Obamacare sign-ups still present major issues

Wednesday, November 26, 2014

Local agent says costs higher, subsidies decreasing

Enrollment for the second year of the Affordable Care Act, commonly known as Obamacare, is underway. According to Randall Bell, with Bell and Associates in Monett, the representative for the Anthem Blue Cross/Blue Shield insurance giant, the federal program still has sign-up issues. Because of apparent changes in the way the law works, Bell and his staff expressed reservations over how well the law is working.

"Ninety percent of those who came in last year who qualified for subsidies got 100 percent of their premiums covered," Bell said. "Some of the people who were eligible for subsidies last year are not eligible this year. Some of the subsidies are going away. We knew costs were going to go up. It doesn't seem like the ACA has made any difference."

Several key variables have surfaced in tracking how the ACA works. Bell said the two biggest factors in determining premiums and eligibility for subsidies are the adjusted gross family income and a person's age. Households where families earn about $40,000 appear to fall in the right bracket for receiving full subsidies.

Age seems to favor younger clients. Bell said a family of four, with parents around age 30, may have a premium of $800 a month. In contrast, a 62-year-old client may pay the same premium just for himself. Bell said older clients can likely face rising premiums until they hit age 65, and then they leave the system and move into Medicare.

Premiums also seem to be driven by a community rating. Bell said despite the lower income demographic locally, the rating calls for boosting insurance charges annually.

Karen Bickford, Bell's administrative assistant, said the changes appear to be pushing away two of the target groups for whom the ACA was designed. While many companies provide insurance for their employees, dependent spouses often fell outside of coverage. Others who have never had coverage could receive it under the ACA, often at no cost, when subsidies are applied.

Both types of customers may have signed up last year. For the second year, they appear to face higher premiums. The vast majority of plans Bell and Associates signed clients to a year ago were silver plans, the mid-range of what the ACA offers. Bickford said she has seen none of the renewing policies offering a full-coverage subsidy. Most have a cost of $200 or $300 a month. Bickford is afraid many of those people will opt to go back to uninsured status.

"We had a family that had a $25,000 income for the two of them," Bickford said. "Their subsidy was half of what is was last year."

"No one took a rate deduction," Bell said. "I've not seen any."

Processing claims have become more complicated as well. Bell said the ACA has introduced a new coding system for claims, with substantially more options. Bell said doctors have had to hire more staff to process claims, but he wondered if the options will only give insurance companies more ways to exclude payments.

In the short term, people who do not have insurance will face a 2 percent penalty on their income tax if they have not signed up for a policy by Feb. 15, 2015, when the sign-up period closes. Those who do not earn enough to pay income tax face no real penalty. The middle class, those who can afford to pay, Bell said, is bearing the brunt of the consequences.

"Families have to live those 12 months of working with a finite amount of money," Bickford said. "They may not be able to afford the premiums. The penalty may be the lesser of two evils."

Bell recalled the ACA planned to phase out the subsidies altogether over time. He wondered how effective the ACA would become if that happened.

The 1-year delay for small companies with less than 50 employees to secure coverage requirements has ended. Many are trying to include dependents on the coverage they offer. Bell said in comparing group policies and coverage under the ACA, private companies may offer plans equal to or better than those in the federal packages. Even so, plans this year have higher premiums, higher deductibles and higher out-of-pocket expenses, making them not as affordable.

The ACA website works better than it did a year ago, but Bickford said she has been kicked off the site twice in the first three days of signups. Bell observed the entire process, requiring registration every year instead of simply rolling over coverage, was very inefficient and made his work very difficult.

"When people come in here, we explore the ACA and the private sector for policies," Bell said. "It's a complicated decision. The federal government thought you could simply go to the Internet and sign up. It's not that easy."

Arkansas established its own statewide exchange for health insurance. In an ACA bronze policy, Bell said, even if a person runs up a $30,000 medical bill, the maximum out-of-pocket cost for an individual is $6,350. The insurance pays the rest. Missouri offers a much less certain outcome.

This year, Missouri residents do have more choices, with policies offered through Anthem and Coventry, the only companies offering polices for the ACA last year, and Humana, now available in some counties.

Expanding Medicaid would have at least provided coverage for the poorest residents, Bickford said. People who qualify for Medicaid cannot qualify for coverage under the ACA.

"I'm not saying the ACA is not good for some people," Bell said. "It has helped some. There's no reason it should be so difficult."

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