Welcome to the first in a series of postings on the fast approaching implementation of the Affordable Care Act. We are only 3 ½ months away from the start of the enrollment period.
You are receiving this because you are either already a policyholder of our office who will be affected, or a person who has expressed an interest in receiving periodic updates on this subject.
Please feel free to share this with others who may be similarly affected, and while this information is geared towards folks in Clallam County we will be able to assist people throughout the entire State of Washington.
To say that things are changing daily is an understatement, as we frequently receive more than one update or point of clarification each day.
We receive information from a number of sources including direct from the Washington Office of the Insurance Commissioner, the insurance companies who will be participating, trade journals and yes even the newspapers.
This whole process is almost like rediscovering “the law of unintended consequences”, each and every day as this Associated Press article from the June 14th edition of the Peninsula Daily News will show.
Coverage may be unaffordable for low-wage workers
WASHINGTON (AP) — It’s called the Affordable Care Act, but President Barack Obama’s health care law may turn out to be unaffordable for many low-wage workers, including employees at big chain restaurants, retail stores and hotels.
That might seem strange since the law requires medium-sized and large employers to offer “affordable” coverage or face fines.
But what’s reasonable? Because of a wrinkle in the law, companies can meet their legal obligations by offering policies that would be too expensive for many low-wage workers. For the employee, it’s like a mirage — attractive but out of reach.
The company can get off the hook, say corporate consultants and policy experts, but the employee could still face a federal requirement to get health insurance.
Many are expected to remain uninsured, possibly risking fines. That’s due to another provision: the law says workers with an offer of “affordable” workplace coverage aren’t entitled to new tax credits for private insurance, which could be a better deal for those on the lower rungs of the middle class.
Some supporters of the law are disappointed. It smacks of today’s Catch-22 insurance rules.
“Some people may not gain the benefit of affordable employer coverage,” acknowledged Ron Pollack, president of Families USA, a liberal advocacy group leading efforts to get uninsured people signed up for coverage next year.
“It is an imperfection in the new law,” Pollack added. “The new law is a big step in the right direction, but it is not perfect, and it will require future improvements.”
Andy Stern, former president of the Service Employees International Union, the 2-million-member service-sector labor union, called the provision “an avoidance opportunity” for big business. SEIU provided grass-roots support during Obama’s long struggle to push the bill through Congress.
The law is complicated, but essentially companies with 50 or more full-time workers are required to offer coverage that meets certain basic standards and costs no more than 9.5 percent of an employee’s income. Failure to do so means fines for the employer. (Full-time work is defined as 30 or more hours a week, on average.)
But do the math from the worker’s side: For an employee making $21,000 a year, 9.5 percent of their income could mean premiums as high as $1,995 and the insurance would still be considered affordable.
Even a premium of $1,000 — close to the current average for employee-only coverage — could be unaffordable for someone stretching earnings in the low $20,000′s.
With such a small income, “there is just not any left over for health insurance,” said Shannon Demaree, head of actuarial services for the Lockton Benefit Group. “What the government is requiring employers to do isn’t really something their low-paid employees want.”
Based in Kansas City, Mo., Lockton is an insurance broker and benefits consultant that caters to many medium-sized businesses affected by the health care law. Actuaries like Demaree specialize in cost estimates.
Another thing to keep in mind: premiums wouldn’t be the only expense for employees. For a basic plan, they could also face an annual deductible amounting to $3,000 or so, before insurance starts paying.
“If you make $20,000, are you really going to buy that?” asked Tracy Watts, health care reform leader at Mercer, a major benefits consulting firm.
And low-wage workers making more than about $15,900 won’t be eligible for the law’s Medicaid expansion, shutting down another possibility for getting covered.
Now here is the basic background on the ACA and where we are today.
The following is a very brief primer on the Affordable Care Act (ACA) which will be accepting 2014 enrollments in less than four months’ time, on Oct. 1.
This is directed toward those who are not on Medicare and are covered by an individual health plan or currently do not have coverage.
All insurance companies wishing to offer plans under the ACA for 2014 had to file their plan details, including premiums, with the State Office of the Insurance Commissioner (OIC) by May 1.
The filings for 2014 are readily available for public review and comments on the OICwebsite at http://www.insurance.wa.gov.
I shall summarize my observations and also share with you some thoughts and opinions.
I had heard that some large out-of-state insurers were considering entering the state and offering health plans. Names that were thought to be considering such a move included Aetna, United HealthCare and Humana. Of the 14 plans that have filed for 2014 there was only one from a company not already offering individual health insurance in the state.
That company was called Coordinated Care Corporation, which is an HMO from the Midwest. Its plan has been “Not Approved” by the OIC. I heard secondhand that the OIC was not going to be approving any additional physician networks for 2014 and as the Coordinated Care plan was an HMO, it was a non-starter for 2014.
Of the 13 other companies that filed, offerings from Molina and Time Insurance (Assurant) have likewise been “Not Approved” by the OIC. I would think that these plans possibly could be amended and refiled if the carriers chose to do so.
The 11 other plans are offered by the following companies and their affiliates; Regence Blue Shield, Premera, Group Health Co-operative, Kaiser Foundation, Community Health and Time Insurance.
Health Insurance Exchanges
Before I expand on the carriers and their filed plans, I would like to take a moment to explain in very simple terms the concept of the Health Insurance Exchanges as envisioned by the government.
Insurance companies will be free to offer plans either within the Exchange or outside of the Exchange. However, and this point is very important, ONLY plans purchased through the Exchange will be eligible for subsidies or premium support if you qualify based upon income levels.
The Health Insurance Exchange will be an online marketplace where people can review plans benefits and premiums and then apply for coverage directly from the company on one central website.
The income levels to be eligible for premium subsidies are quite generously capped at 400 percent of the federal poverty level. This equates to $45,000 for a single person to over $94,000 for a family of four.
Needless to say, the lower your income level, the lower the premium you will have to pay.
The Washington Health Benefit Exchange website can be found at http://www.waplanfinder.org and it includes a great tool to help estimate premiums and subsidies. I would strongly urge everyone to take a few minutes to explore this site.
While it does not include plan details at this point as they have not yet been approved, it does provide a wealth of information. When the site is live with real information I shall keep you informed.
At this point my thought is that everyone should consider a plan through the Exchange if they would receive a subsidy and only look outside of the Exchange if they were not eligible for a subsidy.
Now back to plans filed but not yet approved by the OIC.
Regence BlueShield and affiliates have filed four plans. Regence BlueCross BlueShield of Oregon will offer plans in the Vancouver, Wash., area; Regence BlueShield or Asuris is available in most counties throughout the state. Bridgespan Health is a new Regence company and is the company through which all the Regence Exchange policies will be offered.
Regence announced that it only will be offering Exchange plans in six counties in Western Washington and one county in Eastern Washington. These are as follows: Skagit, Snohomish, King, Pierce, Thurston and Kitsap in Western Washington and Spokane County in Eastern Washington.
Group Health Co-operative only will be offering Exchange plans in the current counties where they offer their HMO plans and Clallam is not in that category. GHC’s reasoning for this was that in those areas it already had built a network of preferred providers and those counties accounted for 70 percent of its subscribers.
Kaiser Foundation only will be offering its plans in Southwest Washington from Vancouver up to the Kelso/Longview area.
Premera and Lifewise have filed for both Exchange plans and non-Exchange plans in all counties.
Community Health will be offering plans only within the Exchange, but its OIC filing did not include Clallam County as one of the counties it will serve.
Time Insurance has filed to only offer its individual products outside of the Exchange.
So, there you have it folks. In Clallam County we will have plans available from the Exchange and they will be offered by both Premera BlueCross and Lifewise. When I spoke with Premera officials, they told me plan benefits and premiums will be basically the same for both companies.
When I asked why they would use both companies, the answer I received was that many current clients are familiar with the name Lifewise, whereas non-clients probably would be more familiar with a Blue Cross-branded product.