I think we all have questions about the new healthcare exchanges – I know I do! My friend (and health insurance expert) Pai Gee-Janssens was kind enough to answer the questions she is hearing the most. Thanks Pai!
While the Affordable Care Act, aka ACA or Obamacare, has been the law of the land since March 23, 2010, many consumers have not felt much direct impact — but that’s about to change.
All the talk in the media and press about Healthcare Reform and the October 2013 official rollout to consumers of the Affordable Care Act’s Health Insurance Exchanges can be mind-boggling. But all you want to know is exactly how it will affect you directly, your healthcare expense planning and the anticipated quality of your healthcare.
Based on my experience as a New York State Health Insurance Broker who is NY Health Benefits Exchange (SHOP) Certified for the new Federal healthcare reform plans available in NY State, I have compiled a consolidated list of resources for consumers. I am passionate about access to quality, affordable healthcare for all.
Below are answers to the questions I have been asked repeatedly over the course of this 2013 about Healthcare Reform as related to the new Health Insurance Exchanges…
1. What is Universal Healthcare vs. Single Payer System vs. Socialized Medicine?
Universal Healthcare usually refers to a health care system which provides health care and financial protection to all its citizens. Universal Healthcare is not the same as socialized medicine. In a socialized medicine model, the government would provide all services from your doctors and providers, to the hospitals and other facilities, to all payment for those services.
Single Payer health care is a system in which the government, rather than private insurers, pays for all health care costs. Single-payer systems may contract for healthcare services from private organizations (e.g. Canada) or may own and employ healthcare resources and personnel (e.g. United Kingdom). Medicare is a very popular but limited version of single payer.
The ACA (Affordable Care Act) gives the U.S. a “universal” system of health insurance enrollment. The ACA still utilizes the private sector as the main source of insurers.
2. What are Federal vs. State-based Health Insurance Exchanges?
As part of the Affordable Care Act, every U.S. state must have a health insurance exchange in place by January 2014. An exchange is a clearinghouse of sorts where people and small businesses can go to buy insurance and also find out which tax rebates they may use to help them buy coverage.
States can elect to build a fully State-based Marketplace, enter into a State-Federal Partnership Marketplace, or default into a Federally-facilitated Marketplace.
The Kaiser Family Foundation website summarizes the State Decisions on their chosen marketplace option.
3. Who must purchase the new Health Exchange plans?
To be eligible for health coverage through the Marketplace, you: must live in the U.S., be a U.S. citizen and cannot be incarcerated.
U.S. citizens living in a foreign country are not required to get health insurance coverage under the Affordable Care Act. If you’re uninsured and living abroad, you don’t have to pay the penalty fee.
If you are currently uninsured or currently buy your own individual health insurance (you do not have employer, group, union, Medicaid or Medicare coverage), you may enroll in a Health Exchange plan. If you are uninsured and do not enroll in a plan, you need to pay a fine.
4. What is the penalty for being uninsured?
Individuals who skip the mandated/required Health Exchange Plans coverage are penalized:
- 2014: $95 per adult and $47.50 per child (up to $285 for a family) or 1% of taxable family income, whichever is greater
- 2015: $325 per adult and $162.50 per child (up to $975 for a family) or 2% of taxable income, whichever is greater
- 2016: $695 per adult and $347.50 per child (up to $2,085 for a family) or 2.5% of taxable income, whichever is greater
5. Can small businesses purchase the new Health Exchange plans?
Small businesses and non-profits with 50 or fewer full-time equivalent (FTE) employees may get health coverage in the Small Business Health Options Program (SHOP) Marketplace. However, no employers are required to offer health coverage.
6. When can I sign up?
Coverage starts January 1, 2014 for anyone who enrolls during the October 1, 2013 – December 15, 2013 enrollment period. Open enrollment will last through March 31, 2014. Afterwards, you can enroll only due to certain life events e.g. job loss, birth, marriage, divorce.
Health Exchange plan coverage through the Small Business Health Options Program (SHOP) also has open enrollment that begins October 1, 2013 with effective coverage dates starting January 1, 2014.
Many of the 16 Directors of State-run Health Exchanges are describing October 2013 as a “soft launch” period, when Americans start exploring their coverage options — but websites may be incomplete, vulnerable to glitches and perhaps not ready for an onslaught of customers. You may want to consider to wait a few weeks or a month to make your final Health Exchange plan choice.
7. What if I have Medicare?
If you are age 65 or older, you should look at Medicare plan options instead of the new Health Exchange plans. Medicare benefits won’t be affected by the Affordable Care Act’s Health Exchange marketplace.
8. What if I have Healthy NY or Medicaid?
Beginning January 1, 2014, HealthyNY will no longer provide coverage for individuals or sole proprietors. The program will be limited to small employers only. Those with HealthyNY plans in 2013 should enroll in the NY Health Exchange plans beginning in October 2013 for coverage starting January 1, 2014.
Under the Affordable Care Act, 25 states and D.C. have agreed to expand Medicaid. New York is a Medicaid expansion state. Those who qualify for Medicaid do not need to purchase plans from the new Health Exchanges.
9. Which insurance carriers are offering the plans?
In Manhattan (NY County), these insurers will offer Health Exchange Plans for individuals: Affinity Health Plan, EmblemHealth, Empire Blue Cross Blue Shield, Fidelis Care, Health Republic [Freelancers], Healthfirst, MetroPlus Health Plan, Oscar and UnitedHealthcare.
Besides the familiar insurer names, HealthRepublic is a nonprofit co-op where the majority of board members will be consumers, and Oscar is a tech-savvy company launched by three young HarvardBusinessSchool grads.
In Manhattan, these insurers will offer Health Exchange Plans for Small Businesses with 50 or fewer full-time equivalent (FTE) employees: Health Republic [Freelancers], MetroPlus Health Plan, UnitedHealthcare.
For other NYC boroughs and the rest of NY State, the NY State of Health website lists the insurers offering plans.
10. What will be covered under the new plans?
All four tier options of plans i.e. Bronze, Silver, Gold and Platinum must cover 10 Essential Health Benefits including doctor’s visits and hospital stays, maternity and newborn care, mental health substance abuse services, emergency care, prescription drugs, lab services, rehabilitation services and preventative wellness services. Some plans will offer dental and vision coverage, too. Coverage of the tiers ranges from the Bronze tier plan option that covers 60% of your medical costs to the Platinum tier that covers 90%.
Some companies are offering catastrophic coverage, which will be the cheapest plans because they will have high deductibles.
11. What about pre-existing conditions?
Starting in 2014, health insurance companies, on and off the Health Exchanges, cannot discriminate against individuals with pre-existing conditions by charging more or denying coverage.
12. What kind of rates can I expect?
The NY Health Exchange plans are “53% cheaper on average than what you can get on market today. 75% of people will be eligible for some sort of financial aid on top of these that prices that are already roughly 50% the rates private insurance companies have been offering in 2013.” – says Elisabeth Benjamin, VP of Health Initiatives of the Community Service Society of NY.
Approved rates for the 4 plan tiers range from the Bronze level by newcomer Health Republic Insurance of New York at $311.77/month for an individual, to the platinum plan offered by UnitedHealthcare at $913.99/month.
13. Federal tax credits for purchasing plans
Anyone whose household income is less than $45,960 for an individual and $94,200 for a family of four would be able to get federal tax credits to offset the full monthly price of plan premiums. Someone with an annual income of $17,000, for example, will only have to pay $55 a month for a silver level, or a family of four with an income of $35,000 will pay $114 a month, explained Heidi Siegfried, Director of Health Policy with the Center for Independence of the Disabled of NY.
The NY State of Health website has a tax credit and premium estimator where families can plug in their income to figure out their rates.
Starting in 2014, the small business tax credit will be available to eligible employers who purchase health insurance through the SHOP Marketplaces, worth up to 50% of their premium costs. Employers who qualify must have less than 25 full-time employees with average annual wages less than $50,000, and the employer must pay 50% of employees’ premiums. This tax credit is temporary and only available through plan year 2016.
14. How do I sign up?
Those living in Federally-facilitated Marketplace states such as Florida, New Jersey, Pennsylvania, Texas, Virginia, etc. can use this website, www.healthcare.gov, to apply for coverage, compare plans, and enroll.
New York State has opted for a State-based marketplace. Those who live in New York State can use this website, info.nystateofhealth.ny.gov, to apply for coverage, compare plans, and enroll.
“Navigators” will set up shop at libraries, food pantries and other spots across the city for one-on-one sessions. There will be a customer service center (1-855-355-5777) for those with questions.
You can also contact each insurance carrier offering Health Exchange plans you are interested in directly for assistance.
Starting on October 1, 2013, Rite Aid will have independent, licensed health insurance agents/brokers available in its 2,000 stores across the nation. Agents will receive a commission when they enroll members.
You will be able to use a licensed agent or broker who is certified by the state to provide guidance and enrollment in the Health Exchange plans. You will not pay more if you use an agent or broker. The premiums you pay will be the same with or without the help of agents or brokers. Agents/brokers are usually paid by the insurance companies whose policies they represent.
About the author
I am an experienced health insurance broker licensed in NY State representing 10 major insurance carriers, familiar household name companies, in NYC and the boroughs. I am truly unbiased in my concern to help people protect themselves from financial distress due to healthcare. My expert consultations are always free. My office is in NYC midtown west near Penn Station. Feel free to contact me at 646-599-4617 or at email@example.com for assistance.
Feel free to ask me about individual and small business NY Health Exchange plans as well as long-term care and Medicare health plans.
The opinions and services of Pai Gee-Janssens are not affiliated with Raymond James Financial Services.
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