Obamacare Q&A, Part 2: Avoiding penalties, getting laid off, and taking free coverage

This week’s reader questions on federal health reform address penalties for not having insurance, what kind of coverage will keep you from getting penalized, what options a person will have after losing a job, and the cost of buying insurance through the state’s new marketplace.

In addition, we’re re-running an updated version of an item about health savings accounts from last week. Some of the information previously provided by sources was inaccurate.

To see last week’s Q&A, which included questions about what insurance would cost, which doctors will take the new insurance being offered, and whether dental care is covered, click here.

If you have a question about Obamacare that you’d like us to try to tackle, email Mirror Health Reporter Arielle Levin Becker at alevinbecker@ctmirror.org.

 

Denied coverage in the past. Will they be penalized?

My parents do not have health insurance now. They have tried to get insurance in the past few years and have been denied. In 2014, if they don’t have health insurance, will the state have to give it to them under Obamacare? I don’t find it fair to be charged a penalty for not having health insurance if everyone denies you.

Some things are changing in 2014 that will help your parents get insurance and avoid having to pay a penalty for being uninsured.

The state won’t be required to give them insurance (unless they earn below a certain income level, in which case they’d qualify for Medicaid). But they’ll have new options for buying private insurance.

First of all, insurance companies won’t be allowed to deny people coverage based on their medical histories, or to charge them more because they’ve had medical issues in the past. So even if they’ve been unable to buy insurance in the past, it should be possible for them to do so starting in January.

Depending on their income, they might have additional new options.

If they earn below $21,403, as a family of two, they would qualify for Medicaid beginning in 2014.

If they earn too much for Medicaid but below $62,040, as a family of two, they would qualify for a discount on their premiums if they buy insurance through Access Health CT, the new marketplace for private insurance created by Obamacare.

 

Do I need more coverage?

I have a major medical policy now. Will I need to buy additional coverage in 2014 to avoid paying a penalty?

If you buy health insurance on your own, any plan you buy or renew after Jan. 1, 2014, will be enough to keep you from having to pay a penalty under the federal health reform law.

The law sets several new standards for insurance coverage, including prohibiting them from limiting the dollar value of coverage you receive in a lifetime and requiring that they cover at least 60 percent of customers’ medical costs. As of 2014, there will also be limits on what people have to pay out-of-pocket for deductibles, copays and coinsurance ($6,350 for an individual, and $12,700 for a family plan).

Any new insurance plan sold to individuals beginning Jan. 1, 2014, must meet those and other requirements set out in the health reform law.

The plan you have right now might not meet those requirements, but you might still be able to renew it next year if it’s what’s known as grandfathered. That means the plan existed before the health law passed in 2010 and has not changed significantly. People who have grandfathered plans can keep them as long as the insurer is still offering them, and will not face a penalty. Grandfathered plans can’t be sold to new members, though, so if you give up a grandfathered plan, you won’t be able to buy another one.

The bottom line: If you buy or renew a plan through the state’s individual market in 2014, you won’t have to pay a penalty.

 

What if I lose my job?

My company (which provides my insurance) is laying off people. If that were to happen to me, what would I have to do to have insurance again and not get penalized?

If you have a brief gap in coverage -- up to three months during a year -- you won’t face a penalty for being uninsured.

As for how to get insurance, you’d have a few options.

As is the case now, you’d be eligible to keep your current insurance through COBRA, but it would probably be fairly costly.

Your other options will depend on your income. If it’s low enough, you’d qualify for Medicaid. The income limit depends on your family size and whether you have minor children. If you have minor children, the limit is 185 percent of the poverty level, which won’t change under Obamacare. If you don’t have minor children, the limit, as of Jan. 1, will be 138 percent of the poverty level. That’s an increase from the current level.

If your income is too high to qualify for Medicaid, you might qualify for a discount on your premiums if you buy coverage through Access Health CT, the state’s health insurance exchange. You can see if you’d qualify for a discount by using this calculator.

You could also buy insurance through the state’s existing individual market, but you wouldn’t be able to get any discounts on coverage that way.

 

Free insurance! Is it worth it?

I’m 63, single, and make about $31,200 a year in Fairfield County. What would it cost to buy insurance?

Your age and county mean you’ll face among the highest prices for insurance in the state. But your income is low enough that, if you buy coverage through Access Health CT, you’ll qualify for a discount.

In fact, including the discount, you could actually get one type of plan for free.

Since you earn under 400 percent of the poverty level, the federal health law says you won’t have to pay more than a certain percentage of your income to buy a particular health plan. In your case, your costs would be capped at 8.67 percent of income. That’s about $225 per month.

But it’s a little more complicated than that. That number represents what you’d have to pay to buy the second-cheapest silver tier plan sold by Access Health. Based on your age and county, that plan would cost $971 per month. (You can see the full list of plans and costs here.)

If you buy that plan and pay $225 per month, the federal government will pay the other $746. You’re free to buy any of the other plans sold through Access Health, but whatever you choose, the federal government will pay the same amount -- $746 (the difference between the cost of the second-cheapest silver plan and your maximum cost for buying it).

There are three types of coverage -- bronze, silver and gold. Bronze plans have the highest out-of-pocket costs. The silver plans cover more, so you'd have to pay less when getting care. The gold plans have the lowest out-of-pocket costs.

After factoring in your $746 discount, your monthly premium costs would be about:

Bronze: $0 to $51

Silver: $138 to $261

Gold: $269 to $380

As you can see, buying the cheapest bronze plan would actually leave you with nothing to pay in premiums because the plan’s cost, $705 per month, is less than your discount.

But it’s important to also look at what the different plans cover. Bronze plans have a $3,250 deductible, so you’d have to spend that much before the plan begins paying for medical care (with the exception of certain preventive services). After you hit the deductible, you’d have to pay 40 percent of the cost of many services.

By contrast, silver plans have a $3,000 deductible and a separate $400 deductible for prescription drugs. But the deductible applies to fewer services, and once you reach it, you’d have fixed copays, rather than having to pay a certain percentage of your medical costs.

The gold plans cost the most, but cover the  most: The deductible is $1,000, and once you hit it you’d have fixed copays, rather than having to pay a certain percentage of the total cost of care.

You can compare the plan designs here.

What’s the best for you? It depends on many factors, including how much medical care you’ll need and how much risk you’re willing to take on. But it’s worth taking into account both the premium costs and the out-of-pocket costs you’ll face if you buy the plan.

 

Help me find the exchange

How do you get to the exchange?

You can go online to www.accesshealthct.com. You can also speak to a representative by phone at 1-855-805-4325. Starting on Oct. 1, you’ll be able to sign up for insurance using either method.

 

Health savings accounts

According to the Congressional Research Service, people can contribute to health savings accounts if they are enrolled in health plans that meet two criteria. First, the plan must have a deductible above a certain minimum level. In 2014, that level requires an annual deductible of at least $1,250 for individual coverage or $2,500 for family coverage. The second requirement is that members’ out-of-pocket costs can’t exceed $6,350 for an individual or $12,700 for family coverage.

The health reform law doesn’t prohibit insurers from offering high-deductible plans with health savings accounts, as long as they meet the requirements listed above.

 

For a full list of Obamacare resources from The Connecticut Mirror, click here.

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