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Obamacare: Beyond the Hype

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Get familiar with a few facts about the law

Affordable Care Act. Let’s agree that the national media makes news with sound bites. But sound bites are often out of context and therefore incomplete. Let’s also agree the national media takes sides, and therefore their presentation of the facts may lean in a particular direction. My hope, as an Affordable Care Act and CMS certified and accredited broker, is to present an unbiased view of the facts, as they relate to Idaho.

As Mitt Romney expressed in USA Today, it is desirable for states to design their own health care plans, rather than default to a federal plan. Idaho is among the 19 states that established a State Exchange. Idaho’s supporting state representative and senators took a lot of heat for their decision to pass legislation to create a State Exchange. 

 Yet in the State Exchange, we have the same key insurers (BridgeSpan is a sister company of Regence) who have always been in the state, who know our demographic characteristics and medical services, and who are offering an abundance of plan designs: 61 individual plans and another 55 small group plans, to be exact, statewide. Here are the website links for information about plans available in North Idaho:

Blue Cross of Idaho: http://shoppers.bcidaho.com

BridgeSpan Health Company: www.bridgespanhealth.com/web/bridgespan_individual_id/plans/

PacificSource Health Plans: http://pacificsource.com/find-an-individual-plan/

Delta Dental of Idaho: http://go.deltadentalid.com/healthexchange/plans.aspx

Thirty-one states chose to default to a federal partnership to run their exchanges. The average number of plans is 53. Of such partnerships, Alabama will have the fewest plans at 7; West Virginia and New Hampshire are next with only 12 plan choices. When you hear negative reports on the news, it is usually referencing a federal plan state.

Another hot potato is the incessant rumor that the Affordable Care Act directly funds abortion. Abortion coverage was a sticking point during the fight to pass the Affordable Care Act, and continues to stoke controversy three years later. By law, each state has the option of providing insurance plans that offer abortion coverage in their marketplaces, and must also offer at least one plan that doesn’t cover abortion services. No one is forced to choose a plan that includes abortion coverage. 

Because Idaho has its own Exchange, elective abortion coverage is not included in any of the individual or small group products, inside or outside the Exchange, for Pacific Source, Bridgespan or Regence. Blue Cross states coverage is provided, “if it is a recommendation of one consulting physician that an abortion is necessary to save the life of the mother, or if the pregnancy is a result of rape as defined by Idaho law, or incest as determined by the court.” The Morning After Pill, RU486, is not a covered drug under the Women’s Preventive Health Care expansion which took effect in August 2012, nor will it be in January 2014. 

 The federal government will not fund abortion under the health law. Obamacare stipulates that the insurers offering abortion coverage on the marketplaces must separate out federal money so it doesn’t go toward that type of reproductive care. 

Adding fuel to the fire of controversy are grant dollars awarded to Planned Parenthood affiliates in Iowa, Montana, New Hampshire, and Washington, DC. Rumors abound that the funds might go toward abortion services. The grant dollars are accountable and intended to fund In-Person Assisters or Navigators. These assisters and navigators are to help people enroll in new, more affordable insurance plans. The intent of the grant award is to target and enroll a segment of the population that especially needs to secure coverage for preventive care, maternity care, and emergency care.

Another persistent rumor is that young people will pay more and that it is unfair, especially since they are healthy. Premiums between $89 to $223 per month for young adults up to age 30 seem fair to me. Mind you, this is before the premium tax credit, for which they often qualify. Such tax credits can reduce the annual cost to $300 or less! 

True, young adults may be statistically healthier, but insurance is about injuries and accidents as well. My observation is that young adults tend to engage in fairly risky behaviors, whether texting and driving, riding bikes without helmets, speeding, or extreme sports. Wait a minute, that sounds like a lot of adults, too! Can we agree just because someone is healthy it doesn’t mean they are immune to accidents and serious injuries? I venture to say a younger person would be inclined to choose more medical care if faced with serious injury because they have so much life left to live. They want to do everything possible to restore their wellbeing and lifestyle. 

Those who say they can’t afford insurance should definitely look into the tax credits before they believe it. I believe there is a possibility insurance appears unaffordable, but for many it is only unaffordable based on other financial choices like a season ski pass. (I know this season is totally supposed to be worth it, just saying.)

Community Cancer Services just held their biggest fundraising event of the year. Sadly, they are providing support to over 150 children dealing with the consequences of cancer just in our small community. So let’s not lull ourselves into thinking young people don’t need insurance.

For a week straight we heard about the big lie, that “you can keep your existing plan if you want to.” The media failed to share sound economic business practices and only focused on the out-of-context quote. If you purchased a plan or changed your health plan after the law was passed in March 2010, you clearly cannot keep what was purchased after the law was passed and not expect to comply with law in 2014. That is how the bill was written and passed—there was a phase-in period. 

If you have received notice from your insurance company that your current policy is being discontinued, be aware the law does not force insurance companies to continue to offer products that threaten their financial viability. Insurance is the assurance the company protecting me will be there when I need them. It does not make economic sense to keep a product, even for people who would be otherwise ‘grandfathered’ (which means exempt from the new provisions of the law because they bought coverage before the law was passed) if the risk pool is too small and the rate adequacy, to pay expected claims, deficient. 

It has been common practice in North Idaho for insurance companies to design a new product, grab market share with broad coverage and competitive rates, then over a period of 3 to 5 years have the claims exceed the premium pool. Close to when the pool becomes ‘polluted’ with excessive claims, new products and pricing take their place. Those enrollees who could transfer to the new plan to save premium costs did so. Those who had health issues and needed the broader coverage kept the discontinued plans (renewals were allowed, but new business in those plans were discontinued) but at much higher rates because there was a smaller pool of insureds to accumulate premium to pay the expected claims. Insurance is built on the principal of many paying for the losses of a few. It stands to reason insurance companies cannot retain all their current plans and manage all their new Exchange plans. It’s not lying. And there should be no blaming. No one is the bad guy here. Insurance companies are choosing sound business practices. I’m happy they aren’t being forced to retain all their old plans. Hopefully you are as well. 

CNN reported coverage secured through the Exchange may offer limited doctor and hospital networks. This is true and there is a significant out-of-network consequence by way of increased deductible, co-insurance and out-of-pocket maximums with some insurers. Limiting the network is a pricing tool that helps some insurers keep premiums and other costs down. 

The deductible for one Idaho insurer raises from $500 to $12,000 if out-of-network providers are used for non-emergency care. And the out-of-pocket maximum increases from $6,350 to $24,000! In an area where regional care across state lines is common, the insurer network is a critical factor in choosing health coverage. 

I’ve noticed many Medicare beneficiaries trying to enroll or wanting to enroll in health plans through the Exchange. If you have a Medicare card you are not eligible to enroll for coverage or obtain tax credits or the cost-sharing subsidies available through the Exchange. The 2014 Medicare handbook, sent to beneficiaries last month, tried to drive home the point, saying, “Medicare isn’t part of the marketplace (aka Exchange).” 

Before the Exchange was scheduled to open, USA Today suggested, “Don’t wait. But don’t hurry either.” That may have been good advice then, but it’s not now! I’m not sure how much faith I want to place in online enrollment being a smooth process by November 30, 2013. Insurance companies and consumers are already singing, “All I want for Christmas is a working enrollment website!” Coverage needs to be secured by December 15, 2013 to obtain coverage effective January 1, 2014, so I say, “Don’t Wait! Hurry Up!”

There is more information and hand-holding available through a certified Affordable Care Act and CMS accredited insurance broker than on any website. They will also help you complete and submit a paper application that can be processed long before the website will be functioning properly. Here are the steps you can take now regardless of the condition of the Federal website: 

1. Check out the options on YourHealthIdaho.org; click the links to plan designs.

2. Go to HealthCare.gov (Idaho needs to use the Federal website for enrollment), but only go so far as to create an account for yourself. This process actually works pretty well. Remember to respond to the verification email in a timely manner. This is essential to verifying your identity, which is critical to establishing the amount of your tax credit and cost-sharing subsidy.

3. Meet with a certified agent/broker. Determine if you are eligible for financial help, which can come in the form of subsidies to offset the cost of premiums, co-payments or deductibles. A certified insurance agent can help you with this. (We’re free!) For DIY folks, go to http://kff.org/interactive/subsidy-calculator/ . This site offers fairly accurate estimates. 

If using this calculator, be sure to enter household size (regardless of the number of enrollees) and your household income estimate for 2014. You may want to review your 2012 tax return and add line 37, 8a and 20a to establish your Modified Adjusted Gross Income. Then add or deduct variables to the 2012 data to reflect income changes expected in 2014.

Anyone under age 65 participating in the new state exchanges can get tax credits if their incomes fall between the poverty level ($11,500 for a single person household/$15,510 for a couple) and 400 percent of the poverty level. Plus, added cost-sharing subsidies apply when the household modified adjusted gross income is under 250 percent of the Federal Poverty Level.

4. Meet with a certified agent/broker. (We’re free!) Complete a paper application for the Exchange. For some, we will already know you aren’t going to qualify for a premium tax credit and we can submit your application direct to your insurer of choice. Your price and coverage are guaranteed because there are no surcharges and no one can be declined or offered limited coverage.

5. Calculate what you’ve been spending for your uninsured health care, including prescription drugs, doctor visits and any emergency room or other hospital visits. Are there health concerns you’ve avoided addressing that are likely to get worse, like that sore knee or breathing condition? Medicines you should be taking but aren’t? Are you the daredevil athlete or is it your child or children? Are you planning to have a baby?

6. Even policies that appear affordable may not be if you have high deductibles, co-payments or cost-sharing for procedures. Meet with a certified agent/broker to review the plan that’s right for you. (We’re free!) Choose a plan based on how much you can afford to pay in premiums, co-payments and cost-sharing for procedures, as well as what your medical needs are likely to be next year. 

Don’t make the mistake of forfeiting a coverage upgrade, by virtue of the Cost-sharing Subsidy, by choosing anything other than a Silver plan. If you don’t have that added subsidy, recognize you are sharing in 40 percent of the cost of care if you purchase a Bronze plan. Could you afford to pay 40 percent of last year’s medical bills, and almost everything out-of-pocket until a high deductible is met? What about 40 percent of the average $9,940 ‘normal’ pregnancy cost?

7. The exchange plans are set up so you will never have to pay more than 9.5 percent of your salary for insurance. But the new law certainly doesn’t mean coverage will be cheap. The good news is that 9 out of 10 people I meet with reap tremendous savings in cost, plus their quality of coverage is improved. 

8. Sadly, some people will find it doesn’t make sense financially to buy insurance. The Affordable Care Act will create an unintended gap in health insurance for residents of Idaho and other states that did not expand Medicaid. People who fall into this gap make too much money to qualify for Medicaid but too little to qualify for subsidies on insurance bought through the Exchange. 

9. For some people, paying the 2014 penalty, which is $95 per person or 1 percent of household income, whichever is higher, may be the cheaper move. (Unless, of course, your health takes a turn for the worse.) By 2016, the annual penalty will be $695 or 2.5 percent of income, whichever is greater. But if the cost of insurance exceeds 8 percent of your household income, or other recent financial events have occurred, insurance can be considered unaffordable and the penalty is then waived.

Some Americans will choose to “opt out” of the Affordable Care Act. For some, their opposition stems from the religious beliefs. Some may not qualify for exemptions under the law because the rules are so narrow; the religious exemption is pretty much limited to the Amish, Mennonites, and other sects that disavow all forms of insurance, including Social Security. 

Think twice about whether it will be a sound decision for you to go without insurance when there will be excessive demand on the limited number of doctors in our area, who will have patients waiting to be seen, with insurance that provides them with a contractual guarantee of payment in 30 days. 

Agents/brokers are expected to play a major role in enrolling individuals, small employers, and employees into coverage through Your Health Idaho. (We’re free!) In Person Assisters and call center staff are strongly encouraged to refer consumers to agents/brokers to select a plan and complete the enrollment process. Agents/brokers must complete the federal training course in order to participate on the Your Health Idaho Marketplace.

Idaho’s In-Person Assisters provide education and enrollment assistance to consumers for the Exchange. IPAs will focus on providing education and eligibility assistance. IPAs will complete a 20 hour training course and must pass a test and a background check in order to become certified. IPAs and agents/brokers together are known as Consumer Connectors.

Beware! Website woes are creating an opportunity for scams. Reports abound of people who would seek to line their pockets by misleading consumers. Across the country insurance regulators have confronted would-be fraudsters who have designed websites to mimic ObamaCare’s enrollment portal: HealthCare.gov. These attempts to imitate the site have met with cease-and-desist letters because the sites could easily confuse consumers intending to enroll in the Exchange. The Hill notes that regulators from Washington, Pennsylvania and Connecticut are warning opportunists against creating sites that might mislead the public. Remember, you are providing a tremendous amount of personal financial data in the application process. You should not be doing this from home or at your favorite coffee shop where you don’t have a firewall to protect this information from being grabbed out of cyberspace. See a certified agent/broker who you can trust to walk you through the enrollment process. Right now, the old fashioned paper and mail process will work the best. 

 Angela Oakes, is a certified PPACA and CMS accredited insurance agent/broker. She has been in insurance since 1980 and owns Affordable Insurance Solutions and Summit Insurance Resource Group and works with a talented team of professionals. She is keen on providing a reliable source of critical and timely insurance information and solutions to our community. This information represents her understanding of current federal and state requirements, which are subject to change at any time and may be subject to differing interpretations.

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Author info

Angela Oakes Angela Oakes Angela Potts-Bopp is the owner of Summit Insurance Resource Group in Sandpoint, Idaho. A former professional ice skater, her passions are providing insurance for the uninsured, creating bike paths throughout town, and running marathons.

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insurance, Obamacare, Affordable Health Care Act

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