Plan options for islanders
On Thursday Sept. 26, Mark Hayward of the Small Business Administration (SBA), along with R.I. Lieutenant Governor Elizabeth Roberts and representatives from HealthSource RI, hosted a seminar on the Affordable Care Act that is slated to go into effect on Jan. 1, 2014.
The purpose of the session, which was held at New Shoreham Town Hall, was to present the opening of Rhode Island’s healthcare exchange program, an important mandate of the act that is intended to give individuals and small businesses more choices in selecting and purchasing healthcare insurance in their individual states. According to Roberts, Rhode Island is one of only three states that are fully ready to implement its exchange. Rhode Island started planning for its exchange soon after the Affordable Health Care was enacted in 2010.
Starting on Oct. 1, the healthcare exchange became fully active, opening the window that allows Rhode Islanders to sign up for the healthcare plan of their choice. The insurance will come into effect on Jan. 1, and people must sign up at least two weeks before their plan would start. Twelve insurance plans will be available to individuals, including 10 plans from Blue Cross Blue Shield and two from the Neighborhood Health Plan of Rhode Island. Businesses may choose from 16 plans with nine from Blue Cross, two from Neighborhood Health and an additional five from United Health Care.
The plans are rated from bronze to platinum according to their levels of coverage. An individual looking for higher levels of coverage may opt for a gold plan, (platinum plans are only available to employers) whereas an individual looking for “catastrophic” coverage only may opt for the lower cost/higher deductible bronze plans.
An important change for employees of small businesses is that each individual may select his or her own insurance plan and, even though an employer may have workers in several plans, he will only receive one bill per month from the exchange. Self-employed individuals may sign up for an employer plan, but only for two years. After that, they must switch to an individual plan.
Another significant change is that premiums are dependent on the age of the insured. For instance, those under 21 may obtain coverage in a gold plan for about $175 per month, or the catastrophic plan for only $95. At the highest end of the scale, those over 64 may pay from $784 to $847 for a gold plan, but $450 per month for the catastrophic plan. Instead of an overall price of say $1,500 per month for family benefits (the approximate monthly rate of the Town of New Shoreham’s health care coverage) a family will pay as if getting individual plans at varying rates, depending on each member’s age and need.
Although those rates may still seem high, many individuals may qualify for a premium tax credit depending on their income, and many may be eligible for free insurance under an expansion of Medicaid (called Rite-Care in Rhode Island). For those whose incomes are less than 139 percent of the Federal Poverty Level (FPL), coverage will be free.
It is important to note that only those purchasing coverage under the exchange will qualify for the credit. Additionally, unlike other tax credits, the credit will be calculated and applied at the time of purchase, reducing the cost of the premium itself. Families with incomes up to 400 percent of the FPL are eligible for the credit. The credit operates on a sliding scale, and though it is quite complex to figure out the credit, there is a calculator on the HealthSource RI website that will perform the calculations for you.
For a household of one, the 2013 FPL is an annual income of $11,490, so individuals with incomes up to $45,960 will be eligible. The FPL for a family of four is $23,550, so they may qualify for the credit with an income up to $94,200. The exchange will verify your income based on the last tax return filed with the Internal Revenue Service.
Although the healthcare exchange primarily operates on-line, (www.healthsourceri.com) Roberts stressed that there would be plenty of assistance available by phone and in person. And by phone, she meant by “real people.” You may choose to work with the same person each time you call; and even if you haven’t, they will keep records of the conversation so you “don’t have to repeat your situation again and again,” said Roberts.
Assistance will be regularly available in Spanish and Portuguese and, if other languages are needed, they will arrange for translators. The call center will be open from 8 a.m. to 9 p.m. Mondays through Saturdays and from noon to 6 p.m. on Sundays. Both Roberts and Hayworth strongly encouraged those with questions to call the center. They said that the feedback they will receive from the types of questions asked will help them in improving the system. “It’s a moving target — we’re all learning at the same time,” said Hayward. The phone number for the call center is (855) 840-4774.
Once an individual selects an initial plan, they will not be able to change plans until the anniversary of their enrollment, unless they have a “life altering event” such as the loss of a job. However, since the plan doesn’t go into effect until January 1, consumers have until December 14 to change their minds as many times as they want.
One audience member raised questions concerning what would happen if a business currently operating under a small group plan wished to change to plans under the exchange, but currently had a plan anniversary other than Jan. 1. Roberts replied that any existing group plan could be cancelled with 30 days notice to the company. When the questioner asked if that “would upset Blue Cross,” Roberts replied: “Why would you care?” Typically small group plans are charged more than larger groups due to their lack of leverage in negotiating with insurance companies. Roberts explained that HealthSource RI, with (presumably) high numbers of enrollees, would have the necessary leverage to keep premiums down.
Others had questions regarding how to determine the number of full-time employees a particular company has, especially given that many Block Island employees are seasonal. Roberts, who has been conducting these seminars in all of R.I.’s 39 cities and towns, said that this was a question that many of the coastal communities had brought up. Currently employees may have coverage through COBRA for up to 18 months when they leave their employment. Under the exchange, however, that former employee may obtain coverage at significantly lower rates, especially if they will meet the income levels for eligibility for either free or reduced premiums through the credit.
Another audience member asked about coverage for adult children who are currently allowed to stay on their parents’ health plans up to the age of 26. Under the exchange, this option goes away unless the child can otherwise be claimed as a dependent on his or her parents’ tax return. Those who can’t may obtain their own coverage.
For those who choose not to be insured at all after Jan. 1, there will be a tax penalty. However, it’s actually not that onerous. The penalty will be the greater of $95 or one percent of one’s income.