By Burton Speakman
Here’s how the Affordable Care Act works:
After Jan. 1, 2014, you either must have health insurance or you must be prepared to pay a fine when tax day comes in April 2015.
Despite a nearly three-year buildup, many people are confused about the so-called individual mandate and how the insurance exchanges will work.
Republicans in Congress have pushed for a delay in the individual mandate in the ACA to mirror the one given to businesses. On Friday, the House voted to defund the ACA altogether.
U.S. Rep. Tim Ryan of Niles, D-13th, said he doesn’t know enough about the progress that the administration is making in setting up the national insurance exchange to know if a delay in the individual mandate will be necessary.
It isn’t fair to the public that the individual mandate remains in effect while the business mandate was delayed by a year, said U.S. Rep. Bill Johnson of Marietta, R-6th. Johnson voted Friday to defund ACA.
It isn’t reasonable to expect a member of the public to understand everything included in the ACA, Johnson said. Bureaucrats in Washington are still determining elements of the law.
Though employers expressed relief that the business mandate was delayed, individuals have received no such delay and will soon be faced with a barrage of options when open enrollment in the exchanges begins Oct. 1.
A large number of people would qualify for some type of subsidy on insurance through the exchanges. Anyone who makes between 100 percent and 400 percent of the federal poverty level would qualify for a tax-credit subsidy.
The federal poverty thresholds are currently $11,490 for a single person, $15,510 for a couple, $19,530 for a family of three, and $23,550 for a family of four. This means that a single person who makes up to $45,960 or a family of four that earns up to $94,200 would receive some level of subsidy.
Those who earn less than 100 percent of the poverty level could be eligible for Medicaid — the government’s health-care program for the poor, disabled and children — if Ohio chooses to expand coverage to some 275,000 people. Until the General Assembly votes to expand the program, some of the state’s poorest will receive no help and not be eligible for subsidies on the exchanges.
Last year, the U.S. Supreme Court voted to uphold the individual mandate, but it overturned the requirement that all states expand Medicaid coverage, leaving each state to decide what was once a major provision of the law before it was struck down.
In Mahoning County, the typical family, which has just more than two people, makes $40,570, according to the U.S. Census Bureau. This family would receive a tax subsidy of $132 a month and pay an estimated $284 a month for a mid-level health insurance plan, according to information from the University of California at Berkeley Labor Center.
“Almost one-third of the population will be eligible to receive some type of discount on their health insurance,” Ryan said.
In Massachusetts, the only state that has an operating exchange, a single person who is 30 pays between $246 a month and $412 a month on the exchange. Meanwhile, 60-year-olds would pay between $436 per month and $761 a month if they make more than $34,476 per year and are not eligible for a subsidized plan. For a family of four, the income level to qualify for a subsidized plan increases to $70,656 per year. The Massachusetts plan provides subsidies only for those at 300 percent of the federal poverty levels or less. The subsidized plans range from no cost to a high of $182 per month and are dependent upon income. The numbers will be different in Ohio, and subsidy thresholds are more under the ACA.
Costs could leave some to consider paying the fine instead of buying insurance.
In the law’s first year, the fine would be about $90 and would progress from there to $695 a year when the fine is fully implemented in 2016, said George P. Millich Jr., an attorney with Harrington, Hoppe & Mitchell in Youngstown.
Things might not improve for the public in 2015 when companies with more than 50 employes have to offer insurance to employees or start paying a fine.
A number of companies are considering reducing workers’ hours to stay below the 50 full-time employee requirement to be a large employer that has to offer insurance, Millich said.
“There are also companies that are looking at it solely as a financial decision and consider the fine to be a fixed cost,” he said. “There will also be a lot of employees who currently opt out of their employers’ health insurance who will now want to opt in.”
Employees also won’t be able to rely on their employers for information because, in a lot of cases, the employers aren’t sure exactly what will happen, Millich said.
The positive aspect of the act is that it is expected to greatly increase the number of people who carry insurance, though educating them about the exchanges and what options are available remains a challenge.
The U.S. Department of Health and Human Services has estimated that the law will provide an additional 97,000 of Ohio’s young adults with health insurance.
The public also won’t be able to rely on their family doctor to tell them about how the exchanges work.
Most doctors don’t know enough about the exchanges to provide any information to the public about plans, said Dr. Dominic Conti, who practices in Youngstown.
Part of the issue is also going to be patient choice, including how long people are locked into the health plans they chose, he said
“Hopefully, there will be some option for people to change plans and maneuver within the system,” Dr. Conti said.
Navigating the exchanges could be challenging for people who are not familiar with using the Internet, Millich said.
“There are a lot of filters and other things on the side of the [web] page that could be confusing for some people,” he said.