New Health Exchanges: What You Need To Know

On October 1st, online health insurance exchanges open up as part of the Affordable Care Act. Kaiser Health News' Mary Agnes Carey speaks to host Michel Martin about what will change, and how you can prepare for the roll-out.

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MICHEL MARTIN, HOST:

I'm Michel Martin and this is TELL ME MORE from NPR News. Later, we'll talk about two provocative new studies that challenge some long-held assumptions about achievement in this country. We hope you'll stick around for those conversations. First, though, we want to talk about a major part of the health care law that will go into effect in just two months. Starting October 1st, many Americans will be able to sign up for insurance through online exchanges. But if you're not exactly sure what they are or what you should be doing to prepare, you're not alone.

When we asked if anybody had questions about this on our Facebook and Twitter pages, we got more than 500 questions or comments in one day. So we're going to try to start sorting through those. We've called Mary Agnes Carey. She's a senior correspondent at Kaiser Health News. That's a news service that's not affiliated with Kaiser Permanente. And she's been one of our trusted guides on the Affordable Care Act and she's back with us now. Welcome back. Thanks so much for joining us once again.

MARY AGNES CAREY: Thanks for having me.

MARTIN: Ready to dig in?

CAREY: You bet.

MARTIN: OK. So just, but - I do want to ask you about this. We mentioned there's a recent poll from the Kaiser Family Foundation that found that nearly half of Americans - 45 percent - have not heard anything about these health exchanges. So just start with the basics. What are they and why do they matter?

CAREY: They're online marketplaces where eligible individuals and small businesses can sign up for coverage starting in October 1, and this is coverage that's in effective in January 1. And what you'll be able to do is go online, look and see what's offered where you live, how much does it cost in premiums, what are your copays, your deductibles.

You'll also be able to answer a variety of questions about whether or not you qualify for a subsidy to help you with coverage, or a subsidy to help pay with - for your copays or deductibles or whether you qualify for the Medicaid expansion in the health law.

MARTIN: Where do you go? Where do you go online to?

CAREY: You could start - Healthcare.gov is the federal website, right, where you could go and they can help direct you to your state exchange. Now some states are doing exchanges, some are not. But you could also Google your state, health insurance exchange, Affordable Care Act and that may take you directly to your state's site.

MARTIN: And we, as I mentioned, we got more than 500 comments and questions from NPR listeners through Facebook and Twitter. We'll just get as many as we can today. And let's start with Janet Carroll (ph) she's at Haines City, Florida and here's her question.

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JANET: My husband and I pay almost $12,000 per year for our health insurance policy, we're self-employed so will there be any better policies available or will it be more of the same?

MARTIN: We picked this in part because we got so many questions like this. People are wondering what will change for people who already have health insurance, especially if they don't care for it and if they want better options.

CAREY: Right, now this particular caller is self-employed, so that means they're going to be able to buy on the exchange. So starting October 1, you'll be able to go on and look and see what's offered. Chances are, I'm assuming $12,000 means $12,000 for their premium, so there's going to be different levels of coverage - the more generous coverage you get the more you pay. But my guess is they will have more options to pick from and to see, and they may also qualify for a subsidy to help them pay for their coverage.

MARTIN: And to that point, if you have low income, are there specific benefits that will help you?

CAREY: Right. Up to 400 percent of the poverty line you can get a subsidy. If you're at the poverty line that's - up to 400 percent is about $4,600 for a single person, and about $94,000 for a family of four. So you might qualify for a subsidy to help you get coverage. They're done on a sliding scale, the lowest of that at a 135 percent of poverty and above, that's about $16,000 for an individual. They would have to pay just a small percent - maybe 2 percent of that premium.

As you get up to that 400 percent of poverty they might have to pay up to about 9.5 percent but they can get some help with the premium and then also if you're at 250 percent of the poverty level, that's around $29,000 for an individual, around $58,000 for a family of four, you might get some help with your deductibles and your copays. 'Cause as we know, insurance isn't just the premium, it's your out-of-pocket costs, your deductibles, and your copays too.

MARTIN: So it really does pay to check?

CAREY: Absolute...

MARTIN: ...It really does pay and you shouldn't assume that if you're above the poverty level that there's no help for you. You should definitely check.

CAREY: Absolutely.

MARTIN: Now if you're uninsured - there was a lot of talk about how people would be fined if they didn't sign up. Is that the case? If you're uninsured do you have to sign up by a certain point or be fined?

CAREY: For most Americans, and there are some exceptions, for most people, starting January 1, if you don't have health insurance, your penalty is going to be $95 or 1 percent of your income, whichever is greater. But that's going to increase.

For example, in 2016 that goes up to $695 or 2.5 percent of your income. They're trying to really incentivize to get everybody into the system, but the fact that it's so low the first year is causing some concern that people might look at it and say, you know what, 95 bucks - maybe that's less than 1 percent of their income, maybe even at 1 percent of their income - people may decide, I'm going to wait and take a pass. So that's something that experts are really watching.

MARTIN: If you're just joining us, we are answering your questions about the new health insurance exchanges. That is the part of the Affordable Care Act that goes into effect October 1. With me is Mary Agnes Carey, senior correspondent of Kaiser Health News. We got a lot of questions from young adults. Here's Gary Norbrutton (ph) of Webster, Texas.

GARY: I'm 28, male and in good health. I do not have health insurance currently. Will somebody of my age have a cheap catastrophic coverage option? If so, how cheap are we looking at?

CAREY: You will have a cheap catastrophic option. I don't have numbers for you now because we're just at the beginning of states unveiling their rates. And for the federal exchanges, those rates aren't going to be available 'till September 1.

But here's the key thing that I think you need to know, a catastrophic coverage - it's going to have cheaper premiums, but there're fewer benefits and you're going to have higher copays and higher deductibles. And so we're just talking about people doing their homework. I think for this person, and people like him, you need to look at this young invincible policy - is what they're going to call it, right. Compare that - now you can't get a subsidy, if you get a young invincible policy.

MARTIN: I like a young invincible policy.

CAREY: I like it, too. We were all there once, right? But if you - see what's better. Do you get a better deal with that catastrophic plan with no subsidy, or if you go into the exchange - you're buying on your own - do you get a better deal? Do you get a subsidy? Do you get any help with copays? You need to do a little comparison shopping.

MARTIN: And do you like to gamble?

CAREY: Well, it is - insurance is always risk, you know, base of risk. So there you go.

MARTIN: And remembering again that young adults can now stay on their parents' insurance until age 26. That was one of the first provisions of the Affordable Care Act to go into effect. So up to the age of 26 you can stay, right, on your parents' insurance.

CAREY: You can stay unless you have a job and you have an offer of coverage from your employer, then you can't do that. But if you don't have insurance, your employer doesn't provide it, you can stay on the parents' plan until 26.

MARTIN: Another listener, Gerardo Ramirez (ph), wrote in saying that he and his husband both have pre-existing health conditions, so they've had some trouble finding private insurance. He asked quote, will our history of pre-existing conditions be used against us, if we get new insurance with the same companies we had in the past?

CAREY: No. Starting January 1, they can't say they're not going to cover you for a pre-existing condition or they're not going to cover that condition. But the only way that an insurer can vary premiums are based on things like, do you smoke, right. An insurer could charge you one and a half - the ratio of 1.5-to-1 if you did smoke.

If you have a larger family, depending on your age, the ratio is 3-to-1. They couldn't charge you three times as more as the least expensive policy, but that's a lot better than the current market, which in some states it's as high as 5-to-1. So age, tobacco, family size and geography can be variants but they cannot deny you coverage based on a pre-existing medical condition.

MARTIN: Even if it's the same company that you're with now?

CAREY: Well, that would be my understanding because they've got to comply with the ACA and that's the requirement.

MARTIN: What do you suggest that people start doing now to prepare for this October 1, you know, opening? I know that there's been different opinions about this, I mean, about whether there's going to be kind of a rush or not. I mean, based on the questions that we're getting, it seems like there's a lot of interest in this. So what could people be doing now to get ready for this.

CAREY: Most of us don't really pay attention to our health insurance. So what I would urge people to do is look at, what do you pay for a premium? What are your copays? What are your deductibles? What does your coverage cover right now? What would you like it to cover? Go to - you can go to the subsidy calculator - the Kaiser Family Foundation has a great subsidy calculator.

You can go to - the web address is www.KFF.org, and you could type in your income. Find out, are you eligible for a subsidy for a premium, for the copays and deductibles, is your income low enough and is your state expanding Medicaid where you can get to the Medicaid expansion? Find those things out now, so when those rates go up online, you are armed, and you can kind of get out there and look and do your comparison shopping to find out what your current policy has and what might be out there for you that's better - more of what you need.

MARTIN: There was a lot of discussion in the run-up to the passage of the Affordable Care Act, and even continuing, that employers who are currently providing coverage would drop people and force their employees to go into these exchanges in order to save money. Is there any evidence that that's occurring?

CAREY: There's anecdotal evidence that it's occurring. There are other - there's other evidence that it's not a widespread trend. One thing people are watching is this requirement - now it's not going to be in place for a year now, but it's called the employer mandate, that says if you have 50 workers or more, that you'll have to offer insurance. A lot of people are thinking, well, maybe companies won't expand, they won't go beyond that 50 mark, so they're not required to do that.

But the concern that employers will dump people and put them in the exchange, it's out there. You do hear pockets of stories of employers doing it. You also hear other employers saying, you know, I really don't want to do that. I want to offer coverage for my workers. I do it now, I'm going to keep doing it. So it depends on what you're looking at. And there are no specific trends I know of - a widespread trend on this.

MARTIN: Is every state required to offer this kind of exchange?

CAREY: They don't...

MARTIN: We know that there are certain state leaders who have been extremely reluctant to participate in this act. Is every state required to participate, to offer something, no matter where you live, should you be able to find some kind of health insurance through the exchange?

CAREY: If your state doesn't offer it - 16 states in the District of Columbia, for example, are doing their own exchanges. But you've got the federal government is running the exchanges in 27 states, and in seven states they're partnering with state officials. So no matter where you are, you'll have choices, but your state may not be running that exchange, it may be the federal government.

MARTIN: Well, we understand that there are many, many questions that people continue to have. We are going to continue to try to collect these questions through Facebook and on Twitter. And Mary Agnes, we hope you'll come back and answer as many of them as you can. Let's keep it coming.

CAREY: Thank you.

MARTIN: Mary Agnes Carey is a senior correspondent at Kaiser Health News. Once again, that's a news service. It is not affiliated with Kaiser Permanente. She was with us here in our Washington, D.C. studios. Mary Agnes, thanks again.

CAREY: Thank you.

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