Affordable Care Act is here; we answer key questions

By Marissa Harshman, Columbian health reporter

Published:

 
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Where do small businesses purchase coverage for employees?

Only Kaiser Permanente applied, so Clark, Cowlitz firms can use exchange

The state also intended to launch on Oct. 1 its Small Business Health Options Program. However, only one insurer submitted plans to join the business exchange -- Kaiser Permanente Northwest.

As a result, the small-business exchange will only be offered in Clark and Cowlitz counties, where Kaiser already has a service network, said Richard Onizuka, chief executive officer for Washington Health Benefit Exchange.

The program is designed to operate similar to the individual exchange. The program provides small businesses -- those with fewer than 50 employees -- with a bigger tax credit if they purchase insurance for their employees through the exchange.

Currently, the Affordable Care Act gives small businesses a 35 percent tax credit for providing health insurance. If businesses purchase coverage offered in the SHOP exchange, the credit goes up to 50 percent, Onizuka said.

"We were disappointed in the fact that we didn't get the carriers in the SHOP plan," he said.

Initially, four or five different insurance carriers indicated they would join, but only Kaiser submitted a plan, Onizuka said. Officials with the Washington Health Benefit Exchange heard two main reasons for the change of heart, he said.

First, insurance carriers said their resources were being stretched too thin, he said. Those carriers were busy trying to prepare for the individual exchange and decided against participating in the SHOP exchange for the first couple of years.

Second, projected enrollment for SHOP was low, Onizuka said. The Health Benefit Exchange estimated only a few thousand people would utilize SHOP the first year. In the second year, they expect that number to go up to 10,000 to 15,000, he said.

With low projected enrollment, the risk for insurance carriers goes up, he said. Carriers couldn't predict the client population and were having a hard time determining rates, Onizuka said.

"We're working with the other carriers to see what we can do to get them to participate next year," he said.

In the meantime, small businesses in Clark and Cowlitz can take advantage of the exchange. Businesses in other counties of the state will have to purchase insurance through the regular market.

— Marissa Harshman

Important terms to know Websites to bookmark

• Affordable Care Act: President Barack Obama signed the Patient Protection and Affordable Care Act on March 23, 2010. The act put in place comprehensive health insurance reforms that began rolling out in 2010. The act is often referred to as "health care reform" or "Obamacare."

• Washington Health Benefit Exchange: A public-private partnership responsible for implementing the online health insurance marketplace. The Health Benefit Exchange works in coordination with the Washington State Health Care Authority, Office of the Insurance Commissioner and Department of Social and Health Services.

• Washington Healthplanfinder: An online marketplace where individuals, families and small businesses can find, compare and enroll in health plans. Healthplanfinder also determines Medicaid and tax credit eligibility. The online marketplace is also referred to as the "health insurance marketplace" and "health insurance exchange."

• Qualified health plan: A health plan that meets criteria and laws set by the Affordable Care Act.

• Plan options: Each qualified health plan will have several plan options with varying cost-sharing amounts.

• Insurers: The companies that provide health insurance plans.

• Individual mandate: The requirement that U.S. residents have health insurance or face fines.n Washington Healthplanfinder: http://www.wahealthplanfinder.org

• Washington Office of the Insurance Commissioner: http://www.insurance.wa.gov/current-issues-reform/health-care-reform

• Washington Health Benefit Exchange: http://www.wahbexchange.org

• U.S. Department of Health and Human Services: http://www.hhs.gov/healthcare

Ready or not, health care reform is here.

While some are already seeing changes as a result of the Affordable Care Act, the state is preparing to launch the piece of reform that will directly impact hundreds of thousands of Washingtonians: the health insurance marketplace.

In just over two months, Washington residents who need to purchase insurance for themselves or their families will begin exploring the new state-based marketplace. There, they'll compare benefits and prices and enroll in health plans in order to meet the most controversial component of health care reform: the individual mandate requiring Americans to have insurance.

Millions of Americans are expected to purchase coverage from state-based or federal insurance marketplaces, yet 45 percent of Americans say they haven't heard anything about the exchanges, according to a June survey by the Kaiser Family Foundation.

In Washington, an estimated 280,000 residents will enroll in health plans through the state-based marketplace, Washington Healthplanfinder, next year. By 2017, the state expects marketplace enrollment to be up to nearly half a million people.

In anticipation of the Oct. 1 marketplace launch in Washington, The Columbian has found answers to some of the most common questions surrounding the health insurance exchanges.

How many health plans will be available?

Nine insurers submitted applications to provide 57 health plans in the state of Washington.

Each of the plans will have four categories or options: bronze, silver, gold and platinum. The options are based on how much of the medical costs are paid by the health plan and how much is the member's responsibility through copays and co-insurance.

For bronze-level plans, the health plan pays 60 percent of costs. Silver plans cover 70 percent of costs, gold plans cover 80 percent and platinum plans pay for 90 percent.

The Washington State Office of the Insurance Commissioner is currently reviewing the various plans and plan options. Once the office completes its review, it will forward the plans that meet federal requirements to the Washington Health Benefit Exchange, the public-private partnership tasked with implementing the health insurance exchange.

The Health Benefit Exchange will perform its own review next month and announce the final plans this fall.

The state will allow all qualifying plans into the health insurance exchange. So it's possible Washington residents could have more than 200 options to choose from when purchasing their own health insurance, said Richard Onizuka, chief executive officer for Washington Health Benefit Exchange.

How do I enroll in a plan?

By Oct. 1, all of the accepted insurance plans will be on the Washington Healthplanfinder website. Washington residents will use the site to find, compare and enroll in health insurance.

Anyone who is purchasing insurance for themselves and their families (not receiving insurance from an employer) or enrolling in Medicaid (health coverage for low-income and disabled residents) will use the website.

"The website is the spot for everyone," Onizuka said. "The process will tell them what they qualify for."

Consumers will go to the website and input basic demographic information. From there, the website will determine whether residents are eligible for Medicaid or tax credits to help pay for coverage.

Those who qualify for Medicaid will be enrolled immediately, upon verification through the website. Those who qualify for tax credits will then have the opportunity to peruse the different plans and plan options to compare coverage and costs. Plan details will be available online when open enrollment begins Oct. 1. Coverage begins Jan. 1.

Washington residents have until March 31 to purchase coverage through the exchange. In most cases, those who miss the open enrollment period will have to wait until the next open enrollment -- which begins Oct. 15, 2014 -- to purchase coverage.

How do I know if I qualify for tax credits? And how much will I get?

Tax credits are determined based on age, family size and household income. Those making up to 400 percent of the federal poverty level are eligible for credits.

In Clark County, about 46 percent of households are potentially eligible for a tax credit to help pay for health insurance, according to the Health Benefit Exchange.

The Washington Healthplanfinder website has a calculator available to estimate plan costs, member share and tax credits. The calculator estimates costs for a silver plan based on national rates, since Washington rates aren't yet available.

The calculator estimates a family of four (two 40-year-old adults and two children younger than 21) with an annual income of $40,000 will receive $938 in tax credits per month. The premium for that family will be about $1,102, leaving the family responsible for $164 per month.

If that same family made $90,000 annually, the family would receive $390 in tax credits and would be responsible for $713 per month, according to the calculator.

A single 27-year-old making $30,000 a year will receive an estimated tax credit of $93 toward his or her $302-per-month premium, according to the calculator.

The tax credit is issued by the Internal Revenue Service. Consumers can use their tax credit monthly -- to lower the cost of their monthly insurance premium -- or annually on their income tax return, which will reduce what they owe or increase their refund amount.

Consumers must purchase insurance coverage through the exchange in order to receive a tax credit.

How do the proposed plans compare to current plans?

Prior to submitting proposed health plans, insurers predicted the rates for the new plans would be as much as 70 percent higher than current plan rates, said Stephanie Marquis, spokeswoman for the Office of the Insurance Commissioner.

"We were kind of bracing," she said.

But the rates came in lower than expected, Marquis said.

A comparison of the monthly premiums for the company that currently has the most individual plans in the state -- LifeWise Health Plan of Washington -- shows higher premiums for the proposed plans. The amount of the increase varies considerably.

A current LifeWise plan with a $2,500 deductible costs a 25-year-old nonsmoker $158 per month. Under a proposed silver-level plan with the same deductible, that 25-year-old will pay $255 per month.

A 50-year-old smoker on the current $2,500 deductible plan pays $458 per month. Under the proposed plan, he or she will pay $489.

While the rates are higher, Marquis said it's important to know the differences between plans. They can't be compared apples-to-apples, she said.

"Health insurance is more than just your monthly premium," Marquis said.

The Affordable Care Act requires every individual and small-group plan to cover 10 essential health benefits, which include emergency services, mental health care, substance abuse treatment, prescription drugs and maternity care.

Most of the state's current individual plans don't cover prescription drugs or maternity care, Marquis said. In addition, many current plans have high deductibles and high out-of-pocket costs before the health plan benefits kick in, she said.

So while premiums may be higher, an individual may get access to their benefits much faster under a proposed plan, Marquis said.

In addition, the rates for the proposed plans don't include any tax credits the individual may receive from the IRS.

What happens if I don't get insurance?

Beginning Jan. 1, U.S. residents are required to have health insurance or face fines. There are some exceptions to the individual mandate, including those who are incarcerated, members of American Indian tribes and those with income below the threshold for filing a tax return.

In 2014, the penalty for being uninsured is $95 per adult or 1 percent of the family income, whichever is greater. The fine increases each of the following two years -- $325 per adult (or 2 percent of family income) in 2015 and $695 per adult (or 2.5 percent of income) in 2016 -- and will continue to increase each year according to cost-of-living increases.

Where can I get help?

On Sept. 1, the Washington Health Benefit Exchange will open a call center.

The Spokane-based center will have about 60 representatives who can answer questions about health plans, the enrollment process and eligibility for tax credits. Bilingual representatives and translation services will also be available.

In addition, the Health Benefit Exchange awarded grants totalling nearly $6 million to 10 organizations across the state, including Clark County Public Health. Those organizations will serve as lead agencies for regional in-person assistance programs.

"They're going to be like the boots on the ground helping people," Onizuka said.

Clark County Public Health is working to finalize subcontracts with 13 local organizations, said Janis Koch, who is spearheading the health department program. Clark County Public Health will also oversee assistance programs in Skamania and Klickitat counties and will have subcontracts with organizations in those communities.

Public health officials will undergo 20 to 30 hours of training, which will conclude with a certification exam. Once trained, health officials will train staff at the partner organizations.

Once trained, the in-person assistants will provide impartial information to help residents determine which health plan is best for them. They'll also help with enrollment and answer questions.

Many of the in-person assistants will primarily work to enroll clients at their organizations. However, assistants will be available to help anyone in the community, not just their clients. In addition, some partner organizations will also hold enrollment events, Koch said.

The health department hopes to have the program up and running by Oct. 1.

Marissa Harshman: 360-735-4546; http://twitter.com/col_health; http://facebook.com/reporterharshman; marissa.harshman@columbian.com