Topics: Insuring Your Health, Insurance, Health Reform
Consumer columnist Michelle Andrews outlines the health insurance options for people offered coverage at work. A transcript follows.
Q: In 2014, can an individual with employer-sponsored health insurance drop that coverage and then either get coverage through a state exchange or just go without insurance and pay the individual mandate penalty?
A: Starting in 2014, most people can buy health insurance on the state exchanges, and people with incomes up to 400 percent of the federal poverty level may qualify for premium tax credits to make coverage more affordable. But not everyone will qualify for this subsidized coverage. If your employer offers job-based insurance and you choose to buy a plan on the exchange instead you generally won't qualify for subsidies unless your employer coverage is considered to be either unaffordable or inadequate. Your employer coverage would be considered unaffordable if the premium for individual coverage costs more than 9.5 percent of your income. It would be considered inadequate if it doesn't cover at least 60 percent of your allowed medical costs. If you choose, you can skip having insurance altogether but, as you noted, if you do you'll owe a penalty. In 2014, the penalty for not having health insurance will be either $95 or 1 percent of your household income, whichever is greater. The penalty will gradually increase until in 2016 it reaches the greater of $695 or 2.5 percent of your income. But consider your decision carefully. If you decide not to buy insurance during the open enrollment period that started this fall and continues through next March, if you get sick and change your mind you won't be able to buy a policy through the state exchanges until the next open enrollment period. There are some exceptions to that, but generally you would have to wait.
Topics: Insuring Your Health, Insurance, Aging
Q: I am a widow receiving medical coverage through COBRA and reimburse my husband’s former employer for the premium. Is it possible to continue "buying" my coverage through the company once the maximum 36 months are over?
A: That's probably not going to be possible. Under the federal law known as COBRA, you're entitled to continue coverage under your husband's former health insurance plan for up to 36 months following his death. But according to benefits consultants I asked, the company would be unlikely to continue that coverage beyond the timeframe spelled out in the law because it could be perceived as an arbitrary decision, and companies need to be consistent in their coverage decisions. If you exhaust your COBRA coverage, however, and you're not eligible for another group health plan, under federal law you're guaranteed access to an individual insurance plan. Unfortunately, the coverage may be expensive, especially if you have pre-existing medical conditions. Starting in January, the situation should improve. You'll be able to go onto your state's health insurance exchange and look for individual coverage there. Insurers won't be allowed to turn you down because of medical conditions nor charge you a higher rate, and depending on your income you may qualify for a premium tax credit to make coverage more affordable.
Topics: Health Reform, Marketplace, Insurance, Insuring Your Health
Insuring Your Health columnist Michelle Andrews helps you navigate the new insurance marketplaces that are scheduled to launch on Oct. 1.
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Q: Do I have to buy through the marketplace or can I get my insurance on the private market?
A: If you have good coverage available to you, either through your job, Medicare or Medicaid, you probably won’t need to shop for coverage through a marketplace. If you don’t have such coverage though, in most states you'll be able to look for coverage either through the marketplace or on the private market next year. The District of Columbia and Vermont are the only exceptions; all of their individual and small-group policies will be sold through the exchanges.
In other states, new individual and small-group plans sold on the exchanges or in the private market must all cover the same package of 10 essential health benefits and conform to the same cost-sharing standards. But premium tax credits and cost-sharing subsidies that will make coverage more affordable will only be available for plans purchased through the marketplaces. That's worth keeping in mind.
If you make more than 400 percent of the federal poverty level-about $46,000 for an individual or $94,000 for a family of four, you won't be eligible for subsidies on the exchanges and may want to shop there and in the private market. If you're currently insured and you want to hang onto the plan you have, you can do that on the private market as well.
More From This Series: Shopping For Coverage
More Consumer Topics: Insuring Your Health
Q: How many choices will consumers have in a marketplace? Will PPOs and HMOs be included?
A: The number of plans that consumers will have to choose from is likely to vary widely. In some states, only a couple of insurers have announced plans to offer policies though the marketplace, while in others there may be a dozen or more. Even within a state, there will be differences in the number of plans available in different areas. You can expect that insurers will offer a variety of types of plans, including familiar models like PPOs and HMOs.
There will be some important differences, however. All of the plans sold on the exchanges will offer a similar package of 10 essential health benefits that provide comprehensive coverage. How much consumers will owe in cost sharing will vary depending on which of four types of plan they choose.
In a platinum plan, the most generous plan offered, the insurer will pay 90 percent of covered medical expenses and the consumer will be responsible for 10 percent, on average. In a gold plan, the insurer will pay 80 percent and the consumer 20 percent. Silver plans will pay 70 percent and bronze plans 60 percent.
There will also be a high deductible catastrophic plan that's available to people up to age 30. It will cover only limited benefits before the deductible is met.
Q: When a consumer enrolls in a marketplace plan is it for a year of coverage or longer? Can an insurer drop a consumer?
A: As long as you keep up with your insurance premiums and don't lie on your application for insurance by claiming that you're younger than you really are, for example, your insurer can't drop you.
Generally, people will be able to enroll in or change plans once a year during the annual open enrollment period. This first year, open enrollment on the exchanges will run for six months, from Oct. 1 through March of next year. But in subsequent years the time period will be shorter, just a few months long.
There are certain circumstances when people will be able to change plans or add or drop someone from coverage outside the regular annual enrollment period. This could happen if you lose your job, for example, or get married, divorced or have a child.
Q: Will the premiums be more expensive than what is offered on the individual market? How about co-pays, are they comparable?
A: New individual and small-group plans offered both through the health insurance marketplaces and on the private market will all have to offer a package of 10 essential health benefits, including prescription drugs, emergency and hospital care, and maternity care, among other things. They will also have to meet the same standards for consumer cost sharing. So experts don't expect that premiums on or off the exchanges will be very different.
Here's how it will work. There will be four types of plans with different levels of consumer cost sharing. In a platinum plan, the insurer will pay 90 percent of covered medical expenses and the consumer will be responsible for 10 percent, on average. In a gold plan, the insurer will pay 80 percent and the consumer 20 percent. Silver plans will pay 70 percent and bronze plans 60 percent. Within each type of plan, insurers will generally have some flexibility to vary deductibles, copayments and coinsurance.
Even though premiums may be comparable on and off the exchanges, there's a key difference to keep in mind. Consumers who buy a health plan through the online marketplaces may be eligible for premium tax credits there that can substantially reduce the sticker price on their policy.
Q: Is everyone who qualifies treated the same in this new marketplace? Do younger people get lower rates and people with pre-existing conditions get higher rates?
A: Starting next year, no one can be charged higher rates for health insurance because they have pre-existing medical conditions. But there are a few other individual details that insurers can factor in when setting premiums, including age and tobacco use. The law allows premiums for older people to be up to three times higher than those of younger people. That may seem like a lot, but in plans currently sold on the individual market, the differential between the two is often much greater.
The law also allows insurers to charge smokers 50 percent higher premiums for coverage on the exchanges than non-smokers. Smokers do tend to have higher health care costs than non-smokers. Still, a handful of states have decided not to implement this surcharge. They figure that the higher premiums may make coverage unaffordable for some smokers, who typically have lower incomes in the first place. Besides, they say, evidence is scant that charging people more for health insurance actually encourages them quit smoking.
Q: Is there is basic package of benefits that each insurance company must offer if it is part of a marketplace?
A: To ensure that plans sold on the state-based marketplaces provide comprehensive coverage, every plan must cover 10 so-called essential health benefits. The required benefits include prescription drugs, emergency and hospital care, doctor visits, maternity and mental health services, rehabilitation and lab services, among others. In addition, recommended preventive services must be covered without any out-of-pocket costs to consumers.
If states have additional mandated benefits, for infertility treatment or autism, for example, those services will also generally be included in the plans offered through the state marketplaces.
Q: Who can get government subsidies to help pay for insurance obtained through a marketplace? How will that work?
A: There are two types of subsidies that will be available. People with incomes up to 400 percent of the federal poverty level--about $46,000 for an individual or $94,000 for a family of four--may be eligible for premium tax credits to reduce the price of a policy. Cost-sharing subsidies that reduce a plan's deductibles, copayments and total out-of-pocket costs will be available to people with incomes up to 250 percent of the poverty level, or about $29,000.
During the online application process, you'll be asked to provide information about your income, which will be fed into a centralized data hub to determine your eligibility for subsidies.
Subsidies will generally be sent directly to the insurer, and the amount you owe in premiums or cost-sharing will be reduced.
If your income increases during the year, notify the exchange promptly so that you can avoid having to pay any tax credit overpayments. On the other hand, if your income goes down you could be eligible for a bigger subsidy. Either way it's important to notify the exchange if your income changes.
Q: If I don't currently have coverage and I'm required to obtain it because of the individual mandate, how can an exchange help me?
A: Through the marketplace, you can easily compare health plans in your area. But probably the biggest advantage to using the state marketplace is that through it you can find out if you're eligible for subsidies that will help make any health plan you buy on the exchange more affordable. Subsidies will be available to people with incomes up to 400 percent of the federal poverty level, or about $46,000 for an individual. In addition, if you're low income you can also learn if you or your family members are eligible for Medicaid or the Children's Health Insurance Program through the marketplace. If it turns out that you can't find a plan that costs less that 8 percent of your income, the marketplace is where you can apply for an exemption from the individual mandate.
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Q: When must a consumer enroll in an exchange in order to start getting insurance benefits in January, 2014?
A: The online marketplaces will open for business on Oct. 1. That's when people will be able to begin checking out the health plans that are available in their area and signing up. The open enrollment period will run through March of 2014. If you want coverage to begin on Jan. 1, though, you'll generally need to sign up by Dec. 15 of this year, although some states may allow you a little more time. Still, consumer advocates that I've spoken with say that it's probably not a good idea to put off applying for coverage until the last minute, because during this first year of operation the exchanges will probably be working out some kinks and the process may take longer than expected.
Q: How does someone qualify to enroll in a marketplace? Are the rules the same in every state?
A: Almost anyone can shop for health insurance through the online state marketplaces, sometimes called exchanges, that will open in October. The only real exception is immigrants who are in this country illegally. They can't buy coverage on the exchanges under any circumstances. That's true whether your state is running its own exchange or letting the federal government do so.
Even though practically anyone can shop for coverage on a state exchange, only certain people will qualify for subsidies to make coverage more affordable there. Subsidies will be available to people with incomes up to 400 percent of the federal poverty level. That's about $46,000 for one person or $94,000 for a family of four.
Subsidies will only be available to people who don't have good coverage available elsewhere. So if you're eligible for Medicare or Medicaid, you can't get subsidies on the exchanges. Likewise, if your employer offers good coverage you won't qualify for subsidies. Good coverage in this case means a plan that doesn't cost more than 9 1/2 percent of your income and pays at least 60 percent of your covered medical expenses. If your employer plan comes up short in either of those areas, you could qualify for subsidized coverage on an exchange.
Topics: Insuring Your Health, Insurance, Marketplace
Michelle Andrews answers a question from a reader about if the health law requires employer-sponsored insurance to cover maternity benefits for an employee’s dependents.
Read Related Story >> Advocacy Group Seeks To Force Employers To Give Pregnancy Coverage To Dependents
QUESTION: Does the ACA require employer sponsored insurance plans to provide pregnancy benefits to children of employees who are covered under their parent's plan? -- Jim
ANDREWS: Federal law requires group health plans with 15 or more employees to cover maternity benefits for employees and their spouses. But the law doesn't require that coverage for other dependents, including the children of employees. Under the Affordable Care Act, young adults can now stay on their parents' health plans until they turn 26, but unfortunately they may still not be covered if they get pregnant. The law requires most individual and small group plans to cover maternity and newborn care as one of 10 "essential health benefits." But those provisions don't apply to the large-group plans that many people belong to. The children of workers at those companies may not be covered if they get pregnant.
Michelle Andrews answers a question from a reader about how the health law affects insurance for smokers and programs may help them quit.
QUESTION: The health law will soon allow some insurers to charge up to 50 percent higher premiums for smokers. How will the insurer know who is a smoker? As an HR rep, how will I be able to convince our employees to take this seriously? -- Ann
ANDREWS: The provisions that allow insurers to charge smokers higher premiums take effect in January and apply to health plans sold on the individual and small group markets that aren't grandfathered under the law. The insurer may well rely on people to self-report their tobacco use, asking them, for example, if they've used tobacco regularly in the past six months. You're apparently concerned that people won't disclose that they're smokers, and some may not. But it's important to remember that research shows that most smokers want to quit, and under the health law people won't be penalized as long as they're trying to do so, even if they don't succeed. If a company has a wellness program that offers a tobacco cessation program and if smokers participate in it, they're not going to have to pay the higher rate. Participation is enough, workers don't have to actually succeed at quitting, which often takes several tries. So that may encourage people to 'fess up to their smoking habit.
Michelle Andrews answers a question from a reader about who pays first when there is coverage from two insurance plans.
QUESTION: I have a high deductible health insurance policy and my wife is in an HMO. I use the HMO for medical services and use my HRA to pay long-term care insurance premiums and dental expenses. This year, the HMO began sending bills to my insurer instead, so now money is being drained from my HRA account. Can this be stopped? -- Peter
ANDREWS: It probably can't be stopped. It sounds as if what you're describing has to do with so-called "coordination of benefits" rules. These are rules that spell out which insurer is responsible for paying first and which pays second in situations where someone is covered under two different policies, in this case yours and your wife's. Benefits experts I asked said that in general if you're covered as an employee under your employer's plan that policy is going to be responsible for paying your claims first. Your wife's plan, under which you're covered as a dependent, would generally pay second, perhaps, for example, covering benefits that your primary insurer doesn't cover.
Topics: Insuring Your Health, Insurance, Hospitals, Health Costs, Delivery of Care
Michelle Andrews answers a reader question about emergency room and out-of-network hospital cost changes under the health law.
QUESTION: I went to an out-of-network hospital but my insurance case worker told me I would be covered since I was admitted through the ER. Can my insurer now deny coverage? -- Michael
ANDREWS: It's unlikely that your insurer would deny coverage altogether if you were admitted to an out-of-network hospital. But it might refuse to cover your hospital care at in-network rates. Consumers now have better protection for emergency care they receive at out-of-network facilities. Under the health care overhaul, in most instances insurers can't charge higher copayments or coinsurance if people wind up getting emergency care at an out-of-network hospital. However, if you're admitted to the hospital following a visit to an out-of-network ER, you're no longer protected from higher cost-sharing. The insurer can charge you for your hospital care based on your plan's regular out-of-network coverage rules.
Topics: Insuring Your Health, Insurance
Michelle Andrews answers a reader question about having to repay an insurer that says it reimbursed too much after the patient received care from an out-of-network provider.
QUESTION: I recently received a bill from my insurer related to a pre-approved operation three years earlier with an out-of-network provider. The insurer says it mistakenly reimbursed me too much and I owe $9,100. Can they do this? – Lisa.
ANDREWS: They may be able to ask you to repay that money. These situations can come up for different reasons, but often you’ll see it in instances when someone receives care from an out-of-network providers, as you did. The insurer may send the check – or checks – directly to you, the health plan member, leaving it to you to pay the provider who delivered the care. According to insurance industry experts I spoke with, from the insurer’s perspective, that approach is sensible since they don’t have a contractual relationship with the out-of-network provider. Unfortunately that may mean that you – the health plan member – are responsible for repaying any amounts that the insurer sent you and later determines that it overpaid, even if you sent that money directly to the provider, perhaps without even cashing the check. If you want that money back to repay the insurer, you may have to go looking for it from the provider.
Michelle Andrews answers a reader question about keeping your children on your health plan until they turn 26, even if they were recently released from jail.
QUESTION: My son was taken off our policy at age 18 because he was in jail. Now, he is at home and our insurer says he cannot be added to our coverage because it was a "one-time deal." Under the ACA, is this true? -- Linda
MICHELLE ANDREWS: No, it's not true. Your son can be added to your policy again and remain on it until he turns 26, unless he has an offer of health insurance coverage through his own job. In that case, he might have to take that coverage instead. But in most cases, young adult children can stay on their parents' plan. Generally, health plans provide an open enrollment period every year when people can change their coverage or add dependents to their plan, and you should be able to do the same.
Michelle Andrews answers a reader question about keeping your children on your health plan until they turn 26, even if they move away.
ANDREWS: You're right. Even if an adult child no longer lives nearby, in most instances the health reform law allows him to stay on your health plan until he turns 26. As a practical matter, though, he may run into difficulties. Even though he has insurance he may have a hard time finding providers that are in your health plan's network if he lives out of state. In that case he -- or you -- could wind up paying a lot more for him to use out-of-network doctors. Some adult children sidestep the problem by waiting to go to the doctor until they come back home to visit mom and dad. Maybe that will work for your son. But children who have chronic health conditions may have a tougher time delaying medical care. In those cases, you may want to explore other options, like state-based plans that guarantee coverage for people with pre-existing conditions.
Michelle Andrews answers a reader's question about whether retiree health plans must comply with new rules under the ACA.
ANDREWS: The new company may be correct. Health insurance plans that cover only retirees generally don't have to abide by the provisions of the Affordable Care Act. I've seen this issue come up with older parents who have adult children. Under the health care overhaul, health plans have to allow adult children to remain on their parents' health insurance plans until the reach age 26 in most instances. But if the parents are retired and covered by a retiree-only plan, those health reform provisions don't apply. Experts I asked say the rationale may have been a concern by those drafting the law that if they made retiree-only plans subject to it, employers would discontinue coverage. If the plan you're in contains both active and retired workers, I'm told it would be subject to the law. It's worth double-checking with the company to make sure that's not the case.
Topics: Insuring Your Health, Insurance, Health Costs
Michelle Andrews answers a reader's question about employers who charge a different premium to cover a spouse who has coverage available through his or her own job.
Topics: Insuring Your Health, Medicare, Delivery of Care
Consumer columnist Michelle Andrews answers a reader question about what triggers Medicare's penalties for hospitals who readmit patients too frequently.
Topics: Insurance, Health Reform
Consumer columnist Michelle Andrews answers a reader question about under-26 insurance coverage for newlyweds.
Topics: Insurance, Women's Health, Health Reform
Consumer columnist Michelle Andrews answers a reader's question about the health law’s provision on no-cost birth control.
>> Watch Andrews answer more of your health insurance questions.
>> Read "Insuring Your Health" - a collection of Andrews' consumer columns
Q. Is it true that all birth control should now be provided free of cost to all women? I thought this provision of the ACA had gone into effect months ago. I know some women who are still being charged. -- Marilyn
A. Under the health care overhaul's expansion of preventive coverage, women may be eligible to receive free contraceptive services, including all FDA-approved methods of birth control. But there are some exceptions: The provisions apply to new private health plans; plans that have "grandfathered" status under the law don't have to comply with the new rules. As time passes, more plans are losing their "grandfathered" status, but a significant proportion are still exempt from the requirement. In addition, health plans sponsored by certain nonprofit religious employers like churches, synagogues and other houses of worship -- are completely exempt from the requirement. And some religiously affiliated institutions like faith-based hospitals and universities aren't subject to the new rules until August 2013. By that time, the Department of Health and Human Services will have come up with new rules to enable employees of those institutions to have access to free contraception through their insurers.
Consumer columnist Michelle Andrews answers a reader question about how expectant parents can figure out which of their health insurance plans will best cover their child.
Topics: Insurance, Mental Health
Topics: Insurance, Health Costs, Hospitals
Consumer columnist Michelle Andrews answers a reader question about handling an out-of-network bill from a provider the patient didn't choose.
Topics: Health Costs, Insurance, Health Reform
Topics: Insurance, Health Costs, Medicare
Michelle Andrews answers a question about an unexpected bill a reader received after paying out-of-pocket for medical services not covered by Medicare.
Michelle Andrews answers a reader question about the obligations of insurers -- and parents -- under the 2010 health law.
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