Listening session attempts to shed light on Affordable Healthcare Act
On the same day that the Wisconsin Office of the Commissioner of Insurance (OCI) released its controversial data on rate increases under the Affordable Healthcare Act, a member of that office was in Rhinelander, hosting a listening session regarding the act.
The listening sessions are an effort by the state government to inform individuals and businesses about the upcoming changes expected under the highly debated new federal law.
But the biggest announcement came even before the session began as the office released how much interest rates will increase in Wisconsin once the Affordable Healthcare Act goes into place.
According to the press release, individuals in Wisconsin can see insurance rates raise anywhere from 9.72 percent to 124.85 percent depending on age with the youngest insured seeing the highest increases.
“The average premiums for younger folks have moved up,” OCI Public Information Officer J.P. Wieske said at Tuesday’s Rhinelander listening session. “In most cases health care premiums will increase.”
The figures released from OCI do not reflect federal subsidies that will be granted to lower income individuals and families to help pay for healthcare but Wieske said for younger, healthier adults, premiums will increase.
“They changed the rule to a 3 to 1 age limit from the 6 to 1 or 8 to 1 limit previously,” Wieske said. “What that means is previously a 20 year old could pay $100 for a premium and someone 64 could pay $600 or $800. Now it would be $100 for the 20 year old and only $300 for the older individual.”
That difference needs to be made up somewhere and it will be made up in higher rates for younger adults, Wieske said.
But with unemployment high in that younger age group, many could see those increased premiums offset by federal subsidies. With the Affordable Healthcare Act, the federal government will provide a tax credit to help low income individuals and families pay for insurance. Those eligible have to meet certain income criteria but a family of four with income upto $94,200 per year would be eligible.
That, however, is only on insurance purchased through the government exchange web site which goes live Oct. 1. Until that date, no one knows how much the government subsidies are going to be and what people will have to pay out of pocket for the mandadate insurance coverage.
“No one has seen it,” Wieske said. “We called them up to ask them what it will look like and they told us we have to wait until Oct. 1 like everyone else. When the web site goes live, then people will have a better idea if they qualify for a subsidy.”
When the site goes live, the public will also know what kind of coverage is available to them. Thirteen of the 25 insurers in the state of Wisconsin have signed up to be a part of the exchange but what areas they will cover remains to be seen.
The expectation in the exchange that people will purchase insurance from an insurer in their area with two to three choices given to each individual. But what insurer is covering what area is unknown right now. Some insurers are expanding their coverage areas while others are moving out of traditional areas and moving coverage into different counties. But the final look of the coverage map is far from certain Wieske said.
“Insurers are guessing right now,” Wieske said.
One of the main points of the Affordable Healthcare Act is requiring individuals and business to purchase insurance or provided it to their employees or be charged a penalty.
The business aspect of that requirement has been postponed until 2015 but still may not have the teeth it was intended too.
While businesses are required to provide insurance to their employees with a deductible of less than $2,000 or face a penalty, that penalty may never be enforced.
The IRS has been tasked with issuing the fines for businesses who do not comply with the act but Wieske said the agency may not be able to enforce that law.
“The IRS hasn’t been the most publicly friendly,” Wieske said. “They basically said they won’t be able to enforce the employer penalty.”
Whether this means the IRS will not be able to enforce the individual penalty as well remains to be seen. That penalty would issue a fine of $95 per adult or one percent of taxable income for those without insurance.
Impact on all
While businesses may not be forced to provide insurance to their employees until 2015 and then not face a penalty after that if they don’t, it does not mean that things won’t change for them come Jan. 1, 2014.
“Everyone will have to have a new benefit plan,” Wieske said.
With new provisions in the law changing what coverage can be offered and with insurers changing their coverage areas, everyone will be impacted in the new year.
Of course, what those changes will be and what new plans and premiums will look like again hinge on that Oct. 1 go live date for the exchange site when the data is finally released.
Open Enrollment Period
When the federal exchange site goes live, it will also mark the beginning of the open enrollment period for those signing up for healthcare through the exchange. The enrollment period will run through March 31, 2014 for the first year but after that will only be open until Dec. 15.
“This will be the only time you will be able to get coverage,” Wieske said. “Unless you have a major change in your status, things like a birth, a death in the family.”
Wieske said he encourages individuals not to just settle on one plan right away but to weigh their options on the exchange and the private market.
“I always tell people shop around,” he said. “Find the best deal and best plan that works for you.”