WASHINGTON -- Buying your own health insurance will never be the same.
This fall, new insurance markets called exchanges will open in each
state, marking the long-awaited and much-debated debut of President
Barack Obama's health care overhaul.
The goal is quality coverage for millions of uninsured people in the
United States. What the reality will look like is anybody's guess --
from bureaucracy, confusion and indifference to seamless service and
satisfied customers.
Exchanges will offer individuals and their families a choice of private
health plans resembling what workers at major companies already get. The
government will help many middle-class households pay their premiums,
while low-income people will be referred to safety-net programs they
might qualify for.
Most people will go online to pick a plan when open enrollment starts
Oct. 1. Counselors will be available at call centers and in local
communities, too. Some areas will get a storefront operation or kiosks
at the mall. Translation to Spanish and other languages will be
provided.
When you pick a plan, you'll no longer have to worry about getting
turned down or charged more because of a medical problem. If you're a
woman, you can't be charged a higher premium because of gender.
Middle-aged people and those nearing retirement will get a price break:
They can't be charged more than three times what younger customers pay,
compared with six times or seven times today.
If all this sounds too good to be true, remember that nothing in life is free and change isn't easy.
Starting Jan. 1, 2014, when coverage takes effect in the exchanges,
virtually everyone in the country will be required by law to have health
insurance or face fines. The mandate is meant to get everybody paying
into the insurance pool.
Obama's law is called the Affordable Care Act, but some people in the
new markets might experience sticker shock over their premiums. Smokers
will pay a financial penalty. Younger, well-to-do people who haven't
seen the need for health insurance may not be eligible for income-based
assistance with their premiums.
Many people, even if they get government help, will find that health
insurance still doesn't come cheaply. Monthly premiums will be less than
the mortgage or rent, but maybe more than a car loan. The coverage,
however, will be more robust than most individual plans currently sold.
Consider a hypothetical family of four making $60,000 and headed by a
40-year-old. They'll be eligible for a government tax credit of $7,193
toward their annual premium of $12,130. But they'd still have to pay
$4,937, about 8 percent of their income, or about $410 a month.
A lower-income family would get a better deal from the government's sliding-scale subsidies.
Consider a similar four-person family making $35,000. They'd get a
$10,742 tax credit toward the $12,130 annual premium. They'd have to pay
$1,388, about 4 percent of their income, or about $115 a month.
The figures come from the nonpartisan
Kaiser Family Foundation's online Health Reform Subsidy Calculator.
But while the government assistance is called a tax credit and computed
through the income tax system, the money doesn't come to you in a
refund. It goes directly to insurers.
Obama's law is the biggest thing that's happened to health care since
Medicare and Medicaid in the 1960s. But with open enrollment for
exchange plans less than 10 months away, there's a dearth of consumer
information. It's as if the consumer angle got drowned out by the
political world's dispute over "Obamacare," the dismissive label coined
by Republican foes.
Yet exchanges are coming to every state, even those led by staunch GOP
opponents of the overhaul, such as Govs. Rick Perry of Texas and Nikki
Haley of South Carolina. In their states and close to 20 others that are
objecting, the exchanges will be operated by the federal government,
over state opposition. Health and Human Services Secretary Kathleen
Sebelius has pledged that every citizen will have access to an exchange
come next Jan. 1, and few doubt her word.
But what's starting to dawn on Obama administration officials,
activists, and important players in the health care industry is that the
lack of consumer involvement, unless reversed, could turn the big
health care launch into a dud. What if Obama cut the ribbon and nobody
cared?
"The people who stand to benefit the most are the least aware of the
changes that are coming," said Rachel Klein, executive director of
Enroll America, a nonprofit that's trying to generate consumer
enthusiasm.
"My biggest fear is that we get to Oct. 1 and people haven't heard there
is help coming, and they won't benefit from it as soon as they can,"
she added. "I think it is a realistic fear."
Even the term "exchange" could be a stumbling block. It was invented by
policy nerds. Although the law calls them "American Health Benefit
Exchanges," Sebelius is starting to use the term "marketplaces" instead.
Polls underscore the concerns. A national survey last October found that
only 37 percent of the uninsured said they would personally be better
off because of the health care law. Twenty-three percent said they would
be worse off in the Kaiser poll, while 31 percent said it would make no
difference to them.
Insurers, hospitals, drug companies and other businesses that stand to
benefit from the hundreds of billions of dollars the government will
pump in to subsidize coverage aren't waiting for Washington to educate
the public.
Blue Cross and Blue Shield plans, for example, are trying to carve out a
new role for themselves as explainers of the exchanges. Somewhere
around 12 million people now purchase coverage individually, but the
size of the market could double or triple with the new approach, and
taxpayers will underwrite it.
"Consumers are expecting their health insurance provider to be a helpful
navigator to them," said Maureen Sullivan, a senior vice president for
the Blues' national association. "We see 2013 as a huge year for
education."
One goal is to help consumers master the "metals," the four levels of
coverage that will be available through exchange plans: bronze, silver,
gold, and platinum.
Blue Cross is also working with tax preparer H&R Block, which is
offering its customers a health insurance checkup at no additional
charge this tax season. Returns filed this year for 2012 will be used by
the government to help determine premium subsidies for 2014.
"This tax season is one of historical significance," said Meg Sutton,
senior advisor for tax and health care at H&R Block. "The tax return
you are filing is going to be key to determining your health care
benefits on the exchange."
Only one state, Massachusetts, now has an exchange resembling what the
administration wants to see around the country. After six years in
business, the Health Connector enrolls about 240,000 Massachusetts
residents. It was created under the health overhaul plan passed by
Republican former Gov. Mitt Romney and has gotten generally positive
reviews.
Connector customer Robert Schultz is a Boston area startup business
consultant who got his MBA in 2008, when the economy was tanking. Yet he
was able to find coverage when he graduated and hang on to his
insurance through job changes since. Schultz says that's freed him to
pursue his ambition of becoming a successful entrepreneur -- a job
creator instead of an employee.
"It's being portrayed by opponents as being socialistic," Schultz said.
"It is only socialistic in the sense of making sure that everybody in
society is covered, because the cost of making sure everybody is covered
in advance is much less than the cost of putting out fires."
The Connector's executive director, Glen Shor, said his state has proven
the concept works and he's confident other states can succeed on their
own terms.
"There is no backing away from all the challenges associated with
expanding coverage," Shor said. "We are proud in Massachusetts that we
overcame what had been years of policy paralysis."
source: dailyfinance.com
