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Guide to Obamacare rollout: Mandates, exchanges, and more on way

Laurel Andrews
401(K)2013 / cc via flickr

Hang on: a huge shift is coming to Alaska health care. The Patient Protection and Affordable Care Act, a.k.a. Obamacare, signed into law on March 23, 2010, brought a massive realignment of the national health care system, along with more than 20,000 pages of new regulations and daunting federal oversight.

Next Tuesday, one of the law’s major reforms, healthcare exchanges, open their virtual doors. The websites offer side-by-side comparisons of health insurance plans. The individual mandate takes effect Jan. 1, and most U.S. citizens must be insured by March 31, 2014. Those who don’t have employer health plans can purchase insurance on the exchange. The uninsured will be taxed by the IRS for failing to maintain coverage.

The individual mandate has been the source of intense scrutiny and has polarized families and lawmakers. On Wednesday, Alaska Sen. Lisa Murkowski reaffirmed her distaste for what she called a “bad law” during a press conference and vowed to continue working to defund the individual mandate for 2014.

Assuming that Congress does not successfully defund the individual mandate for the upcoming year – unlikely with a Democratic Senate and president – the exchanges go live Tuesday.

The individuate mandate seeks to provide insurance to the 21 percent of Alaska residents - 139,422 people - who are uninsured. But with the mandate comes a slew of laws and intricacies, as well as questions about who will pay higher rates, and why.

Let’s sort out some of the basics of the Affordable Care Act and get better acquainted with our obligations.

What is the individual mandate?

ACA mandates that people who do not have health care buy an individual plan for themselves and any dependents. Everyone must be insured by Jan. 1, 2014, and thereafter.

To achieve this, Congress and the Department of Health and Human Services created online portals for insurance purchasing and comparing. The Health Insurance Marketplace plans are offered from different insurers and brings plans into roughly similar costs. Consumers have different options for plans, and some are more comprehensive than others.

While some states elected to set up their own Marketplaces, Gov. Sean Parnell deferred to the federal government, which provides exchanges to states that didn’t participate or elect to regulate insurers.

Plans not on the Marketplace are also available for residents. The major difference with these plans is that they are not eligible for the federal tax subsidy that some people will qualify for (read on for more info on that).

Americans have from Oct. 1 to March 31, 2014 to sign up for the year of 2014.

Who is exempt?

Some people do not need to sign up for the individual health care. If you already have health care, whether through your employer, Medicaid or Medicare, Indian or Alaska Native healthcare, Veterans Administration or other plans already administered by the government, forget about it. You are already covered and don’t need to do anything on Tuesday.

Other exempted groups include prisoners, illegal immigrants, members of a health-care sharing ministry and groups that qualify for a religious exemption from the IRS.

You likewise do not need to sign up if you do not file a tax return because your income is low enough. Certain hardship exemptions also apply, such as being a victim of recent domestic violence.

To avoid being fined, you will need to file for an exemption, unless you are an illegal immigrant or your income is so low you don’t file a tax return. In those cases, you don’t need to do anything.

Some people have “grandfathered plans” – continuous health insurance coverage predating the law’s passage on March 23, 2010. Grandfathered plans won’t change and those insured needn’t do anything.

Premera Blue Cross has sent letters to Alaskans on these plans to let them know whether their plans are grandfathered in. The grandfathered plans don’t have the increased coverage benefits, but are cheaper than the new plans.

Who has to sign up?

Individuals and households without health care who do not fall into the above groups must sign up or face a tax when filing their 2014 returns.

Does my employer have to offer me health care?

Small-business employers (those with fewer than 50 full-time employees) do not have to offer health insurance to their employees. Employees will receive a notice on Oct. 1 stating whether their small-business employer will be offering health care.

Large businesses will have to offer health care to full-time workers by 2015. Full-time employees are defined as those working 30 hours or more.

What Alaska providers offer individual health care plans?

Premera Blue Cross and Moda Health are offering health care plans on the Marketplace, and you can view the detailed plans, including costs, coverage and deductibles on their websites now.

Two other insurance companies, Aetna and Assurance Health, will offer health-care plans that are not on the Marketplace exchange, alongside Premera and Moda Health. The difference? Plans off the Marketplace will not be eligible for the tax subsidy. So, if your income is too high to qualify for a tax credit, you may want to check out these plans as well.

The only other difference is that plans on the Marketplace do not provide coverage for abortions, whereas plans off the Marketplace do (as they are not federally funded).

How much will the new plans cost?

Rates are increasing – in some cases drastically. Alaska has the second highest rates in the nation, at an average of $474 per silver plan, according to a Department of Health and Social Services report released Wednesday.

In Alaska, three rate categories exist: Gold, silver and bronze. Gold offers the most coverage and lowest deductible costs, and thus has the most expensive monthly premium. Silver and bronze offer less coverage at a lower – but still spendy -- price.  A “catastrophic” plan is also offered for people under 30 who are looking for only emergency coverage.

Rates increase with age. Every year, your rate will increase slightly.

Premera has chosen to add two other variables: Where you live in Alaska, and whether you smoke. If you live in Anchorage, your rates will be slightly more expensive than if you live in Fairbanks or the Matanuska-Susitna Borough. Rates in Juneau and rural Alaska are cheapest. That’s because people in Anchorage take advantage of available health care more often than people in other parts of the state, boosting the total costs for the area.

If you are a smoker, your rates will be 7.5 percent higher with Premera. (Note: Smoker is defined as smoking tobacco at least four times a week. Smoking marijuana does not count.)

  • Under Moda Health, a 35-year-old will pay $364 for a silver plan.
  • Under Premera Blue Cross, the cost for a similar plan is $471 a month for a 35-year-old non-smoker, living in Anchorage.
  • Also under Premera Blue Cross, for non-smoking family of four in Anchorage, with two 45-year-olds and two dependents under 20, the household will be charged a whopping $1,604 per month.

Some people will be eligible for a federal tax credit, however. These subsidies that significantly cut the cost of health care.

Will I qualify for federal tax credits?

Federal tax credits will be available to individuals and households earning between 100 and 400 percent of the federal poverty level. For Alaska (since our federal poverty level is higher than most states) that’s between $14,350 and $57,400 per individual, and between $29,440 and $117,760 for a family of four.

The less you make, the less you will have to pay.

For example:

• A family of four making $29,440 per year will have to pay 2 percent of their income – or $49 per month, to insure their entire family.

• A household of two making $29,070 will have to pay 4 percent, or $97 to insure both people, per month.

• A single person making $28,700 will have to pay 6.3 percent, or $151 per month.

• A single person making $57,400 will have to pay 9.50 percent, or $454 per month.

The tax credits rates are for the second-least expensive “silver” health care plans.

To find out whether you qualify for tax credits, you will punch in a number of your projected income for 2014 when applying on the Marketplace. This will be easy for folks who work full-time and are not looking to change jobs. However, if you are a seasonal employee or your work varies, this may be much harder. You’ll have to do the math and take your best guess. If you end up making more or less, you will either get a reimbursement, or you’ll owe the Feds some money next year.

If you make more than 400 percent the federal poverty level (more than $57,400 for an individual) you will have to choose from the health care rates without subsidies.

Why the increased costs?

There are “10 essential health benefits” that all insurance coverage must carry, including maternity care, behavioral health treatment, prescription drugs and preventive services. There are no lifetime coverage caps, so people can receive as much coverage as necessary throughout their lives. Also, ACA eliminates the cost difference for women and men; women were traditionally charged more than men, because of the costs of pregnancies. All these factor into the increased health costs.

Also, ACA mandated that a 64-year-old could not be charged more than three times what a 21 year-old is being charged for health care – even though 64-year-olds cost the system seven times what 21-year-olds do. Thus, young people are picking up some of the tab for the elderly.

What if I don’t sign up?

If you don’t sign up for health care by March 31, 2014, you will be fined. The Feds are calling it the “individual shared responsibility payment.”   

When you file your 2014 taxes, you’ll need to state whether you have health care. If you do not, you will be levied a fine of either $95 or 1% of your income for that year, whichever is greater. The rates increase every year, so if you still don’t have health care in 2015, you’ll be fined either $325 of 2 percent – and by 2016, you’ll be fined $695, or 2.5 percent of your income, whichever is greater. Everyone is fined the same percentage, so the more you make, the more you pay.

What’s up with Medicaid expansion in Alaska?

The Federal government sought to expand the federal entitlement program Medicaid to include more people living under the federal poverty level. The Feds say they will pay for 100 percent of the expansion until 2020, after which the Feds will pay 90 percent.

The question of Medicaid expansion in Alaska remains to be seen. The U.S. Supreme Court struck down the part of the Affordable Care act forcing states to expand Medicaid, so states decide individually whether or not to expand. Gov. Parnell says he will announce his plans in December, along with the rest of his budget.

If he does choose to expand Medicaid, people 138 percent above the federal poverty level ($14,350 for an individual) will get their health care under Medicaid.

If Parnell chooses not to expand Medicaid, some people with low incomes will qualify for neither the federal subsidy nor Medicaid.

Signing up for individual mandates

On Oct. 1, head to healthcare.gov to review your options and see if you qualify for federal tax subsidies, or call 1-800-318-2596. The Alaska Native Tribal Health Consortium received a federal grant to help folks sign up, as did the United WayNorthrim Benefits Group is also working to help enroll residents.

Joshua Weinstein at Northrim Benefits, Jason Gootee at Moda Health, and Melanie Coon at Premera Blue Cross assisted with providing the above information.

Contact Laurel Andrews at laurel(at)alaskadispatch.com

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