December 23 is the last day to apply for insurance on the new marketplace, but many are still confused about the Affordable Care Act (ACA), often referred to as “Obamacare.” With the deadline on Monday some local insurance agents weigh in on the common areas of concern and confusion.
Beth Reitler of Reitler Insurance in Lexington and Ted Wendling of Rinehart-Walters-Danner Insurance separately shared their professional perspectives on the ACA.
What is causing the most confusion?
Both agreed that in their interactions they’ve found that most people don’t have a basic understanding of the law. Often people confuse the ACA and the Health Insurance Marketplace. The marketplace is just one provision of the act. The act is a law and impacts all of healthcare; the marketplace is only used by some healthcare consumers.
“The exchange is just another option, people don’t seem to understand that,” said Wendling.
Some are under the impression that the marketplace is an insurance plan. Some think it is a single-payer government program like Medicare. Neither is true.
The marketplace is a mechanism to identify eligibility for benefits, determine if the applicant is eligible for subsidies, and comparatively shop for private health plans. People have the option to access the marketplace over the phone or through the website www.healthcare.gov.
Employers were mandated to send out a letter to employees in October. According to both agents, the letters were a source of confusion for people. The purpose of the letters spans both the ACA and the marketplace. In the event that an individual employee’s health care coverage costs exceed 9.5 percent of their income, that employee may elect to purchase coverage on the exchange.
When asked how this applies to family coverage the agents differed.
Both were presented with the example of a family of four where only one of the two parents had access to employer coverage. If the employee only insured himself the insurance was 9.3 percent of his income, thus he individually wouldn’t qualify for a marketplace plan. But if he covered his family on the employer plan the insurance would cost 56 percent of his income.
According to Reitler the entire family would not have access to the marketplace plan, according to Wendling the family would. It seemed logical that calling Healthcare.gov would clarify the issue.
The representative who answered the phone wasn’t sure how that would be handled and consulted with a supervisor. According to the supervisor the employee would have to be insured through the employer plan because he would not qualify, but the remaining family members would be able to get coverage and the subsidy through the marketplace.
Many people who were previously uninsured due to pre-existing conditions are now able to get healthcare coverage, but another misconception is that those individuals have to purchase their coverage on the marketplace.
This is where the distinction between the ACA and the marketplace comes in. Under the ACA, pre-existing conditions cannot exclude people from getting coverage and the law applies to all plans. That means any insurance plan is an option to those consumers, they may select a plan off or on the marketplace; but if they wish to use a subsidy, that program only applies to marketplace plans.
People whose income is less than 400 percent of poverty level likely qualify for a subsidy, but few seem to understand that provision of the program.
“The subsidy is very confusing for people. They don’t seem to understand how it works, they think it’s like Medicaid, and it’s not, it’s tied to your taxes,” said Reitler.
Consumers get to choose how their subsidy is dispersed. They may choose to have the money sent directly to the insurance company monthly, thus decreasing their upfront premium costs, they may choose to receive the subsidy as a tax refund, or they may select a combination of the two.
Even the deadline seems to be a source of confusion.
“People don’t seem to understand the time sensitivity, now this will work like employer coverage or Medicare,” said Reitler.
In the past private insurance was available at any time, but now for marketplace plans there will be open enrollment periods. “If people miss the December 23 deadline they will not have coverage on January 1,” said Reitler.
The enrollment period does extend through March, but effective dates will be pushed back accordingly. Neither agent could definitively pinpoint when coverage might start for individuals enrolling after December 23.
Who should use the marketplace?
The marketplace is available to anyone who qualifies and is the only option for those who wish to take advantage of the subsidy. The median household income in Mansfield is $42,894 and any individual with an income of $45,960 or less qualifies for a subsidy, thus the majority of Richland County residents likely qualify if the other criteria are met.
Both Reitler and Wendling agree that the following people could benefit from the marketplace: the uninsured, people with pre-existing conditions, people whose employer coverage is more than 9.5 percent of their income, those already on the private insurance market, and people who qualify for a subsidy.
Those who likely won’t benefit from the marketplace include people who have employer coverage that is 9.5 percent or less of their income, people with incomes 400 percent above poverty level, people who do not qualify due to medicare or medicaid eligibility, and people who select off-marketplace private insurance.
Both agents recommend that people at least explore the marketplace as an option.
“We run all of our clients through to see if they can get a better deal, some do, some don’t, but we always start there,” said Wendling.
“For some of the people who are currently uninsured, they are surprised how little they will pay after their subsidy, but of course that only applies to those who qualify for subsidies,” said Reitler.
The US census data indicates that a typical family in Richland County earns $42,894 and has three people. According to the subsidy calculator created by the Kaiser Foundation, that family would pay $249.75 per month for a silver plan, or $136.42 per month for a bronze plan.
Where can people get trustworthy information?
A few weeks ago, Ohio Attorney General Mike Dewine’s office released a statement warning consumers about ACA and Obamacare scams. In addition to outright scams there is a great deal of misinformation being disseminated.
Reitler and Wendling gave the same advice.
There is no reason why the government would call a person on the phone or otherwise solicit personal information for this program. The marketplace is designed to be a consumer initiated experience. Brochures, flyers and other items are easy to make and distribute, just because something is in print doesn’t make it true.
“If you’re not sure about something, call an insurance agent,” said Wendling, “There’s just no reason why anyone would be cold calling you.”
“Be careful listening to the soundbites, it’s very misleading,” said Reitler.
Reitler adivsed people to explore the information on the healthcare.gov website. She has found the information to be fair, accurate and unbiased. Wendling’s only frustration with the site is that when people click on the “get local help” section of the website they are directed to non-profits rather than highly trained insurance agents.
What do the agents advise?
Both agents stressed how much training they have received to prepare for this transition. Insurance agents go through a stringent licensure process. These agents also had additional training in the particulars of the ACA.
“I’ve been training in this for over a year,” said Reitler.
One area of confusion for many is the role of insurance agents.
“We’re not seeing a lot of people interested in the marketplace, most don’t seem to know that they can go through an agent,” said Wendling.
“It doesn’t cost more to use an agent; I don’t think people understand that,” said Reitler.
According to Reitler some of their customers have been frustrated with the customer service and level of knowledge of employees at the marketplace call centers and online. And Wendling is concerned that those workers aren’t capable of providing the level of service an insurance agent can since they have less training.
“An agent can walk you through the process and help you make an informed decision,” said Reitler, “We’re here to help.”
“We run all of our clients through to see if they can get a better deal, some do, some don’t, but we always start there,” said Ted Wendling.
