Health care reform is changing, and we've found answers to some basic questions about the Affordable Care Act, also known as Obamacare.
Q. Who is offering health insurance on the new state marketplaces that go online Oct. 1 for people who don't have insurance coverage or for small businesses?
A. In Nebraska, it's Blue Cross Blue Shield of Nebraska, Coventry Health Care, CoOportunity Health and Health Alliance Midwest. In Iowa, it's Coventry, CoOportunity, Gunderson Health Plan, Avera Health Plans and, for small businesses only, Health Alliance and Sanford Health.
Q. I've got decent, reasonably priced insurance through my job. Will anything change for me Jan. 1?
A. If you're part of a group policy, the policy can continue but will have added “essential health benefits,” including maternity and pediatric dental and vision coverage. That change probably will raise your premiums.
You also may pay added fees and taxes: a $63-a-year transitional reinsurance fee per covered person; a health insurance tax that may raise premiums by about 2.5 percent; and a patient-centered outcomes research fee of $2 per covered person for 2014.
Q. What if an individual or group policy renews later in 2014?
A. The requirements to provide “essential benefits” take effect when the policy renews.
Q. Who will qualify for tax credits in the new health marketplaces?
A. A study by Families USA estimated 169,000 Nebraskans and 254,000 Iowans will be eligible. You don't qualify if you are covered by Medicare, Medicaid or Tricare, the military-related health plan.
You may qualify for a tax credit if your employer doesn't offer insurance or if your out-of-pocket spending with your employer's plan is more than 9.5 percent of your wages from the employer, which makes it “unaffordable” under the law.
You may qualify if your household income is between 100 percent and 400 percent of the federal poverty level. That's between $11,490 and $45,960 for a single person, $15,510 and $62,040 for a couple and $23,550 to $94,200 for a family of four.
Q. How does Medicaid fit in?
A. Because of Affordable Care Act rules and a U.S. Supreme Court ruling, some low-income Nebraskans won't qualify for Medicaid or Obamacare tax credits. Obamacare had envisioned states expanding Medicaid eligibility. But the Supreme Court said states can choose whether to do so, and Nebraska has not expanded eligibility.
Some people in Nebraska have income below the 100 percent level but do not qualify for Medicaid. That means they make too much money to qualify for Medicaid in Nebraska but less than the minimum for tax credits under the Affordable Care Act.
Q. What about Medicaid in Iowa?
A. Iowa is adopting a form of Medicaid expansion and apparently would not have an eligibility gap between Medicaid and Obamacare tax credits. In states that expand Medicaid coverage, people who make up to 133 percent of the federal poverty level would be eligible for Medicaid but not tax credits.
Q. How much of a tax credit would I get?
A. The lower your income, the bigger the tax credit. A Kaiser Foundation calculator estimates that a single nonsmoker making $30,000 a year would receive a $507 tax credit and pay $2,512 a year for mid-level coverage in the marketplace. But amounts will vary from state to state, depending on the policies offered and the person's age.
Q. How can I determine whether I qualify for a tax credit?
A. Go to your state's online insurance marketplace, or exchange, when it opens on Oct. 1 and fill out a three-page form (11 pages for a family) giving your income and other information, including whether your employer offers affordable coverage. The facts are “self-attesting,” which means they won't be checked until later. The online marketplace will tell you whether you qualify for a tax credit.
Q. If I qualify, how do I get the tax credit?
A. You can use all or part of the tax credit to reduce your monthly health insurance premiums or use all or part of it to reduce your income taxes. The government pays the tax credit amount you select to the insurer, and you pay the rest of the insurance premium. When you file your tax return, the amounts will be reconciled, along with the income and other information you listed on your marketplace application.
Q. Could that reconciliation cause problems?
A. If you listed your income too low when you enrolled, you might have to pay back some or all of the tax credit. If you said your employer's insurance wasn't affordable and it actually was, you might have to pay back the whole thing.
Q. Could one spouse qualify for a tax credit but not the other?
A. Yes. If an employer offers coverage that is affordable for the employee but does not offer family coverage, then the employee would not qualify for a tax credit but the family could.
Q. How will insurance companies vary rates among individuals?
A. For individuals and small groups, they can consider only age, smoking status and geographic location. The law allows the highest rates to be up to three times the lowest rates; previously, the range between the highest and the lowest was bigger.
Preliminary prices in Nebraska showed Blue Cross policies did not make a price difference according to location, but CoOportunity's policies were priced slightly higher in the Omaha area than the same policies other parts of the state.
Q. Can I buy marketplace coverage even if I don't qualify for a tax credit?
A. Yes. But to use your tax credit, you must buy coverage on the marketplace.
Q. How much will the marketplace insurance cost?
Iowa's prices haven't been made public yet. Some sample preliminary Nebraska prices are posted on the Nebraska Department of Insurance's website but do not show tax credit amounts and all alternatives that will be available to consumers.
Q. Does this change my health savings account, health reimbursement account or flexible spending account?
A. No, they continue as they are.
Q. What are these bronze, silver, gold and platinum health plans I'm hearing about?
A. The “metallic” health plans vary by how much the insurer (or the employer in a self-insured plan) pays on claims versus the customer. From bronze to platinum, the insurer's share is 60, 70, 80 or 90 percent, respectively.
Q. Why will all policies, even those for single men, include maternity benefits?
A. Policies can't discriminate based on gender, and maternity is one of the essential health benefits for employer groups up to 49 employees. (Policies also cover prostate exams.) The idea is to spread all health risks among all policyholders.
Q. I'm young and don't smoke. Will that save me money?
A. Yes. Many policies cost 50 percent more for smokers, whether inside the marketplace or outside.
Being young helps, too, but less under Obamacare. In general, younger, healthier people will pay more than they do today, and older, sicker people will pay less than they would have with previous underwriting standards.
Q. If I don't get health insurance, what's the penalty?
A. In 2014 it's $95 for an individual and up to $285 for a family, or 1 percent of income, whichever is larger. In 2015 it's $325 for an individual and up to $975 for a family, or 2 percent of income. In 2016 and beyond it's $695 for an individual and a $2,085 maximum for a family, or 2.5 percent of income. The penalties are to be assessed on tax returns.
Q. How will the government know whether I have insurance?
A. Tax returns probably will have a box for you to list your insurer, which could be cross-checked with the employer's tax filing or your insurer's information. If you lie or don't buy insurance, you may get a letter asking you to pay a penalty.
The IRS can't garnish your wages to collect, but it can reduce your refund. Employers already list insurance benefits on your W-2 income tax form.
Q. Does this apply to federal employees and veterans with health benefits?
A. Veterans' Tricare coverage meets the law's requirements, and federal employees also will have to comply.
Q. Are some people exempt from the law?
A. Yes. Those who are not required to file tax returns are exempt. The law also will allow hardship exemptions, on a case-by-case basis.
Q. What was the one-year delay the president approved this summer?
A. The mandate that employers with 50 or more workers must provide affordable insurance or pay penalties will take effect in 2015.