Affordable Care Act insurance exchange to open in October
ARENAC COUNTY — Uninsured citizens across the state of Michigan will have the opportunity to start purchasing insurance policies through health care exchanges Oct. 1.
Don Hazaert, executive director with Michigan Consumers for Health Care, said the exchange is being created under the Affordable Care Act.
“It forces insurance companies to compete with each other in a transparent way, as it would compare all the prices for the same plan,” Hazaert said. “It’s comparable to using a travel website like Travelocity — you can compare all the coach tickets or first class tickets to one another.”
While the Michigan legislature refused to set up its own exchange, the federal government will step in to do it, he said. Hazaert added the states that have set up their own exchanges are already getting data for next year’s insurance prices compared to the ones current insurance holders are paying, and they have seen significant drops due to the added pricing transparency.
“California’s rates are down 29 percent for similar coverage,” he said. “Oregon is down 35 percent, and New York just released their rates, and those are down 50 percent on average.”
Since Michigan’s own insurance rates have increased 15 times faster than household incomes, Hazaert said the exchange should hopefully help bring costs back down.
He said once the exchange website goes live in October, Michigan’s residents will be able to use it to compare rates between these companies for similar plans. To do that, they must first enter income data to help the site determine whether or not they qualify for Medicaid or tax credits to help reduce the cost of insurance.
Hazaert said those tax credits would be automatically applied to the prices listed on the website immediately and would be factored into the price people would pay, adding that if people needed to wait for a tax refund once a year, the system would not be particularly helpful. He said tax credits are available to people who make as much as 400 percent above the poverty line — roughly $44,680 a year for individuals, or $92,200 for a family of four.
From there, Hazaert said they will have the option to choose what sort of plan they want and the amount they will pay for premiums. Whatever the person does not pay in premiums will be picked up by the insurance company.
“There will be four levels of coverage. The plans will all be similar but the plans are based on what percent you want to pick up,” he said. “So if you want a bronze level plan, you would pick up 40 percent. A silver level plan is 30 percent, a gold plan is 20 percent, and with platinum you’re only picking up 10 percent of the out of pocket cost. So the level is how much you want to pick up for a doctor visit or for a particular procedure.”
If the Michigan Senate approves a House bill to expand Medicaid in the state of Michigan, people with yearly incomes as high as 133 percent above the federal poverty line — $14,856 a year for individuals or $30,675 for a family of four — would be eligible for the program. Hazaert said under the ACA, physicians are now paid the same for Medicaid patients as they are for Medicare patients, making it easier for people to find doctors who will accept them as patients. Gov. Rick Snyder has already spoken out in his support of Medicaid expansion.
The ACA also made some preventative procedures, such as a yearly physical, 100-percent covered by insurance companies in a bid to encourage people to be proactive about their health, Hazaert said.
“We want to be preventative,” Hazaert said. “We want people to see doctors, identify problems early, and treat them much more cheaply, so the idea is to make a lot of preventative procedures much more affordable.”
For example, he said a senior on Medicare can get a free wellness visit with a physician and get a preventative plan set up at no cost.
A similar insurance exchange will be open to small businesses in 2014, Hazaert said. While no business with less than 50 employees will be required to purchase insurance for their staff, the federal government will be providing them tax credits to help make it more affordable. He said the federal government currently picks up 35 percent of the cost, and that amount will increase to 50 percent for small businesses next year.
The enrollment period for people will be between Oct. 1, 2013, and March 31, 2014. Hazaert said if people do not enroll in an insurance program in that time period, they will have to wait until the following enrollment period — Oct. 1, 2014 until March 31, 2015 — to sign up. Plans signed up for through the exchange will not go into effect until Jan. 1, 2014, he said.
Other changes to the U.S. health system under the ACA that have already gone into effect will continue to function. The Department of Health and Human Services notes people with pre-existing conditions cannot be denied insurance, nor can insurance drop coverage due to an honest mistake. In 2014, the HHS reports that insurance companies will not be able to charge people with pre-existing conditions more money for insurance, or limit the dollars for coverage a person receives.
According to healthcare.gov, people who go uninsured in 2014 will have to pay a penalty of $95 per person or 1 percent of their yearly income, whichever is higher. The fee for an uninsured child is $47.50, with an upper limit of $285 per family.
The penalty fee will be waived if someone is uninsured for less than three months of the year, are determined to have a very low income and cannot afford coverage, is not required to file a tax return due to having a low income, would qualify for the new Medicaid income limits but cannot get coverage because Michigan did not expand the program, is a member of a federally recognized Indian tribe, or are a member of a religious sect that has religious objections to health insurance. These exemptions can be requested at the insurance exchange website once it goes live.
Michigan’s health care exchange will be reachable through healthcare.gov on Oct. 1. More information can be found at that website.