Health Care Reform Update: How Will the Exchanges Affect Me?
JOURNAL: ISSUE 2 - 2013
State Decisions for Creating Health Insurance Exchanges, as of May 28, 2013
Source: Kaiser Family Foundation
How Will the Exchanges Affect Me?
The American Health Benefit Exchanges, now also called "Health Insurance Marketplaces", key components of the Patient Protection and Affordable Care Act (ACA), will offer initial open enrollment periods from October 1, 2013 through March 31, 2014 for coverage beginning as early as January 1, 2014. Although the Obama Administration recently announced it would delay ACA's requirement for employers to provide coverage until 2015, individuals are still required to have coverage or pay a penalty in 2014, and the Exchanges are expected to come online on time.
What are the Exchanges?
The Exchanges are "comparative shopping websites" managed by state and/or federal agencies. This is where individuals who don't have employer-provided coverage, or whose employer-provided coverage is unaffordable and/or does not meet "minimum value," can shop for and purchase health insurance with after-tax dollars. Some states (17 plus D.C.) are establishing state-based Exchanges, others (27 states) are defaulting to federally-funded Exchanges in which the Department of Health and Human Services (HHS) will perform all functions of the Exchange. The remaining seven states are partnering with the Federal government in Partnership Exchanges.
Eligibility to purchase coverage through an Exchange is limited to U.S. citizens and permanent residents who have been in status for at least five years. Those individuals who will not be eligible to purchase coverage in the Exchanges include veterans with VA benefits, undocumented workers, and individuals eligible for Medicaid benefits. Individuals and families with income up to 400% of the poverty line who do not have employer-provided coverage that is affordable and provides minimum value will be eligible for subsidies or tax credits towards the purchase of health insurance.
How much will insurance coverage cost?
The premiums charged by each Exchange will vary state by state. But they are all very different from private plans, such as Taft-Hartley Funds – health and welfare funds that are collectively bargained by unions and employers, in which most BAC members participate. More than 100 insurance companies have applied to sell their individual and small group products on the Exchanges. While the idea of competition is good, states that have begun publishing their premiums are getting a lot of attention for the high cost of their plans. For example, the rates California published a few weeks ago will increase the premiums of individual plans by as much as 146 %! On the other hand, the cost of insurance coverage through New York state's Exchange was projected to cost less than current averages.
The plans offered through the Exchanges typically cover medical, prescription drug and pediatric dentistry, do not include dental and vision programs, and can charge different premiums by age, geography and tobacco use. In contrast, BAC's Taft-Hartley funds share a set premium for all members enrolled in the plan, regardless of age, and generally include coverage for up to 85-90% of medical costs, including dental and vision – valuable benefits for members and their families.
Medicaid Expansion
In addition to the establishment of Exchanges, states were also given the opportunity to expand Medicaid for low income residents, which has been a divisive political decision. At present, 29 states favor expanding Medicaid; 20 states do not. Two are undecided. For states that do not expand Medicaid, it is clear that many low income individuals will remain uninsured.
How do the Exchanges affect my insurance coverage if I am a participant in a BAC plan?
They do not. Under the law, members with collectively bargained health and welfare plans are presumed to have affordable employer-sponsored coverage. In almost all cases, Taft-Hartley (BAC) plans provide far more coverage (90-95%) than the plans offered in the Exchanges (60-80%). They also offer "best in class" benefits, cover members when they travel and treat members as one for all.
Members who are not eligible for benefits under their BAC health plan will be eligible to obtain coverage through the Exchange. If a member's reduction in hours causes him/her to lose coverage under the plan, he/she will be offered COBRA. The member could then either elect COBRA or purchase coverage under the Exchange.
Says BAC President James Boland, "Our plans not only deliver superior benefits but provide the same coverage for everyone, regardless of age, family status, or health status. That's why we're working to maintain the relevance of our plans in this changing climate, and why we'll to work with the Administration to level the playing field on our members' behalf."
Where can I get more information?
Between now and October 1st, your employer or health fund will provide you with an Exchange notice giving you information about the Exchanges in your area. If you have collectively bargained coverage, you do not need to do anything with this information and you will not be eligible for subsidies or tax credits in the Exchange.
For more information, contact the International Health Fund (1.888.880.8222; rdonovick@bacweb.org) or visit www.healthcare.gov.