The Affordable Care ActA Guide to Determining Your Options

The what’s in it for me edition

Pamela Fugitt-Hetrick LUTCFDCD Financial & Insurance Services

Dave Ramsey’s Endorsed Local Provider for Health InsuranceHost of “Money Moves” radio show on KSCO AM1080

ACA/ObamacareWhat is in it for me?

How did we get here?

What is coming in 2014?

What Obamacare is?

What Obamacare isn’t?

What is in it for me?

How did we get here?Health Insurance costs increase at more than double the consumer price index.

When someone became ill without insurance, the couldn’t jump in and get coverage due to pre-existing conditions. Often they would receive care, be unable to pay, and costs are shifted to the “insured” to cover that care in the way of increased health costs.

Cost for care increases which causes the cost of health insurance to increase.

Premium increases no longer sustainable and people drop off coverage due to lack of affordability. 5.3 Million Californians are currently uninsured and eligible for tax subsidies in 2014

Changes we have already made?

Children under 18 can not be declined (03/2010) but can be charged more based on pre-existing coverage.

Children can stay on parents plan till age 26 regardless of student or even marital status.

100% coverage for preventive care visit on all plans that are not “grandfathered”. (Sold before 3/2010

All plans in California must cover maternity (07/2012)

Rates went up with each additional coverage added.

What is coming in 2014?Guaranteed Issue: No Pre-Existing conditions, no declines for health

Subsidies for lower income individuals and families (based on Federal Poverty Levels shown later) for citizens and legal residents of California who do not get health insurance offered to them by their employer.

Penalties for going uninsured:2014: Greater of $95 or 1% of Modified Adjusted Gross Income.2015: Greater of $325 or 2% Modified Adjusted Gross Income.2016: Greater of $695 or 2.5% Modified Adjusted Gross Income2017 and beyond: Annual Adjustments.

Essential Health Benefits (discussed Later)

Metallic Level Plans: Plans stamped to show similar “Actuarial Value” to make shopping easier

What is the ACA/Obamacare?

What it is• Private market insurance doing

business differently• More standardized plan designs• Guarantee issue ( pre-existing

conditions do not preclude you from getting insurance)

• Defined open enrollment periods (Not hop in/out at any time)

• Individual ‘s taxed if they don’t purchase insurance (Great of $95/yr or 1% income)

• Premiums subsidies cap the amount that consumers spend as a % of income for the second-lowest cost plan in the exchange (silver).

• People can purchase insurance in the state exchange or out in the public marketplaces.

• Premium subsidies are only available on plans purchased in the exchange.

• All plans will have Essential Health Benefits (listed on next slide)

Essential Health Benefits

• Ambulatory Pt services• Emergency Services• Hospitalization• Maternity and newborn • Mental health and

substance use disorder• Behavioral health

treatment• Prescription

• Rehabilitation• Laboratory Services• Preventive care• Wellness• Chronic disease

management• Pediatric oral and vision

What the ACA/Obamacare isn’t

• Not socialized medicine• Not cheaper for

everyone• Does not provide FREE

healthcare (deductibles, co-payments, co-insurance still exist on plans)

• No death panels• No coverage for most of

the things insurance never covered (new untested therapies, cosmetic treatments, etc.)

Favorite Myths

• You have to buy health insurance

• Employers have to provide health insurance.

•

• No: You can elect to pay a penalty greater of $95/yr or 1% of income

• No: Employers are not required to provide coverage. No penalties in 2014 even for large employers.

Open Enrollments and Qualifying Events

• Tight open enrollment periods:– Initially 10/01/2013 – 03/31/2014

– Thereafter 10/15 to 12/07 each year

(just like Medicare Open Enrollment for Medicare Advantage and RX plans)

• If you do not enroll in coverage during an open enrollment period, you can get coverage only with a “qualifying event”

• Birth, death, marriage, move to new state, etc.

Rates are based on ???Grandfathered/Non Grandfathered??

• Age• Location (19 rating

areas in the state of CA)• Family Size• Subsidies to aid with

cost of premiums based on income and family size.

• Grandfathered: Plan sold with an effective date of March 23rd, 2010 or earlier. These plans may be kept after January mainly unaffected by ACA.

• Non Grandfathered: Effective date after 03/24/2010. These plans will eventually be eliminated and replaced.

Three doors in the new marketplace

#1 The plan you have now #2 The NEW Covered CA Exchange

#3 NEW private exchange

If you’re plan remains, you can keep it. Watch for critical notices! OPEN YOUR MAIL!!!

The only place to get tax subsidies if you qualify for one.

All plans and rates in the exchange at the same prices

Grandfathered plans: no new members could mean higher rates?

Tax subsidies are paid each month by the state to the insurance carrier.

Additional carriers and options not found in the State Exchange. Anthem/Cigna/

Non Grandfathered (after 03/2010) will likely be dropped or drastically changed.

Private plans with subsidies, not a govt. plan

No income requirements.No subsidies available.

Aetna leaving CA MarketHN CFB plans non-marketed

Anthem, Blue Shield, Health Net, Kaiser

Anthem Blue Cross sold here

The New Metallic Tier PlansCategory % Paid by Health Plan % Paid by Individual

Platinum 90% 10%

Gold 80% 20%

Silver 70% 30%

Bronze 60% 40%

The higher the percentage the plan pays the higher the premium.Tax subsidies are based on the cost of the Silver plan

Each “Tier” has 4 cost sharing levels based on income in addition to subsidies.

Cost Sharing Tier ExampleMedical 100-150% FPL 150-200% FPL 200-250% FPL No co-share

subsidyPreventive Exam

$0 $0 $0 $0

Primary Care Co-Pay

$3 $15 $40

Specialist $5 $20 $50

Laboratory $3 $15 $40

Imaging 10% 15% 20%

Generic RX $3 $5 $20

Max. Out of Pocket

$2,200 Single$4,500 Family

$2,250 Single$4,500 Family

$5,200 Single$10,400 Family

$5,900 Single$11,900 Family

One Max Out of Pocket for all 10 Essential Health Benefits . Cost Sharing on Silver plan only!!!!! If you are in lower FPL levels, the silver plan is your best value.100% FPL (Federal Poverty Level) is $11,490 Single, $23,550 for family of 4

2013 FPL by household size with Premium Cap Ranges

Household Size 100% FPL 400% FPL Premium Cap Range

1 $11,490 $45,950 $0-$363.85/mo

2 $15,510 $62,040 $0-$491.15/mo

3 $19,530 $78,120 $0-$618.45/mo

4 $23,550 $94,200 $0-$745.75/mo

5 $27,570 $110,280 $0-$873.05/mo

6 $31,590 $126,360 $0-$1000.35/mo

7 $35,640 $142,440 $0-$1127.65/mo

8 $39,630 $158,520 $0-$1254.95/mo

Under 133% FPL will be placed in Medi-CalOver 400% FPL receives no subsidy, in exchange or out of exchange for additional options.

Premiums as a % of IncomeFederal Poverty Limit % of income to purchase Insurance

Up to 133% 2%

133%-150% 3%-4%

150%-200% 6.3%-8.05%

250%-300% 8.05%-9.5%

300%-400% 9.5%

In 2012, the Congressional Budget office estimated the cost to provide these subsidies to be $350 Billion plus $8 Billion in indirect costs (admin etc.)

Income is your estimate for 2014 and will be revised with additional tax or subsidy due when you file your 2014 taxes in 2015.

Silver Plan 21 Year Old

150% FPL 200% FPL 250% FPL 300% FPL 400% FPLMost Affordable

$216 - $177$44 Net

$108 Net $181 Net $216 Net $216

2nd Most Affordable

$230-$172$58 Net

$122 Net $195 Net $230 Net $230

3rd Most Affordable

$235-$172$63 Net

$127 Net $200 Net $234 Net $235

Premium for each plan is the same but the net cost you pay show is after subsidy.

Sample Silver Plan 40 Year Old150% FPL 200% FPL 250% FPL 300% FPL 400% FPL

Most Affordable

$276- $235$40 Net

$104 Net $177 Net $259 Net $276

2nd Most Affordable

$294-$235$58 Net

$122 Net $195 Net $227 Net $294

3rd Most Affordable

$299-$234$64 Net

$128 Net $210 Net $282 Net $299

Premium for each plan is the same but the net cost you pay show is after subsidy.Cost of the plan for the 40 year old is higher

Net costs for plan with subsidies is very close to what a 20 year old paysCost is higher if you do not get a subsidy

Health Insurance “Dave’s” Way

• Like your baby steps for your full budget…

• Develop and emergency plan (HSA is a tax advantaged option for this)

• Purchase a high deductible plan for catastrophic care, use emergency funds for more

• Managing your HSA Plan in the Era of Healthcare Reform (2014)– $3,300 max contribution

for an individual. – $6,550 max contribution

for more than 2 in a family on HSA coverage

– $1,000 additional make up contribution (age 55 or older)