level) and $45,960, you are eligible for a tax credit. The subsidy represents an amount available to be applied against the actual premium of any plan an individual selects (source: ACA).

REDUCED COST - For a family of 4, the tax credit to offset the family's out-of-pocket cost of health insurance is available for household income between $23,550 and $94,200 (source: ACA).

CHOICES TO PICK FROM - HIMs will offer a variety of competing health insurance plans, e.g., a state may offer as few as 2 carriers in Vermont to as many as 16 carriers in New York (source: Individual state filings).

MENU OF PLANS - Health insurance coverage on HIMs will be labeled as "bronze" plans (least expensive plans with the highest deductible, targeted to cover 60% of expected medical costs), "silver" plans (cover 70%), "gold" plans (80%) and finally "platinum" plans (most expensive plans with the lowest deductible, targeted to cover 90% of health costs). Most enrollees are expected to select either "bronze" or "silver" plans (source: ACA).

NO ONE DENIED - The ACA dictates that insurance companies participating in the HIM cannot deny coverage to an individual because of a diagnosis, e.g., arthritis, obesity, cancer, and they cannot charge higher premiums because of health problems, chronic illnesses or gender. They can however restrict an individual's choice of hospitals or doctors. If you apply by 12/15/13, you should have coverage in place by 1/01/14 (source: ACA).

SMOKE - HIMs may increase premiums based upon the type of plan (e.g., "gold" plan), your age, where you live, and whether or not you use tobacco (smoke or chew). The tobacco penalty could be +50% (source: ACA).

YOUNG AND OLD - The health insurance premium charged to middle-aged and older adults for coverage purchased through a HIM cannot be more than 3 times what a 21-year old would pay (source: ACA).

CHEAP - HHS predicts that more than 50% of all uninsured Americans will be able to get insurance coverage (through a HIM or through expanded Medicaid) at a monthly out-of-pocket cost of $100 or less (source: HHS).

PENALTY - Everyone not covered by Medicare, Medicaid or a private plan must enroll or pay a 2014 penalty of "the greater of" $95 or 1% of income. The 2016 fine is "the greater of" $695 or 2.5% of income (source: ACA).