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Eligibility, opt-out, mandates and cost: Misconceptions remain about buying insurance at healthcare.gov

By Jeremy Milarsky
Primaris, Navigator Program Manager

In 2013, the American healthcare system changed radically. People who had no access to health insurance before – entrepeneurs, people in the service industry, young people just starting their careers –can now find affordable plans via the Health Insurance Marketplace.
The Marketplace is a government-based platform where people can buy private insurance plans, often with financial assistance. It is primarily a Web-based system – one that was extremely challenged at the time of its launch. It is better now. But there are aspects of the Web site, and the system it serves, that tend to confuse people.

Thousands of Missourians don’t realize their choice is an economic one.

In the Marketplace, financial assistance is calculated based on household income and the market price of plans available. The system is designed to make it so the average plan (in terms of coverage) available to them doesn’t cost more than a percentage of their income.
Since some plans cover less than this average, many (four in 10) uninsured people in Missouri have access to at least one plan with a monthly premium of $0. People in that situation have a choice between low-cost insurance, or a tax penalty and no insurance.
It’s worth looking at your numbers.

Your Eligibility Determination letter tells you whether you can get financial help or not (but sometimes isn’t entirely clear).

Once the healthcare.gov has verified your identity, it asks for your family and income information. Basically, it is asking you to make an educated guess on what your household income will be in 2014. Eligibility is specifically based on modified adjusted gross income. In most cases, this is the amount earned from a job before taxes, investment income and most Social Security income. An excellent guide to figuring out modified adjusted gross income is here.
The system compares this income amount to the federal poverty level for your family size. “Family size” is defined by the number of people in the tax household – one (if you file as a single person) or two (if you are married filing jointly), plus any dependents you plan to claim for your 2014 tax return.
Unfortunately, the eligibility determination letter – a 12 -13 page file that pops up when you click “View Eligibility” on healthcare.gov after finishing the income questions – may not explicitly tell people they are denied financial help. It seems to do so for people using the Web site recently, but in the days after open-enrollment began, it simply stated, “Eligible to purchase plans through the Marketplace.”
Since the letter may not explicitly mention the person is ineligible for help, some people proceed to the part of the application where individual plans are shown with their full, unsubsidized prices. Since, without financial help, the average plan on the Marketplace for a 27-year-old person is $259 a month, which can cause sticker shock.
An important thing to remember: if you have reason to feel the eligibility letter is wrong, you can remove your application and reapply, or failing that, file an appeal. Navigators and certified counselors can help with both.

The mandate only applies to people who can afford health insurance and opt out anyway.

Eligibility letters sometimes do not tell people whether they are immune from the mandate to have insurance in 2014 (again, this is improving – some of the recent letters we’ve seen do this). This is a big misconception – the Affordable Care Act only requires people to buy insurance if they have access to a plan that costs eight percent or less than their household income.
Therefore, people who fall into the Medicaid gap are not required to buy insurance. Also, people who are affected by the so-called family glitch – someone in their household has access to affordable job coverage that is offered to family members (but at a much higher rate) – are usually immune to the mandate.

For those who do opt out, the penalty is fairly small.

Recently, a client reported hearing that the fine for not having insurance in 2014 was $2,400. In reality, it is far less than that this year. Also, the fine is only for people who have access to affordable coverage and decline it.
The fine is the larger of the following:
1) $95 per adult, $47.50 per child, for a maximum of $285 per household, or
2) 1 percent of household taxable income above the filing threshold. You have to make more than $48,000 to be in the second category.
Assuming you file jointly with a spouse, you would have to have a household income of $260,000 ($240k + $20k filing threshold) for your penalty to be $2,400.

Most children in Missouri are eligible for the Children’s Health Insurance Program, and their parents don’t know it.

Before the Affordable Care Act, most health insurance coverage came from a job, Medicare (insurance for seniors), Medicaid (insurance for the disabled, and families with very low income), veteran’s benefits, or CHIP (insurance for children). Others received insurance from the private market, where prices and coverage varied widely.
The ACA is designed to help people in the private market. People who apply for help in the new Marketplace are asked a slate of questions designed to ensure they are not eligible for those more traditional forms of insurance. For instance, someone eligible for Medicaid cannot receive help paying for a Marketplace plan unless they somehow become ineligible for Medicaid.
While Medicaid in Missouri tends to be fairly restrictive – working, childless adults who are not disabled do not qualify – the CHIP program has broad eligibility rules. Under the S-CHIP program (a subset of the CHIP program, in which families pay a monthly premium for coverage), a family can earn up to three times the poverty level – about $70,000 a year for a family of four – and their children would be eligible.
In Missouri, all three of these programs – Medicaid, CHIP and S-CHIP – are called MoHealthNet. Under the S-CHIP program, parents may need to pay monthly premium for their children’s insurance. All programs allow for a free annual health checkup and dental care for children.
Ideally, healthcare.gov should automatically send an application to the Missouri Department of Social Services on behalf of your child, but it is not clear how often this is happening. Missouri has made an online application available for these programs here. Navigators and certified counselors can help with this application. It is “one more thing to do,” but it does make coverage available for children.
Navigators and certified counselors can help people understand the nuances of the Marketplace application and healthcare.gov. We also can tell you where you stand in terms of financial assistance. Visit primaris.org/counseling or your local non-profit counseling organization for an appointment.

Primaris is a non-profit insurance-counseling organization in Columbia.

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