Obama's New Health Insurance Markets Are on the Way

health insurance exchanges affordable care actBy RICARDO ALONSO-ZALDIVAR

WASHINGTON -- Buying your own health insurance will never be the same.

This fall, new insurance markets called exchanges will open in each state, marking the long-awaited and much-debated debut of President Barack Obama's health care overhaul.

The goal is quality coverage for millions of uninsured people in the United States. What the reality will look like is anybody's guess -- from bureaucracy, confusion and indifference to seamless service and satisfied customers.

Exchanges will offer individuals and their families a choice of private health plans resembling what workers at major companies already get. The government will help many middle-class households pay their premiums, while low-income people will be referred to safety-net programs they might qualify for.

Most people will go online to pick a plan when open enrollment starts Oct. 1. Counselors will be available at call centers and in local communities, too. Some areas will get a storefront operation or kiosks at the mall. Translation to Spanish and other languages will be provided.

When you pick a plan, you'll no longer have to worry about getting turned down or charged more because of a medical problem. If you're a woman, you can't be charged a higher premium because of gender. Middle-aged people and those nearing retirement will get a price break: They can't be charged more than three times what younger customers pay, compared with six times or seven times today.

If all this sounds too good to be true, remember that nothing in life is free and change isn't easy.

Starting Jan. 1, 2014, when coverage takes effect in the exchanges, virtually everyone in the country will be required by law to have health insurance or face fines. The mandate is meant to get everybody paying into the insurance pool.

Obama's law is called the Affordable Care Act, but some people in the new markets might experience sticker shock over their premiums. Smokers will pay a financial penalty. Younger, well-to-do people who haven't seen the need for health insurance may not be eligible for income-based assistance with their premiums.

Many people, even if they get government help, will find that health insurance still doesn't come cheaply. Monthly premiums will be less than the mortgage or rent, but maybe more than a car loan. The coverage, however, will be more robust than most individual plans currently sold.

Consider a hypothetical family of four making $60,000 and headed by a 40-year-old. They'll be eligible for a government tax credit of $7,193 toward their annual premium of $12,130. But they'd still have to pay $4,937, about 8 percent of their income, or about $410 a month.

A lower-income family would get a better deal from the government's sliding-scale subsidies.

Consider a similar four-person family making $35,000. They'd get a $10,742 tax credit toward the $12,130 annual premium. They'd have to pay $1,388, about 4 percent of their income, or about $115 a month.

The figures come from the nonpartisan Kaiser Family Foundation's online Health Reform Subsidy Calculator. But while the government assistance is called a tax credit and computed through the income tax system, the money doesn't come to you in a refund. It goes directly to insurers.

Obama's law is the biggest thing that's happened to health care since Medicare and Medicaid in the 1960s. But with open enrollment for exchange plans less than 10 months away, there's a dearth of consumer information. It's as if the consumer angle got drowned out by the political world's dispute over "Obamacare," the dismissive label coined by Republican foes.

Yet exchanges are coming to every state, even those led by staunch GOP opponents of the overhaul, such as Govs. Rick Perry of Texas and Nikki Haley of South Carolina. In their states and close to 20 others that are objecting, the exchanges will be operated by the federal government, over state opposition. Health and Human Services Secretary Kathleen Sebelius has pledged that every citizen will have access to an exchange come next Jan. 1, and few doubt her word.

But what's starting to dawn on Obama administration officials, activists, and important players in the health care industry is that the lack of consumer involvement, unless reversed, could turn the big health care launch into a dud. What if Obama cut the ribbon and nobody cared?

"The people who stand to benefit the most are the least aware of the changes that are coming," said Rachel Klein, executive director of Enroll America, a nonprofit that's trying to generate consumer enthusiasm.

"My biggest fear is that we get to Oct. 1 and people haven't heard there is help coming, and they won't benefit from it as soon as they can," she added. "I think it is a realistic fear."

Even the term "exchange" could be a stumbling block. It was invented by policy nerds. Although the law calls them "American Health Benefit Exchanges," Sebelius is starting to use the term "marketplaces" instead.

Polls underscore the concerns. A national survey last October found that only 37 percent of the uninsured said they would personally be better off because of the health care law. Twenty-three percent said they would be worse off in the Kaiser poll, while 31 percent said it would make no difference to them.

Insurers, hospitals, drug companies and other businesses that stand to benefit from the hundreds of billions of dollars the government will pump in to subsidize coverage aren't waiting for Washington to educate the public.

Blue Cross and Blue Shield plans, for example, are trying to carve out a new role for themselves as explainers of the exchanges. Somewhere around 12 million people now purchase coverage individually, but the size of the market could double or triple with the new approach, and taxpayers will underwrite it.

"Consumers are expecting their health insurance provider to be a helpful navigator to them," said Maureen Sullivan, a senior vice president for the Blues' national association. "We see 2013 as a huge year for education."

One goal is to help consumers master the "metals," the four levels of coverage that will be available through exchange plans: bronze, silver, gold, and platinum.

Blue Cross is also working with tax preparer H&R Block, which is offering its customers a health insurance checkup at no additional charge this tax season. Returns filed this year for 2012 will be used by the government to help determine premium subsidies for 2014.

"This tax season is one of historical significance," said Meg Sutton, senior advisor for tax and health care at H&R Block. "The tax return you are filing is going to be key to determining your health care benefits on the exchange."

Only one state, Massachusetts, now has an exchange resembling what the administration wants to see around the country. After six years in business, the Health Connector enrolls about 240,000 Massachusetts residents. It was created under the health overhaul plan passed by Republican former Gov. Mitt Romney and has gotten generally positive reviews.

Connector customer Robert Schultz is a Boston area startup business consultant who got his MBA in 2008, when the economy was tanking. Yet he was able to find coverage when he graduated and hang on to his insurance through job changes since. Schultz says that's freed him to pursue his ambition of becoming a successful entrepreneur -- a job creator instead of an employee.

"It's being portrayed by opponents as being socialistic," Schultz said. "It is only socialistic in the sense of making sure that everybody in society is covered, because the cost of making sure everybody is covered in advance is much less than the cost of putting out fires."

The Connector's executive director, Glen Shor, said his state has proven the concept works and he's confident other states can succeed on their own terms.

"There is no backing away from all the challenges associated with expanding coverage," Shor said. "We are proud in Massachusetts that we overcame what had been years of policy paralysis."


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wscaman

So biased Massachusets budget went fron 23 % cost to the State to over 43$ now going to over 50% see what Tencare did when it hit that , 50% or more , cut to medicare basic.

not enough Dr's , longer waits , cuts in Education , Roads , police Firemen , just look at Illinois they signed uo] and they are broker than the other 49 states, 12 months out to Pay last years bills ugly.

January 29 2013 at 8:28 PM Report abuse +1 rate up rate down Reply
wscaman

So biased Massachusets budget went fron 23 % cost to the State to over 43$ now going to over 50% see what Tencare did when it hit that , 50% or more , cut to medicare basic.

not enough Dr's , longer waits , cuts in Education , Roads , police Firemen , just look at Illinois they signed uo] and they are broker than the other 49 states

January 29 2013 at 8:28 PM Report abuse +1 rate up rate down Reply
gmydogbud

If "Obama Care", is such a wonderful thing, why is it that President Obama and the members of Congress, want nothing to do with it for themselves and their famlies? Thought they were all about - Fairness - !!!

January 29 2013 at 6:11 PM Report abuse rate up rate down Reply
groman00

Agreed

January 29 2013 at 4:42 PM Report abuse +1 rate up rate down Reply
mary

WHEN THE GOVERNMENT BECOME AN INSURANCE AGENCY THEN WE ARE ALL IN TROUBLE!!

January 29 2013 at 2:56 AM Report abuse +3 rate up rate down Reply
samuri.sansui

If you think health care was expensive last year wait until 2014. The rates are going out of sight. In Japan we honor our elders, not put them in box in ground.

January 29 2013 at 2:47 AM Report abuse -3 rate up rate down Reply
mrspelosi

teapotparty11
TEA PARTY FOREVER!!!! TEA PARTY IS AMERICA!!!! AN ARMED GUARD FOR EVERY AMERICAN!!!!

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Perhaps you could discuss that with the caretakers at the asylum darling. Maybe you could discuss all your other screen names with them too dear. Please do not forget to ask why we liberals have trouble controlling our bad behavior too doll.

January 29 2013 at 12:59 AM Report abuse -2 rate up rate down Reply
1 reply to mrspelosi's comment
mary

YOU KNOW YOU NEED A WAKE UP CALL. YOUR LOVER(OBAMA)IS DESTROYING THIS COUNTRY. AND THE POOR SENIOR CITIZENS ARE PAYING FOR YOUR LOVERS MISTAKES!!!

January 29 2013 at 2:58 AM Report abuse -4 rate up rate down Reply
mrspelosi

teapotparty11
BACHMANN IS THE HEART AND SOUL OF THE TEA PARTY!!!! SHE SHOULD HAVE GOT TO ASK HILLARY SOME QUESTIONS TOO!!!! YOU CAN'T HIDE BEHIND THOSE GLASSES FOREVER HILLARY!!!
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Darling perhaps you should call your sponsor and let them know you fell of the wagon again. It is a shame that we liberals can not control our outrageous and outlandish comments.

January 29 2013 at 12:55 AM Report abuse -3 rate up rate down Reply
Annie

The AMA has stated that there will soon be a shortage of doctors in the US, as many will stop practicing medicine. So, get ready to only see a PA when you go for medical care! Under Obamacare everyone will be able to get preventive care, but if you are really sick, have a disease, or are seriously injured, your quality and the timing of your care will not be the same as it has in the past.

January 28 2013 at 10:10 PM Report abuse +3 rate up rate down Reply
democracks.o

mr41005
Your ignorance astounds me. Please put down the crack pipe. Pubs lost because they were too busy trying to out do each other with their insane rantings.

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This is the perfect example that proves the lie that liberals like the one above embrace all people and respect the other persons point of view. Liberal tolerance is nothing but a myth.

January 28 2013 at 8:48 PM Report abuse +1 rate up rate down Reply