How affordable are Affordable Care Act premiums?

September 23, 2013 7:32 PM

How affordable are Affordable Care Act premiums?

By Wyatt Andrews

(CBS News) BALTIMORE -- One week from Tuesday, a major portion of the president's health care reform law will go into effect and change the way millions of Americans get their health care. On Oct. 1, they can start signing up to buy insurance on the new state exchanges.

Obamacare is officially the Affordable Care Act, but how affordable are the premiums?

Dean Dodson, an uninsured computer repairman in Baltimore, was excited to learn the cost of his health insurance under Obamacare.

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Dean Dodson, an uninsured computer repairman in Baltimore, was elated when he learned the cost of his health insurance under Obamacare.
/ CBS News

"Oh man, I'm elated, it's like they took something off my shoulders, you know?" he says.

Dodson estimates he will pay around $285 a month, and at that price, he says, he can't wait to sign up.

"I can afford that -- I mean, that's wonderful, man," he says, with relief in his voice. "I mean, I'm 59 years old. Sooner or later, something is going to happen to me."

In Maryland, Dodson will get to choose from among six different insurance companies -- typical for most states nationwide. Most companies also offer multiple policies, ranked in price from bronze, being the cheapest, up through silver, gold and platinum, the most expensive.

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Bronze-level plans have high out-of-pocket deductible costs but very low premiums. At the bronze level, Dodson could pay as low as $94 a month, but his deductible would be $6,000.

He thinks the silver level is better. That deductible goes down to $1,300, and while he pays $285 a month, it's still much lower than he expected.

Watch: Health clinic workers go door-to-door to sign up uninsured, below.

"I thought it was going to be a little more expensive than what we're talking about now," he says. "I really did."

But the biggest reason for Dodson's low premium is the system of federal subsidies. Dodson's modest income of $36,000 dollars a year qualifies him for a $179 federal tax credit -- a tax credit that brings down his policy from its true cost at $464 to what he pays -- $285.

The other good news for Maryland residents is that most insurance companies there will offer access to the state's best doctors and hospitals, including Johns Hopkins. That won't be true in some states where the cheapest plans will offer much smaller networks of providers.

Seventeen states have publicly reported the policies and prices being offered on the exchanges. The nonpartisan Kaiser Family Foundation looked at all those rates and concluded almost all of the premiums will be lower than what was projected by the Congressional Budget Office.

http://www.cbsnews.com/8301-18563_162-57604291/how-affordable-are-affordable-care-act-premiums/

Obamacare: 10 things you need to know about Affordable Care Act starting Oct. 1

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Starting Oct. 1, uninsured Americans can begin signing up for health plans though the exchange system set up under the Affordable Care Act. (AP File Photo)

By Melissa Anders | manders@mlive.com MLive.com

on September 22, 2013 at 7:16 AM, updated September 22, 2013 at 10:17 AM

Affordable care act

• Obamacare: 10 things you need to know about Affordable Care Act starting Oct. 1
• Stabenow, Levin optimistic Michigan can move past political drama to make Obamacare work
• Michigan House gives final approval to Medicaid expansion, sending bill to Gov. Rick Snyder
• Michigan Republicans for Medicaid expansion want you to know they still really, really hate Obamacare
• Navigating the Affordable Care Act

LANSING — One of the biggest pieces of healthcare reform — the Health Insurance Marketplace — goes live in just nine days.

We've known this was coming since President Barack Obama signed the Patient Protection and Affordable Care Act, also known as Obamacare, into law in March 2010.

But with plenty of uncertainty over the law — including numerous attempts to repeal it — and people's natural tendency to procrastinate, many consumers may still be unaware or confused about the new marketplace and the Affordable Care Act in general.

Gov. Rick Snyder touched on that feeling last week after signing his Healthy Michigan plan to expand Medicaid, another one of the key parts of health reform.

"This is one of the most confusing situations known to man," Snyder said last week. "And I'm not just speaking about Healthy Michigan, but the whole issue of exchanges and everything else. There's a tremendous amount of misinformation and misunderstanding that needs to be clarified in the next few months, and that's going to be a lot of hard work."

The federal government, insurance companies and nonprofit organizations are all working to inform individuals and employers about changes to the nation's health care system.

Many of the changes take effect on Jan. 1, 2014, including a ban on denying coverage based on pre-existing conditions, no more annual limits on coverage, and Medicaid expansion in certain states. (Michigan's expanded Medicaid program won't be implemented until late March or early April.)

For now, we'll try to answer questions about the marketplace that launches Oct. 1, as well as subsidies and the individual mandate that take effect next year.

These changes mostly impact the uninsured and those who have individual coverage, which collectively account for 16 percent of Michigan. The rest have coverage through an employer or government program, like Medicaid or Medicare. Those people will still see changes, and may still want to look into the marketplace.

INSURERS ON THE EXCHANGE

These 14 insurance companies submitted plans for Michigan's federally run health insurance exchange
• Alliance Health and Life Insurance Company
• Blue Care Network of Michigan
• Blue Cross Blue Shield of Michigan
• Consumers Mutual Insurance of Michigan (CO-OP)
• Health Alliance Plan
• Humana Medical Plan of Michigan Inc.
• McLaren Health Plan
• Meridian Health Plan of Michigan Inc.
• Molina Healthcare of Michigan
• Priority Health
• Priority Health Insurance Company
• Total Health Care USA
• United Healthcare Life Insurance Company*
*Small group coverage only
Source: Michigan Department of Insurance and Financial Services

What's the marketplace?
The marketplace, also known as the exchange, will act as an online clearinghouse where residents and small businesses can compare plans and buy insurance. Some have compared it to a Travelocity-like site, while Kaiser Family Foundation called it a "virtual insurance mega mall."

It will be available online at healthcare.gov starting Oct. 1 and will offer coverage starting as soon as January 1, 2014. Open enrollment ends March 31, 2014.
Michigan is among 27 states that are using a federally run health insurance exchange, as of Sept. 16.

In Michigan, 14 insurance companies submitted plans for the exchange. However last week, Physicians Health Plan dropped out of the marketplace. All but one of the remaining insurers plan to offer individual coverage, and several will sell small group plans as well.

I have insurance through my employer. What do I need to know?
You'll still see changes even if you decide to stick with your employer's insurance plan and don't purchase coverage on the exchange. That's because all plans must include the essential health benefits and meet other requirements laid out in the law starting in 2014. There also will be new taxes and fees tacked onto your bill to pay for aspects of health reform, such as insurance support for lower-income individuals and families.

Also, your employer may change your plan or drop your coverage based on the changes, so you might still want to shop on the exchange.

I have individual insurance. Now what?
You can continue with your same insurer, but your current plan will most likely change next year to comply with the Affordable Care Act. Also, if you want to get a federal subsidy to help pay for your coverage, you'll have to purchase insurance through the marketplace.
"We're not hearing much about healthcare reform from our individual policy holders, but they'll be hearing from us," said Andy Hetzel, spokesman for Blue Cross Blue Shield of Michigan.

STILL HAVE QUESTIONS?

Here's where to go for help:
• MLive will host an online live chat with health insurance experts at 12 p.m. on Tuesday, Oct. 1. Check MLive.com for details.
• The federal government has a hotline and website available 24 hours a day, seven days a week. Call 800-318-2596 or live chat at healthcare.gov/chat. Spanish speakers can visit CuidadoDeSalud.gov, and translators for more than 150 other languages are available at 800-318-2596.
• The state of Michigan's Health Insurance Consumer Assistance Program (HICAP) has easy-to-navigate website with information on health insurance, the Affordable Care Act and the marketplace. You can also call 877-999-6442 between 8 a.m. and 5 p.m. on weekdays or email DIFS-HICAP@Michigan.gov.
• The nonprofit, non-partisan Kaiser Family Foundation has a health reform website with a wealth of information, including helpful tools like a subsidy calculator and animated video that explains the key parts of the law.
• Several insurers have set up interactive websites with general information on healthcare reform, including Blue Cross Blue Shield of Michigan, Priority Health and Consumers Mutual Insurance of Michigan.
• Nonprofit Michigan Consumers for Healthcare also has an informational website. They recommend you don't take advice from insurance companies, contenting they steer conversations in ways that benefit them.
Starting Oct. 1, EnrollMichigan.com will offer information to consumers looking for free assistance in signing up for insurance.

About 8 percent of the state's largest insurer's business is in individual plans. Hetzel said these policy holders should look into their options on the marketplace.

What are my options?
Plans are divided into four categories: bronze, silver, gold and platinum. The platinum plan has the highest premiums, or monthly costs, while the bronze plan has the lowest premiums. But there's a trade-off: With the platinum plan, your out-of-pocket costs or copays are lower, only 10 percent on average. If you have the bronze plan, your monthly costs may be lower, but your out-of-pocket costs are higher, about 40 percent.Blue Cross Blue Shield of Michigan has a helpful online tool that explains how these plans work.
Another option for people under 30 and certain low-income people is a high-deductible catastrophic plan. They typically have lower premiums, but require you to pay up to several thousand dollars out of pocket. These plans aren't eligible for subsidies.

How much will it cost?
The prices for plans on Michigan's health exchange won't become public until Oct. 1. The state insurance regulator did this in order to protect insurers from having to give up proprietary information to competitors not on the exchange, said spokesman Caleb Buhs.

Examples from major cities in other states show the second-lowest cost silver plan would be about $200-$400 per month, before subsidies, for a single 40-year-old making $28,725. The cost would be $193 after subsidies, according to estimates in a Kaiser Family Foundation report.

Am I eligible for a subsidy?

Americans in certain income levels can apply for tax credits or subsidies to help offset the cost of plans purchased on the health care exchange. The tax credits are sent to the insurance company so enrollees don't have to pay that money up front.
"People need to know that they cannot access the tax credits that make purchasing health care more affordable unless they go to the official exchange, which is healthcare.gov," said Don Hazaert, director of Michigan Consumers for Healthcare, a coalition of health care and other advocacy organizations.

An estimated 746,000 Michiganders could be eligible for the health insurance tax credits starting in 2014, according to Families USA, a nonprofit group that advocates for affordable health care.

The tax credits are available to individuals and families with incomes between 100 and 400 percent of the poverty level. That amounts to up to $45,960 for an individual and up to $94,200 for a family of four in 2013.

For example, a family of three with an annual income of $29,000 could get $7,078 toward an annual premium of $8,250, leaving out-of-pocket costs at $1,172, according to Families USA.

Use a subsidy calculator to determine your potential tax credit at the bottom of this article.

What do the plans cover?
Starting in 2014, all individual and small group health plans must offer certain products and services known as "essential health benefits," whether they're sold on the marketplace or not.

The benefits fall within 10 categories, including emergency services, maternity and newborn care, substance use disorder services, chronic disease management, pediatric care and other services.

Plans on the marketplace must have a scope and benefits that are substantially equivalent to those of the benchmark plan, which in Michigan is Priority Health's HMO.

Consumers should do some comparisons and research into the various insurers on the marketplace, said Holly Wilson, regional outreach manager for Consumers Mutual Insurance of Michigan, a new type of nonprofit mutual insurance company created by the Affordable Care Act.

While all plans offer essential health benefits, some may include other features not advertised on the marketplace, such as an online service for finding low-cost prescriptions or the option to receive medical advice and prescriptions over the phone or online, Wilson said.

How do I apply for coverage and subsidies?
To apply, visit healthcare.gov or call 800-318-2596 starting Oct. 1.
Before then, you can start collecting information needed to apply, including your Social Security number, policy numbers for current plans, and information on each job-based plan you or someone in your household is eligible for.
Hazaert said you shouldn't need tax records, since the marketplace website should automatically pull that information from the Internal Revenue Service.

Who can help me apply?
The law provides funding for health insurance navigators, which are people or organizations that are trained to help consumers and businesses shop for and purchase insurance on the marketplace. They are required to provide free, unbiased assistance.

Michigan Consumers for Healthcare and three other organizations received a total of $2.5 million in grants to offer in-person assistance, and 31 community health centers got $3.8 million to help people enroll for various health insurance options under the Affordable Care Act.
Starting Oct. 1, EnrollMichigan.com will offer information to consumers looking for free assistance in signing up for insurance.

What are the fees if I don't buy insurance?
The individual mandate kicks in next year, meaning you could have to pay a government fee if you don't have minimum health coverage.

The fee in 2014 is 1 percent of your annual income or $95 per person, whichever is higher. The fee for uninsured children is $47.50 each, with a maximum of $285 per family.
"It's a relatively minor fine because there's an expectation that a lot of American just simply don't understand how the law works," Hazaert said.
But by 2016 those fees jump to up to $695 per person or 2.5 percent of income, whichever is larger. The fee will be billed through the IRS.
If you have health insurance, you'll get a form from your insurer that verifies your coverage, and you'll need to submit that with your tax return. If you don't have coverage, the IRS will either withhold the fee amount from your tax refund or bill you if you owe money.
You won't have to pay if you're uninsured for fewer than three months of the year, have "very low income" and can't afford insurance or don't have to file a tax return, are a member of an Indian tribe or a recognized religious sect that objects to health insurance.

Email Melissa Anders at manders@mlive.com. Follow her on Google+ and Twitter: @MelissaDAnders. Download the MLive app for iPhone and Android.

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