Here’s something you probably never thought you’d hear: Health insurance is about to get interesting.
New discounts. New benefits. New rules.
And a new place to buy.
Come Oct. 1, people can start signing up for health insurance in the new Affordable Care Act marketplace, or exchange. All individuals, families and small businesses can use it, some getting money to do so.
So, are you ready to buy? Maybe? You’re not really sure?
Here’s what you need to know.
Here’s your deadline
The ACA health insurance mandate starts Jan. 1, 2014, requiring almost all Americans to have health insurance or pay a penalty. There’s a three-month grace period before the penalty kicks in, however, so if you don’t have insurance right on Jan. 1, you’re OK. But don’t be an April fool.
People who are very poor (those under the federal poverty level) and who live in a state that didn’t expand Medicaid (like Maine) are exempt from the penalty. You can also get an exemption if:
— Your religion prevents you from accepting insurance benefits.
— You’re part of a health care sharing ministry.
— You are a member of a federally recognized Indian tribe.
— You lack insurance for less than three months in a row.
— You have suffered a certified hardship.
— You can’t afford coverage because you’d have to pay more than 8 percent of your household income for it.
— You’re behind bars.
— You are not a U.S. citizen, a U.S. national or an alien lawfully present in the U.S.
If you have affordable insurance through your employer, you’re all set. Likewise if you get health care through the military, Veterans Affairs, Medicare, Medicaid or some other insurance program.
If you don’t have health insurance, the act wants you to get some. Like, soon.
Insurance can still be bought and sold the regular way, through agents. But starting Oct. 1, it will also be sold through the marketplace, a virtual shopping center where people and small businesses can compare prices and benefits. Think online shoe shopping — it’s all about what fits, what suits your needs and how much you can afford.
Although insurance can still be bought elsewhere, federal subsidies and tax breaks will only be available for insurance bought through the marketplace. (Except for catastrophic plans. No subsidy for those.)
Open enrollment will last from October 2013 to March 2014. In future years, it will run from October to January. You can buy individual health insurance only during this time unless you lose your job, get married, have a baby or something else big happens in your life. This is the new rule for insurance bought on or off the marketplace.
How to get started
So how do you buy insurance from the marketplace? Let us count the ways.
— You can sign up at Healthcare.gov, the official marketplace website. That site will also give the names of “navigators” and certified application counselors — federally designated helpers — who will be able to assist with paper applications.
— You can sign up through the marketplace hotline: 1-800-318-2596 for individuals or 1-800-706-7893 for small businesses.
— Specially trained insurance agents and brokers can sell insurance from the marketplace. Healthcare.gov should be able to provide the names of those people.
All of those options should be free to you. If someone wants to charge you for helping with an application or signing up for the marketplace, that’s a red flag for fraud. More on that later.
A look at the cost
Right now, two companies will likely sell to Mainers through the marketplace: Maine Community Health Options and Anthem Blue Cross and Blue Shield.
MCHO is a new nonprofit insurance co-op run by members for members. Anthem is the state’s largest health insurer, and it has partnered with MaineHealth, the state’s largest health care organization, to offer marketplace plans.
Their prices are based on where you live, how old you are and whether you want a catastrophic, basic (bronze), middle-of-the-road (silver) or high-end (gold) plan. Anthem’s prices also increase if you smoke.
In general, if you’re a twentysomething non-smoker in Southern Maine, you’ll pay the least. If you’re a retirement-age (but not quite Medicare-age) smoker in Northern Maine, you’ll pay the most.
— A 21-year-old nonsmoker from Cumberland County will pay $155 a month for Anthem’s limited-benefit, high-deductible catastrophic plan.
— A 30-year-old smoker from Oxford County will pay $234 a month for MCHO’s basic bronze plan.
— A 40-year-old nonsmoker from Androscoggin County will pay about $325 a month for MCHO’s middle-of-the-road silver plan.
— A 50-year-old smoker from Penobscot County will pay about $599 a month for MCHO’s high-end gold plan.
— A 60-year-old nonsmoker in Washington County will pay about $754 a month for Anthem’s gold plan through a small group, likely his employer.
But like anyone who’s ever used health insurance knows, you don’t just pay the monthly premium. There are also co-pays, deductibles and a host of other checks to write. That monthly price can be the least of your worries if you go to the doctor a lot or wind up in the hospital with third-degree burns after saving a house full of orphans and kittens from fire.
The federal government has designated official “navigators” to help people and small groups, well, navigate. In Maine, navigators will come from Western Maine Community Action and a partnership between the Maine Lobstermen’s Association and the Massachusetts-based Fishing Partnership Support Services.
Those navigators are getting trained now. Come Oct. 1, they’ll be able to explain the marketplace and differences between insurance plans. However, they won’t be allowed to recommend a plan or tell you which one you should chose.
Certified application counselors will also be available to help through various groups, likely community health centers, hospitals and social service agencies. Like navigators, they won’t be able to tell you which plan to choose.
So which plan will, ultimately, give you the best coverage for the lowest cost? Depends on your needs and how you’ll use your insurance. That’s something you’ll have to decide.
You may be eligible for a subsidy
If you’re concerned about cost (and, really, who isn’t?), the federal government may give you money to help pay for your health insurance. AKA, a subsidy.
If you need to buy your own insurance (because an affordable plan isn’t offered through your job) and you earn between 100 percent and 400 percent of the federal poverty level, you can get a subsidy as a tax credit or have it paid directly to the insurance company to lower your monthly premium.
Right now, poverty level is $11,490 a year for one person (modified adjusted gross income). For a family of four it’s $23,550.
Also, if you earn less than 250 percent of the poverty level, you can get a subsidy to cap your out-of-pocket expenses at a discounted rate. That means you’ll ultimately spend less when you see a doctor after saving those orphans and kittens.
How big are the subsidies? It’s a sliding scale, so it depends on your salary. But a family of four can earn up to $94,200 a year and still be within 400 percent of the federal poverty level. According to the Kaiser Family Foundation’s subsidy calculator, that family’s subsidy could be about $920 a year, or about 9 percent of the premium for the middle-of-the-road silver plan. (The subsidy is always based on the silver plan.)
That family could earn up to $58,875 a year and still be within 250 percent of the federal poverty level. According to the subsidy calculator, that could entitle them to an out-of-pocket expenses cap of $12,700 a year.
Keep in mind . . .
— Anthem’s Southern and Central Maine plans are HMOs that have a narrow network. That means you can’t go to any doctor or hospital you want and expect insurance to pay for it. That has been controversial.
— When you apply for insurance on the marketplace, you will automatically be considered for Medicaid. If it turns out you’re eligible, you will be signed up for that instead.
— Catastrophic plans, which are available only for people under 30, aren’t eligible for subsidies. It might be cheaper to use a subsidy to buy a more comprehensive plan with a higher regular sticker price.
— Beware of fraud. Red flags: Someone who wants to sign you up for marketplace insurance before Oct. 1; someone who wants to charge for helping with an application or getting you insurance from the marketplace; or someone who calls, asks for your personal information and says it’s for the marketplace or part of new regulations. (Community groups may ask current clients about their health insurance status and ask for permission to contact them about the marketplace after it opens. That’s OK.)
Never give out personal information to a caller. Don’t pay anyone to sign you up for the marketplace. If you want local, in-person help, look for the list of navigators and certified application counselors at Healthcare.gov and other official resources at www.enroll207.org in the coming weeks.
So what happens if I don’t get insurance?
Unless you apply for and get an exemption, you’ll have to pay a penalty.
For 2014, that penalty will be 1 percent of family income or $95 per adult and $47.50 per child (up to $285 per family), whichever is more. In 2015 the penalty jumps to 2 percent of income or $325 per adult and $162.50 per child (up to $975 per family), whichever is more. And in 2016 the penalty will be 2.5 percent of income or $695 per adult and $347.50 per child (up to $2,085), whichever is more.
The IRS is in charge of that.