Health exchanges: Just what the doctor ordered?

Posted Friday, May. 31, 2013  comments  Print Reprints
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Health insurance exchanges • On Oct. 1, the federal health insurance exchange program will begin. Texas is one of 19 states opting not to have a state program, so it will be placed in the national exchange, called the Marketplace. • The Marketplace is for consumers who are not adequately covered by an employer’s plan or are not enrolled in Medicare or Medicaid. It will have a website of all plans and their costs. • The site will have a calculator so you can figure your monthly premium and see whether you qualify for a subsidy or tax credit. • The first open enrollment will last through March. Coverage can begin Jan. 1. • Failure to obtain coverage will result in a penalty on your federal income tax return. Penalties increase each year. •  www.healthcare.gov Affordable Care Act highlights • Guaranteed issue, meaning you can enroll in a plan when you apply for it, either a private policy or a government program. • Preventive services, such as mammograms and cholesterol screenings, typically carry no out-of-pocket costs. • Plans can’t limit the dollar amount paid for essential health benefits within a year or over the lifetime of your plan. • Medicare Part D beneficiaries get a 50 percent discount on name-brand prescription drugs and a 21 percent discount on generic prescription drugs. Over the next few years, the discounts will grow. • Children up to age 26 can be on their parents’ health plan. • Mandatory coverage of “essential health benefits,” including emergency services; hospitalization; maternity and newborn care; mental health and substance abuse treatment; prescription drugs; rehabilitative services and devices; laboratory services; preventive and wellness services; and chronic disease management. Source: BeCoveredTexas.org

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In four short months, health insurance shopping in Texas will likely change substantially for consumers seeking individual or small group plans.

“On one website, all of the prices and products will be available,” said Stacey Pogue, senior policy analyst at the Center for Public Policy Priorities in Austin. “The exchange as an ability for consumers to shop for insurance is revolutionary.”

Transparency is not the only thing that will change when the exchanges begin Oct. 1: More competition may be coming to Texas.

A memo released this week by the White House said early reports indicate that the federal exchange, also called the Marketplace, is attracting new insurance choices.

“While the number of issuers may change, today, over 120 issuers have applied to offer qualified health plans in the Health and Human Services-run Marketplace,” the memo stated.

“Consumers will have multiple options in each tier of coverage: catastrophic, bronze, silver, gold and platinum. On average, issuers plan to offer more than 15 qualified health plans per state, with some plans being offered in part rather than all of the state.”

This could be good news for people in Texas, where the memo says more than 50 percent of health insurance for individuals is controlled by one insurer: Blue Cross Blue Shield of Texas.

At the same time, eye-popping premium increases have yet to materialize in states where exchanges are already set up. Exchange prices have been announced in California, Georgia, Maryland, Oregon and Washington, Pogue said.

“There was a lot of concern about ‘rate shock’ by insurers, some testifying before Congress that rates would go up 100 to 200 percent,” she said. “It turns out those estimates were really overblown, with most rate increases pretty reasonable and in some cases lower.”

In states that have published rates, families are generally paying the same as before or only slightly more. Some populations, like single men, could pay more, she said.

“But almost all who are paying more will qualify for a subsidy to offset the cost,” Pogue said. Subsidies, in the form of tax credits, are based on household income.

Last month, Families USA said around 2.6 million Texans, including 191,330 in Tarrant and Parker counties, will be eligible for tax credits to help offset health insurance costs in 2014. The credit uses a sliding scale for individuals and families making less than four times the poverty level — $46,000 for an individual or $94,200 for a family of four.

The tax credit and other federal help for deductibles, co-pays and other out-of-pocket costs are expected to be worth $21.7 billion to $31.5 billion to Texans during the first four years, according to the Texas Department of Insurance.

Blue Cross Blue Shield of Texas, the state’s largest health insurer, with $8 billion in premiums in 2012, is one of the few insurers to announce plans to participate in the federal exchange for Texas.

“We are all in,” Blue Cross spokeswoman Margaret Jarvis said. “To support our individual and small group market members and ensure a smooth transition to the new health insurance market in 2014, Blue Cross and Blue Shield of Texas intends to participate in the exchange in all 254 counties of Texas.”

Plans and their prices are still under development, Jarvis said. But the insurer recently filed with the state Insurance Department for rate increases averaging 13.8 percent for current policyholders.

Pogue said the department does not have the power to reject a rate increase.

“Whether it is reasonable or not, TDI can’t do anything if a health insurer raises its rates except now post it online,” she said. “That’s not true for home and auto insurance. They can reject a rate if it is excessive. It’s totally baffling that they don’t have that power for health insurance.”

The department announced this week that it will post health insurance rate increases and histories on its website, bit.ly/11Huslw. The tracking tool was developed with a Health and Human Services grant.

Jarvis said the price increase, which will not apply to policyholders grandfathered out of healthcare reform, was based on the cost of medical care for its covered population. It affects 203,540 Texans.

Aetna, another large insurer in the state, with $1.8 billion in premiums in 2012, said it is leaving announcements of participation in exchanges up to individual states.

UnitedHealthcare, with $40.7 million in premiums in the individual market in Texas, said it has not announced its plan for participating in the Texas exchange but said it could be a growth market for the insurer.

“We continue to evaluate exchanges and see 2014 as just the very start of the exchange markets,” spokeswoman Kim Whitaker said. “We are simply taking the time to carefully evaluate and better understand how the exchanges will work to ensure we are best prepared to participate meaningfully in their development.”

The exchanges come as Americans remain uneducated about — and in some cases unaware of — healthcare reform, according to an April survey by the Kaiser Family Foundation.

The survey showed that 4 in 10 Americans were unaware that the Affordable Care Act is the law of the land and is being implemented. Among those populations that the law was specifically designed to help, the numbers are even lower.

Six in 10 households making less than $30,000 a year were unable to say the law was still in force, and half of younger Americans did not know that.

Stay tuned.

Teresa McUsic’s column appears Saturdays.

TMcUsic@SavvyConsumer.net

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