National Health Care – What it Means for the Individual

By now, we know that national health care is here to stay.  It will change and adapt as the
year progresses, but it will stay.  There are two components of the new national health care law, the individual and the group.  Due to an increase in client questions regarding the individual marketplace, we will focus on that segment here.

The Background

• What is an Exchange anyway?  In its most basic form it is a set of government-regulated and standardized health care plans from which individuals may purchase health insurance.
• Each invidual state has the option of 1.) joining with the Federal Exchange program or 2.) taking on the responsibility of forming their own private exchange programs administered individually.
• As it stands right now, Michigan will be forming a partnership with the Federal Exchange program.

The Time Frame

• Currently the start date for enrolling members on an individual plan through the exchange is October 1^st, 2013 through February 28^th, 2014 (also called the Open Enrollment Period).  There will also be something called an Initial Enrollment Period whereby individuals who become newly eligible outside of the date listed above will still have access to enrolling in coverage.
• There is some discussion that this date could change, based on the fact that little information has been released regarding the actual implementation of this new system with such a short time frame remaining.

The Plan

The exchange will be structured in the form of a medal tiered system:

• Bronze (plans pays 60% of costs, enrollee pays 40%)
• Silver (70%/30%)
• Gold (80%/20%)
• Platinum (90%/10%)
• There will be essential health benefits in each plan – mandated by the federal government.  These could change but currently include: doctors, hospitals, prescription drugs, mental health, and preventive screenings.

• The premiums that a person pays will be limited to four distinct factors: age, tobacco use, family status, and geography.  No additional charges or credits can be applied for pre-existing conditions that a person has.
• Minimum network availability must exist for members of the exchange.

The Cost

There is little concrete information regarding cost structure around each plan.  Here are some things we do know:

• Individuals must carry some form of coverage or pay a penalty of $95 (or 1% of their income, whichever is larger.)
• Those income eligible will be able to use tax cuts to help pay for their health plan.  The lowest-income families will have access to free public insurance.  Those who earn less than 400% of the Federal Poverty Level will be eligible for some kind of subsidy.  This means a family of four whose total income is about $92,000 per year will still qualify.
• States have the ability to expand the Medicaid Program so that familes at 138% of the Federal Poverty Level would still be eligible.  Compare that to today’s number which is 64%.

Overall, there are a lot of pieces to the puzzle.  It is important to stay informed as a consumer in this changing marketplace.  Decisions you make today, could have an impact on you and your family far into the future.  For additional information regarding National Healthcare and how it impacts you, visit our website or contact Heather Mosher | 906.315.7235 | heatherm@vastsolution.com.