KEY POINTS Thanks to tightened inventory, housing prices have been on the rise across the country. In some states, prices are hitting levels not seen since before the financial crisis,
A Guide To The New Exchanges For Health Insurance
The exchanges are likely to be most attractive to people who qualify for subsidized coverage. Individuals with low and moderate incomes may be eligible for a tax credit, which can be used right away, like a gift card, to reduce their monthly premiums. People with pre-existing conditions will no longer be denied coverage or charged more (this applies to most plans outside the exchanges, too). And all of the plans on the exchanges will be required to cover a list of essential services, from maternity care to mental health care.“In today’s individual market, it’s like Swiss cheese coverage,” said Sarah Dash, a research fellow at the Health Policy Institute at Georgetown University. “Consumers should have an easier time figuring out what they are getting for their money.”But it’s still going to take some time to analyze the plans and their costs, which are expected to vary widely across the states. And the coverage may still pinch many families’ budgets. Fortunately, there’s a six-month window, from now to March 31, for people to figure it all out.
Here’s some information to get you started:
Q. Where can I apply or get more information on the exchanges?
A. To avoid fraud artists, enter through the front door:Healthcare.gov. From there, you can find links to the exchange offered in your state. There may be technical glitches as the program gets started, so alternatively, you can call 1-800-318-2596.
Q . When does coverage go into effect?
A. You can apply as early as Oct. 1, but coverage won’t begin until Jan. 1. The enrollment period for coverage in 2014 closes on March 31, 2014. After that, you can enroll only if you have a major life event like a job loss, birth, marriage or divorce.
Q. What sort of coverage will be offered?
A. All plans will have to provide the same set of essential benefits, including prescriptions, preventive care, doctor visits, emergency services and hospitalization (this also applies to most individual and small-employer group plans sold outside of the exchanges). But plans can offer additional benefits, or different numbers of services like physical therapy, so you’ll need to do a side-by-side comparison to see what fits your needs — or at least the needs you can anticipate.
Q. Are the plans sold on the exchange more comprehensive than plans outside?
A. There are four plan levels, each named for a precious metal. They all generally offer the same essential benefits, but their cost structures vary. The lower the premium, the higher the out-of-pocket costs.The bronze level plan, for instance, has the lowest premiums, but will require consumers to shoulder more costs out of pocket. They generally cover 60 percent of a typical population’s out-of-pocket costs, and include deductibles, co-payments and coinsurance. The silver plans cover 70 percent; gold, 80 percent; while platinum covers 90 percent (and therefore carries the highest premiums).If you buy a plan on an exchange, your annual out-of-pocket costs cannot exceed $6,350 for individuals and $12,700 for a family of two or more in 2014. Catastrophic plans are also available to people under age 30 or those suffering a financial hardship. These carry high deductibles (equivalent to the out-of-pocket maximum, or $6,350 for a single person, in 2014). You cannot apply tax credits to these plans, either.Premiums will vary across the states because of a variety of factors, like market competition, the underlying cost of care and the negotiating power of the exchanges, according to Kaiser research.
Q. If the costs with plan levels are similar, how will plans differ within the metal levels?
A. Networks of doctors and hospitals will differ, and cost-sharing structures may also vary. One plan might have lower deductibles and higher co-pays, whereas another plan might have a separate deductible for prescriptions. Various medications may also be covered differently. “If you are someone who is taking medicines, make sure you know what your drugs will cost in the various plans being offered,” said Cheryl Fish-Parcham, deputy director of health policy at Families USA, a Washington consumer advocacy group.
Q. Will I be eligible for a premium tax credit (subsidized coverage)?
A. People with income between 100 percent of the poverty line (or about $23,550 for a family of four) and 400 percent of poverty ($94,200 for a family of four) are eligible for a tax credit to defray premium costs. (All income eligibility is based on your modified adjusted gross income; the online version of this column links to a guide explaining how that is calculated).The tax credits are set up so that consumers will not have to pay more than a certain percentage of their income, ranging from 2 percent for those with incomes of up to 133 percent of the poverty level ($15,282 for a single and $31,322 for a family of four) to 9.5 percent for those with income of 300 to 400 percent of the poverty level, according to the Center on Budget and Policy Priorities. The dollar amounts of the credits are calculated based on the costs of the second-to-lowest-cost silver plan available to you.Kaiser has a calculator that can give you an idea of your eligibility.
Q. Can I get help with my out-of-pocket expenses, like deductibles?
A. People with incomes between 100 percent of the federal poverty line ($23,550 for a family of four) and 250 percent ($58,875 for a family of four) are also eligible for cost-sharing reductions, which means you’ll pay less for items including deductibles and co-payments, and you’ll have lower out-of-pocket maximums.There is a big caveat: you can qualify for the reductions only if you buy a silver plan. When choosing a silver plan — and compare them closely, because they will differ — the exchange Web site will automatically show what you will pay, with the cost-sharing reductions included, according to the Center on Budget and Policy Priorities.Even if you’re tempted by the bronze plans’ lower premiums, remember you’ll probably end up paying more for out-of-pocket costs. For people who qualify for both premium and cost-sharing subsidies, the silver plan will usually be the better deal, Ms. Fish-Parcham said.
Q. Should I use all of my subsidy at once? How can I avoid owing taxes?
A. The premium subsidies are delivered in the form of a refundable tax credit, which can be used immediately to reduce your monthly premiums.You can use it all right away, or you can use part of it, or none at all. If you expect your income to remain the same, you might use the entire credit. But if your income is likely to rise, it may pay to use only a portion of the subsidy. That way, you’ll avoid owing money to the I.R.S. at tax time.If your income does change, report it to the exchange. If your income drops, you may be eligible for a larger credit. Changes in family size should also be reported. “It will all get reconciled on your taxes in the spring of 2015,” said Karen Pollitz, a senior fellow at the Kaiser Family Foundation.
Q. How can I find out if my doctor accepts exchange-based insurance?
A. Many of the insurance providers’ networks of doctors and hospitals will be narrower than are typically found in commercial insurance, as my colleague reported this week. So just because your doctor accepts, say, a Blue Cross plan provided by your employer, that doesn’t necessarily mean the doctor will take the same carrier’s plan offered on the exchange.The plans will be required to provide a directory that lists their network’s providers, Ms. Pollitz said, so inspect them carefully.
Q. How will I know if my drugs are covered by the plans?
A. The exchanges must include a summary of benefits and coverage for each plan. That includes information about what your co-payments would be for generic, brand name and specialty drugs. It should also provide a Web link to the plan’s list of covered drugs and how they are categorized by a particular plan, said Ms. Fish-Parcham.
Q. If I have employer-based coverage, can I go to the exchange for coverage?
A. You can, but you probably won’t want to. Your employer’s plan is usually a better deal. Many employers heavily subsidize your premiums and you can pay for your coverage using pretax dollars, something you can’t do if you buy coverage on the exchange.“Plus, employer plans are typically fairly generous,” said Lynn Quincy, a senior policy analyst at Consumers Union.Besides, if your employer offers you coverage, you probably won’t qualify for a tax credit unless your share of the premium (for the lowest-cost plan for individual coverage offered by your employer) is more than 9.5 percent of your modified adjusted gross income, Ms. Quincy explained.If your employer’s insurance plan doesn’t cover 60 percent of medical costs, on average (what’s known as “minimum value”) you may also qualify for subsidized coverage. Your employer is supposed to let you know where the plan falls in terms of minimum costs. “If you are spending huge amounts out of pocket each year and you have a high deductible, it’s worth looking at what your possibilities are,” said Sara R. Collins, vice president of the health care coverage and access program at the Commonwealth Fund.
Q. Am I eligible for Medicaid?
A. The health care law aimed to expand Medicaid so that everyone under age 65 would qualify if they earned up to 138 percent of the federal poverty level (that’s about $16,000 for an individual and $32,500 for a family of four in 2014). But the Supreme Court ruled in June that the decision to expand Medicaid is up to the states — and only 26 states have decided to move forward, according to Kaiser.
Q. So if I’m poor but not eligible for Medicaid, can I get insurance on the exchange?
A. Yes, but unfortunately, many people in this situation won’t be able to afford it. People who don’t qualify for their state’s Medicaid program but earn too little to qualify for subsidies on the exchange will have to pay full price for the coverage offered on the exchanges. So if you can’t get Medicaid and your income is below 100 percent of the poverty level, you will not be eligible for subsidized coverage on the exchange.
Q. What if I’m self-employed or own a small business?
A. If you’re self-employed with no employees, you can shop for coverage on the exchange.If you have fewer than 50 employees, you can get coverage for yourself and your workers though the Small Business Health Options program, known as the SHOP Marketplace. “Small employers have always wanted to have the buying clout of a large employer and the SHOP exchanges offer them just that,” said Kevin Lucia, project director at Georgetown University’s Health Policy Institute.
Q. What are the penalties for not having coverage? Are there any exceptions?
A. Most people will be required to have insurance, with some exceptions. You are not required to buy insurance if: the cost of insurance premiums would exceed 8 percent of your income, your income is below the threshold for filing taxes, you have a certified hardship, or you would have qualified for Medicaid but live in a state that did not expand the program. Illegal immigrants, the incarcerated, members of Indian tribes and those who qualify for certain religious reasons are also exempt.
Michael Pion was voted Harrisburg Magazines Readers Choice Best Realtor for 2016 and was also voted 2014 REALTOR of the Year by the local REALTOR's association for his outstanding service, high princi....
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