A primer to Obamacare's impending changes

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If you're like the majority of the country, you are aware of some big changes coming to the American health care system in one month -- but you're not sure what it means to you.

For most Americans, the Oct. 1 launch of the online health care exchanges -- the Web marketplaces where consumers will be able to shop for a variety of health plans, and receive federal subsidies to help pay for the premiums -- won't be a big event.

That's because most people -- somewhere between 80 and 85 percent -- already have health insurance, either through an employer, or through Medicare or Medicaid, the two largest government-run insurance programs.

But that still leaves a big chunk of the population that's uninsured at any given time, and it's a piece of the population that skews young and poor.

That population needs to bone up on Obamacare over the next 30 days.

"They kind of know something's coming, but they don't know how it works," said Karen Pollitz, senior fellow at the Kaiser Family Foundation, a California research and advocacy group. Recent polling suggests an inverse relationship between awareness and need -- those who are most knowledgeable about the law already have health insurance.

About half of Americans say they don't understand how Obamacare will affect them or their family, according to an August poll from the Kaiser Family Foundation, but that proportion is much higher among the uninsured, at 62 percent.

Here are the answers you need for the questions you may have:

Q. If I'm uninsured, do I have to buy a policy right away?

A. No. Oct. 1 is when the online exchanges open for business, but the "open enrollment" window -- the period during which you can buy a policy for you and your family -- will last for six months. So between Oct. 1 and March 31, you can study your options and buy a policy. If you buy a policy early enough, coverage will kick in on Jan. 1.

Q. How much will it cost to buy a policy?

A. Depends on what kind of policy you want, and how much money you make. The better the policy, the higher the premiums -- but the lower your income, generally, the more tax credits and subsidies you'll receive from the federal government.

The easiest way to determine your potential costs is to visit Kaiser's online subsidy calculator (at kff.org/interactive/subsidy-calculator). For example, if you are a single, nonsmoking 28-year-old who makes $20,000 a year, that puts you at 174 percent of the federal poverty level.

And that means your annual premiums for a standard "silver-level" plan would be about $1,021 per year, or $85 a month, with annual government credits of up to $2,259. (Those aren't specific figures -- policy prices will differ state by state.)

Q. What's with the "levels?"

A. That's the government's way of describing the cost of the plans. Platinum plans cost most in terms of monthly premiums, but have the lowest copays for doctors visits and drugs, followed by gold, the silver baseline plan and then bronze.

In other words, according to the government, "The lower the premium, the higher the out-of-pocket costs when you need care; the higher the premium, the lower the out-of-pocket costs."

Q. Will my out-of-pocket costs be capped?

A. Yes, though that's a tricky issue. The cap -- supposed to apply across the board, not just to policies bought through the exchanges -- is now being delayed until 2015 for the population at large.

But for health plans sold in the new insurance exchanges, the caps will take effect in 2014 as planned, limiting a customer's annual deductibles and co-payments to $6,350 for an individual and $12,700 for a family.

Q. Will the government tax credits come before I pay my premiums, or afterward?

A. The tax credit can be advanced by the federal government, directly to the health insurer, but you have to choose that option when you enroll. If you don't choose that option, you'll have to pay the premiums up front and you'll receive the tax subsidy in one big chunk, after your annual taxes are filed.

There's a subtle difference between "subsidies" and "tax credits." The tax credits are available on a sliding scale to those making up to 400 percent of the federal poverty level. People making less than 250 percent of the poverty level are eligible for additional cost-sharing subsidies -- that is, you won't get a disbursement from the government, but you may be eligible for more generous plans, with lower copays and deductibles.

Q. So is this government insurance?

A. No. Private insurance companies will still be selling the plans. In Pennsylvania, those companies will probably include Highmark Inc., UPMC Health Plan, Capital BlueCross, Independence Blue Cross, Blue Cross of Northeastern Pennsylvania, Geisinger Health System, Aetna Inc. and HealthAmerica.

The government will be responsible for operating the exchanges. Some states have elected to build and operate their own exchanges, but Pennsylvania's will be operated, at least at first, by the federal government.

Q. Are the plans portable from state to state?

A. In general, no. If you buy a plan in Pennsylvania, then move to Illinois next year, you'll have a chance to buy a new policy when you get there.

Q. If my employer sponsors a health plan but I don't like the coverage, can I buy a plan from the exchange?

A. Yes, but you generally won't be eligible for any subsidies from the government, unless your employer's plan is so bad that it doesn't meet the government's minimum benefits standards (or if that coverage is so expensive that it eats up more than 9.5 percent of your income). If you have affordable employer-sponsored coverage, that's your best option.

Q. How will the government know whether my employer offers coverage? Or, if I don't file a tax return, how will the government know how much money I make?

A. There will be systemwide audits, but for the most part, in year one, we'll be operating on the honor system. According to The Washington Post, "The federal government will rely more heavily on consumers' self-reported information until 2015, when it plans to have stronger [income] verification systems in place."

Q. I keep hearing that the Medicaid expansion is happening in some states, but not others. Is it happening in Pennsylvania?

A. As of 2014, no. So if you're not eligible for Medicaid (the state's health care program for the poor and disabled) this year because your income is too high, you probably won't be in 2014 either. But as you sign up for a private plan, your broker or "navigator" (the people who will be fanning out over the next several months, helping people sign up for insurance plans) will check to make sure you aren't eligible for other government coverage.

Q. What if I don't buy a policy?

A. Last week, the Internal Revenue Service finally published the tax and penalty implications for those who can afford a policy but don't buy one. In year one, the penalty (or tax, depending on your political persuasion) is $95, or a maximum of 1 percent of household income. The penalty will increase to $695 per person or 2.5 percent of household income in 2016, and then will be adjusted annually after that.

There are exceptions. If you'd qualify for the federal government's proposed Medicaid expansion (that is, you make less than 138 percent of the federal poverty level), but you live in a state that has declined to expand the program -- like Pennsylvania -- you don't have to pay the penalty.

People who are temporarily uninsured between jobs and those who are members of Indian tribes are also largely exempt from the fines.

Q. Where do I get more information and sign up?

A. If you live in Pennsylvania, you'll sign up through the federal government site, at HealthCare.gov. You can also call toll free 1-800-318-2596.

Q. Can small businesses participate in the exchanges?

A. More or less. It's a separate marketplace, but the Small Business Health Options Program -- known as the SHOP marketplace -- is open to businesses with 50 or fewer full-time employees (later it will be expanded to small businesses with 100 full-time or full-time equivalent employees). As with those buying individual policies, your business may qualify for a health care tax subsidy, in this case worth up to 50 percent of premium costs.

Consult your broker or call toll free 1-800-706-7893 with questions about the SHOP marketplace.

businessnews - health

Bill Toland: btoland@post-gazette.com or 412-263-2625.


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