As part of the Washington Post’s continuing series of online discussions about the health law’s new insurance marketplaces, Insuring Your Health columnist Michelle Andrews answered readers questions today.
A transcript of today’s discussion follows.
READER QUESTION: Can you explain the difference between purchasing insurance via a state exchange versus the open market? Will there be major differences in costs/coverage option between the two markets?
MICHELLE ANDREWS: Starting in January, individual and small group plans sold both on the exchanges and through the private market will be more alike than different. No one can be turned down for medical conditions or charged a higher rate for them. All plans must cover 10 “essential health benefits. People will choose from among four different plan types–the proportion of costs that consumers pay will vary. But there will be some crucial differences. Consumers can only get subsidies to reduce the cost of coverage if they buy a plan on the exchange. That’s important, since an estimated 80 percent of people who buy on the exchange will be eligible for subsidies. On the other hand, if you want to buy a plan from a particular insurer you might have to buy on the private market because not all insurers will be selling plans on the exchanges.
READER QUESTION: Under the ACA, the premiums are supposed to be based on the numbers of enrollees to the program. How are the initial premiums set and what are they based on? When will the accurate premiums start?
MICHELLE ANDREWS: Premiums for individual and small group plans sold on the exchanges, or marketplaces, can only vary based on a few things, and the number of enrollees in the program isn’t one of them. Premiums can vary based on family size, where you live, the type of plan you buy, whether you smoke and your age.
READER QUESTION: Will plans that have various administrators (pharmacy, etc) be able to utilize separate out-of-pocket maximums for each administrator?
MICHELLE ANDREWS: In 2014 only, plans that use separate administrators for different services, such as medical benefits and pharmacy benefits, can permit separate annual out-of-pocket maximums for each type of service. If a pharmacy plan has no limit on out-of-pocket spending, that will also be permitted next year. But in subsequent years, there will be single out-of-pocket maximum for all services. The amount will change, but next year it’s $6,350 for individuals and $12,700 for families.
READER QUESTION: My husband and I are nearing 60 and expect that we may lose our jobs and our job-related insurance in the next year or so. If that happens, we will start drawing our 401K and our income will drop by about half. Would the income that qualifies us for a subsidy be based on the last tax year, or on the income we expect in the upcoming year?
MICHELLE ANDREWS: When you sign up for a plan on the exchange, you’ll be asked to estimate your income for the following year to determine your eligibility for subsidies. At the end of the year the IRS will reconcile your estimate with your actual income. If you received a premium tax credit amount that was too high based on your income, you may have to pay it back. So if your income changes during the year or is higher or lower than you estimated it’s important to contact the exchange to let them know promptly so they can adjust your credit.
READER QUESTION: Do the Obamacare insurance plans cover medications?
MICHELLE ANDREWS: Yes, all plans sold on the health insurance marketplaces must cover prescription drugs. It’s one of the 10 “essential health benefits,” along with emergency care and doctor visits, hospitalization, maternity care, rehab and lab services, among others.
READER QUESTION: Besides the initial open enrollment dates, what will be the annual open enrollment dates going forward? Currently I am on COBRA, which ends in Oct 2014. Will I be able to enroll at that time?
MICHELLE ANDREWS: This first year, annual enrollment will run from Oct. 1 through March 31 of next year. In 2014, annual enrollment will run from Oct. 15 to Dec. 7.
READER QUESTION: We have a daughter who will turn 26 this coming year and who lives at home. She has medical complications (epilepsy). When she applies for insurance, will she be regarded as an unemployed adult with no income? Will she therefore be eligible for premium subsidy, or will she have to include our household income since she lives in our house? My wife and I are both employed, though I am 69 and she is 61.
MICHELLE ANDREWS: In general, if you claim your daughter as a dependent on your income taxes, her eligibility for subsidies will be based on your household income. If your household income is less than 400 percent of the federal poverty level, she may be eligible. If, however, you have access to health insurance through your jobs that’s considered affordable and adequate under the health law, she may not be eligible for subsidies regardless of your household income.
READER QUESTION: Our daughter is currently a student and is enrolled in a Virginia University. We have health care through my employer, but it does not offer dependent (non-spousal) coverage. So we previously purchased an individual policy for her that we will need to change to get one that is ACA compliant. As an unemployed adult, but also under 26 and a student, does she qualify to apply for a policy through the exchange?
MICHELLE ANDREWS: Almost anyone can shop for a plan on the exchange. The question is whether she’d be eligible for subsidies. If you claim her as a dependent on your taxes and your employer plan doesn’t offer dependent coverage, she may be eligible for subsidies if your household income is less than 400 percent of the federal poverty level. If she’s not a tax dependent, then her eligibility for subsidies would generally be based on her own income.
READER QUESTION: We have insurance through my husband’s employer, who pays a small portion of it. However, we do not like the plan and the premiums just went up. Can we shop on the exchange for better options?
MICHELLE ANDREWS: Almost anyone can shop on the exchanges for coverage, and you can too even though your husband’s employer offers coverage. But you’ll only be eligible for subsidies on the exchanges if the employer coverage is considered unaffordable–meaning it costs more than 9.5 percent of your income for self-only coverage–or inadequate–meaning it doesn’t pay for at least 60 percent of allowed medical costs.
READER QUESTION: Hi! I am 61 and retired. My husband an I live on investment money. I currently buy individual insurance, a high deductible. I take no medications. Clearly, I am lucky in several respects. I live in Pennsylvania. Am I eligible for an exchange?
MICHELLE ANDREWS: Almost anyone can shop for a policy on the exchanges, but you may not be eligible for subsidies if your income exceeds 400 percent of the federal poverty level or you have access to other forms of coverage, such as through an employer plan or Medicare.
READER QUESTION: My daughter got married and kept her individual policy. Her husband kept the individual policy he had as well. She is now pregnant and her carrier has informed her that she must get new insurance by January 1 as it will no longer be providing individual policies in Maryland. Can they just drop her? Can she simply pick up a new family policy under the new insurance system? Will she be penalized in pricing because she is pregnant?
MICHELLE ANDREWS: Generally, individual insurers have a transition plan in place for members to move them into plans that are compliant with the requirements of the Affordable Care Act. But in any case, starting in January, your daughter will be able to sign up with a plan on the individual market. In the past, insurers typically turned women down and wouldn’t insure them if they were pregnant because it was considered a pre-existing condition. Under the ACA, they will no longer be able to turn her down because she’s pregnant nor charge her a higher premium.
READER QUESTION: I am a very low income person with no insurance. How do I get insurance when I can’t afford it? How do I try to qualify for Medicaid?
MICHELLE ANDREWS: Go to healthcare.gov and search for information about the Medicaid expansion. If yours is one of the roughly half of states that are expanding Medicaid eligibility to individuals with incomes up to 138 percent of the federal poverty level you may qualify.
READER QUESTION: If you lose job-based insurance in 2014 after the marketplace open enrollment period (for example, if a worker didn’t maintain enough hours to continue to quality for their company plan), will you still be able to buy insurance on the marketplace after open enrollment?
MICHELLE ANDREWS: Losing job-based insurance is one of the life events that may qualify someone for a special enrollment period lasting 60 days during which he or she could shop for coverage on the health insurance marketplace outside the regular open enrollment period.