Obamacare Insurance May Cost You Less In 2018

It’s absolutely essential that Iowans needing individual health insurance coverage for 2018 shop the Affordable Care Act (ACA) marketplace. Some Iowans may be pleasantly surprised to see that they may actually be paying less in 2018 than they are currently paying.

According to the Kaiser Family Foundation, in some counties in Iowa a 40 year old making $20,000 choosing the Silver Plan will see a reduced premium in 2018. One of the navigators signing up Polk County residents this past Saturday in Des Moines reported that about half his customers qualifying for subsidies were getting a premium price lower or equal to last year’s prices. Single individuals can qualify for subsidies with an annual income up to $46,680. A family of four qualifies for subsidies with incomes up to $95,400.  Approximately 50,000 of the 72,000 that bought ACA insurance in 2017 qualified for subsidies.

You might assume from all the negative coverage about the ACA “Obamacare” that you can’t get affordable individual health insurance coverage for 2018. Many consumers actually believe that the ACA has been repealed and is unavailable for 2018. Other consumers may assume that they can’t afford health insurance in 2018 because Medica, the only insurance carrier offering coverage in Iowa, took a 57% premium increase. The other misconception is that President Trump ended the subsidies that lowered the cost for many ACA consumers.

None of those assumptions are accurate, and for the majority of Iowans buying ACA insurance and qualifying for subsidies through Medica, they may get a better deal than they got in 2017.

For the 72,000 Iowans that have purchased insurance on the ACA in 2017, they can shop the marketplace exchange by going to Healthcare.gov and review their choices. New customers requiring individual insurance coverage can shop as well. Consumers can also call for information on affordable plans at 1-800-318-2596.  It’s simple to shop on-line by entering your yearly income, zip code, gender, age and whether you need individual or family coverage. That action will provide the qualifying subsidy; and by continuing on the website, will provide multiple plans with net premiums for each to choose from. Open enrollment began November 1 and continues through December 15.

It’s a bit complicated to explain why premiums may be lower for many of the 72,000 Iowans that purchased insurance on the exchange in 2018. First, it’s important to understand there are two types of subsidies under the ACA. There is a direct premium tax credit subsidy that lowers the cost of premiums.

As an example: A family of four with an income of $50,000 gets a subsidy of $1,143, which results in a net monthly premium of $21-$426 depending on which of five plans they choose. The plans vary in price due to differing deductible amounts and co-pays. As Medica raised their premium by 57%, the premium subsidy went up as well. The result is a net premium that in many cases is less than or equal to last year’s premium. The premium subsidy applies to all plans (Bronze, Silver and Gold) within the income guidelines.

The second subsidy is a Cost Sharing Reduction (CSR) that subsidizes the amount a consumer would pay toward their deductibles and co-pays. This subsidy only applies to consumers that choose the Silver Plan. As an example, in 2017, if out-of-pocket maximum was $7,150 for any ACA individual plan and $14,300 for a family plan. With the CSR subsidy, out-of-pocket maximum would range from $2,250 to $6,600 for an individual and from $4,500 to $13,200 for a family, depending on their income. This is the subsidy that President Trump canceled.

However, the ACA law requires that consumers receive this CSR subsidy. Since insurance companies must offer this CSR to their Silver Plan customers, the insurance companies simply raised premiums to compensate for Trump’s cut. Medica simply raised their premiums from 43% to 57% to make up for this Trump cut.

The result is a higher premium for consumers but it is in turn covered by the higher premium subsidy, resulting in little or no increase in net premiums to the consumer. It’s a bit complicated, so leave it at this – Trump cut the subsidies to insurance companies, but in most cases it didn’t effect these consumer net premiums.

The other change affects the network (doctors and hospitals) choices. It appears Medica only has agreements with Unity Point. If consumers have been using doctors and hospitals outside of the Unity Point network, they may need to change. For instance, it appears Mercy would be an out-of-network provider.

Here’s the really bad news! For those consumers with incomes above the level that qualifies for subsidies, they will be much worse off for 2018. The remainder, approximately 20,000 of the 72,000 pay the full Medica premium increase without subsidy assistance. They are the individuals that are really suffering and may not be able to afford the premiums. They face a premium increase of 57% and can’t get any assistance with these premiums.

These are the Iowans that have been left out thanks to the Republicans’ unending attacks on the ACA and Trumps cutting of subsidies to insurance companies. Many have reported that they simply will go without insurance coverage because of the unaffordable premiums. That is unacceptable and Democrats in the Iowa legislature have a proposed solution to provide an affordable choice for these 20,000 Iowans needing affordable coverage.

Iowa Senator Matt McCoy and Representative John Forbes are going to introduce legislation in January to offer these consumers an affordable public option to compete with Medica. It will require legislative action and Governor Reynolds cooperation to give these 20,000 plus Iowans premium relief. The earliest that this could be implemented if Republicans cooperate would most likely be early in 2018.

by Rick Smith
Posted 11/8/17