Changes coming to health care act

As enrollment nears, here’s what you need to know

The Trump Administration’s efforts to sunset the Affordable Care Act have sewn confusion among many Americans who rely on the socalled Obamacare marketplace for health coverage.

Critics assert the confusion is deliberate. President Donald Trump campaigned on a promise to “repeal and replace” former President Barack Obama’s signature policy achievement and Congress’ inability thus far to finish the job prompted Trump to issue executive orders on Oct. 12. Those orders stopped federal payments for some subsidies and encouraged the expansion of low-cost health plans that lack basic coverage guarantees under the act.

Other moves, such as reducing the enrollment period from three months to six weeks, slashing the budget for advertising and assistance “navigators” and shutting down Healthcare.gov for 12 hours each week during the enrollment period are intended to reduce the number of people who sign up for coverage, Trump’s critics say.

Despite those efforts, the act still exists and insurance companies will offer coverage plans starting Nov. 1.

A majority of the 1.4 million Affordable Care Act consumers in Florida will continue to qualify for government subsidies and will pay no more for premiums and out-of-pocket costs than they paid in 2017, according to state and industry officials. Some might pay less, they said.

Others will continue to receive subsidies to help reduce premium costs even if they aren’t eligible for help for out-of-pocket costs. That group will see modest premium increases.

A third group — about 7 percent of on-exchange Silver plan purchasers — will see premiums jump sharply because they are not eligible for government subsidies. When the enrollment period begins, insurers offering plans in Florida for 2018 will encourage those consumers to switch to comparable plans with lower price increases.

The changes are not impossible to understand. Here are some questions and answers that can help:

Q: First, some basics. What is the Affordable Care Act?

A: The ACA is a comprehensive health care law enacted in March 2010 intended to ensure all Americans have health insurance. It barred health insurers from refusing to cover consumers with pre-existing conditions and from raising

rates because a consumer developed a health condition and also guaranteed consumers who maintained uninterrupted coverage could renew their plans.

Like all insurance, the ACA depends on revenue from the many to pay for the problems of the few. To coerce participation from young, healthy payers, the Individual Mandate required nearly everyone to be covered — through group or individual plans — or pay a penalty each year when filing their taxes.

Q: What else was the ACA intended to do?

A. The law provided government subsidies to help low-income Americans pay for health insurance and treatment. There are two main types: Premium subsidies, which are tax credits that help pay for monthly premiums, and cost-sharing reductions to help reduce consumers’ outof-pocket costs for medical care. Cost-sharing reductions were paid directly to insurance companies prior to Trump’s executive order stopping them.

Q: How many Floridians get that help?

A: Roughly 93 percent of 1.4 million Floridians who purchase Affordable Care Act “on-exchange” plans qualify for premium subsidies and 75 percent qualify for cost-sharing reductions. About 770,000 residents in Broward, Palm Beach and Miami-Dade counties were enrolled in Affordable Care Act plans at the end of January.

Q: How do consumers qualify for these subsidies?

A.: It’s based on income. Individuals and households qualify for premium subsidies if they earn between 100 percent and 400 percent of the federal poverty level. Those enrollees qualify for additional cost-sharing reductions if they earn between 100 percent and 250 percent of the poverty level. Q: How much money is that? A.: In 2017, the federal poverty level for a single person is $12,060. For a two-person household, it’s $16,240. For a family of three, $20,420. For a family of four, $24,600. And for a family of five, $28,780.

Q: What’s the maximum I can make to qualify for assistance?

A. Individuals are capped at 400 percent of the poverty level if their adjusted gross income is $48,240. A family of four qualifies with income up to $96,240. Q: How much can I get? A: The closer your household is to 100 percent of the poverty level, the bigger your discount.

For example, a 57-year-old single female non-smoker in Broward County making $12,060 qualified in 2017 for a subsidy covering 97 percent of her monthly premium for a Silver plan [the second-lowest-cost type of plan on a range that includes Bronze, Silver, Gold and Platinum.] That means the government paid $558 a month for her $579-a-month plan and she paid $21 a month.

The same female making 200 percent of the poverty level — $24,120 — qualified for a 78 percent subsidy for the same Silver plan, according to the Kaiser Family Foundation’s subsidy calculator based on national average Silver plan costs. That means the government paid $451 a month and she paid $127.

At 300 percent of the poverty level — $36,180 — she qualified for a 50 percent subsidy and paid $288 a month. At 400 percent of the poverty level — $48,240 — she qualified for a 34 percent subsidy and paid $384 a month.

While plan prices vary according to enrollees’ ages, where they live and whether they use tobacco, premium subsidies for low-income enrollees are based on caps on the percentage of income they’d be charged for premiums.

Income-based premiums subsidies are required under the law for consumers who buy “on-exchange” coverage and Trump cannot issue an executive order to kill the government’s obligation to provide those discounts. On-exchange plans qualify for government subsidies. Off-exchange plans don’t. Repealing the subsidies requires an act of Congress.

That’s why officials from Blue Cross Blue Shield of Florida, the state Office of Insurance Regulation and independent agents stress that most consumers buying subsidized plans on the exchange will see no or little change in premium costs in 2018.

Q: But what about the costsharing reductions that Trump stopped paying for? Will cutting those payments make everyone’s costs go up?

A: Because cost-sharing reductions weren’t mandated under the Affordable Care Act law, Trump had the authority to stop payment for them.

Remember, these were devised as additional help to enrollees who already qualify for premium subsidies. Cost-sharing reductions help cover costs of procedures, visits to specialists, drugs and other out-of-pocket expenses for enrollees with incomes between 100 percent and 250 percent of the poverty level.

Insurers are required to pay for them by increasing their share of medical costs for qualifying enrollees.

For example, that 57-year-old earning 100 percent of the poverty level who qualifies for a $21-a-month premium could, with a cost sharing reduction, select a 2017 plan with no deductible and an out-of-pocket maximum of $950, or a plan with a $575 deductible and out-ofpocket maximum.

Enrollees with higher incomes up to 250 percent of the poverty level are eligible for smaller subsidies.

Enrollees with incomes more than 250 percent of the poverty level do not qualify for additional cost-sharing subsidies, even if they receive tax credits that reduce their monthly premiums.

In Florida, cost sharing reductions will continue to be available in 2018.

Q: But if Trump stopped making those payments, how will cost-sharing assistance be funded in 2018?

A: Last summer, state insurance regulators anticipated that Trump might stop making the payments and directed insurers to increase rates for on-exchange Silver plans that qualify for costsharing subsidies by 31 percent over the increases previously requested. For Florida Blue, those previous increases ranged from 7 percent to 12 percent, according to Penny Shaffer, Florida Blue’s South Florida region market president.

The increased rates will enable the insurers to recover their additional outlays for the costsharing reductions through increased premium subsidies. Most enrollees who qualify for both types of assistance won’t notice a difference.

Basically, the government took away one pot of money but will have to dig into another pot of money to make up the difference. A study by the nonprofit Urban Institute predicts the government will spend 11 percent more in Florida subsidizing enrollees because of Trump’s action.

Q: So where does that leave enrollees who don’t qualify for premium tax credits or costsharing reductions?

A: Paying a lot more if they remain on the exchange. But insurers are creating off-exchange Silver plans with virtually the same provider networks and benefit selections minus the 31 percent rate increases designed to preserve cost-sharing subsidies.

The 7 percent of on-exchange enrollees who don’t qualify for assistance will need to transition to the new off-exchange plans like tens of thousands of other individual plan enrollees, Shaffer said. The company’s off-market plans are ACA-compliant, so “there’s no reason for them to stay on-exchange,” she said.

At Florida Blue, just 66,000 of roughly 1 million on-exchange enrollees don’t qualify for any kind of subsidy, she said. The company is concerned some of them won’t bother to select a new off-exchange plan and will be automatically re-enrolled at a much higher price.

Q: What about the Individual Mandate that requires [nearly] everyone to buy health insurance or pay a tax penalty next year?

A: That remains the law of the land until Congress changes it. Most taxpayers are subject to a penalty of $695 or 2.5 percent of household income, whichever is higher.