Navigating The New Health Care Options

Navigating The New Health Care Options October 1, 2013

I know relatively little about health insurance. I have not had it since I automatically had to drop off whatever coverage I had through my parents until my early twenties. So when I learned that a friend of mine’s job is to explain changes in the health care law to people, I decided to reach out for his advice. I figured I would make an interview out of it for my blog since the questions of an ignorant person trying to work through his situation’s particulars might shed light on how things work in more tangible ways than other articles I have been seeing. So this is my interview with Ayaz Ahmed. He works for Community Health Advocates (CHA) the New York State designated Consumer Assistance Program under the Affordable Care Act at Community Service Society. You can contact CHA at 888-614-5400 with any questions regarding your coverage in New York State 9am-4pm, Mon-Fri.

Daniel Fincke: To start, I want you to walk me through my own actual situation right now. I live in New York and work multiple part time jobs, including teaching enough online classes of my own making to count as partial self-employment. I am 35 and have never had any major illnesses or injuries (except for a lost permanent front truth in an accident at 9 that led to a lot of orthodontics). Because I was a poorly paid graduate student with no benefits for 10 years and now I am a poorly paid adjunct with no benefits and a high debt burden from graduate school, I have never had health insurance. I think it is possible to get health insurance through one of my current teaching jobs because I recently became eligible through time served. But even if I can get it, this teaching job (like all adjunct teaching jobs) is not guaranteed for the long term.

Am I a candidate for these “exchanges” of the ACA? And if so, how should I go about assessing their advantages against my potential benefits at one of my teaching jobs? And where exactly do I go to investigate the exchange that is best for me? Is there one place I can go to comparison shop?

Ayaz Ahmed: Indeed. It is exactly Americans like you that this reform is meant to assist. If you did not have this one option of employer based coverage you will be lost in a sea of insurance option each more expensive than the other. Right now a plan that might be as comprehensive as employer based coverage could cost you more than a $1,000 a month in New York State. Also, in case you actually had a chronic illness or actually needed medical care an insurance company would not be required to cover your “pre-existing condition” for a year. If you have a choice of this employer based coverage, and you like it, then you can take it. You can also opt out of it if it costs you more than 9.5% of your annual income (many people pay up way more than that for their employer based coverage), or if this healthcare coverage is inadequate, you can go to the Exchange (in New York State it is called “The Marketplace”).

Let’s say you get this employer based coverage and then you lose your job and as a result this insurance. You can still go to the Exchange and get coverage. Prices and options can be compared at the following website: Also, you can go to from anywhere in the US and that website, depending on the State you live in, will guide you to the appropriate resource in your State. States that are not running their own Exchanges will have the federal government run their Exchanges for them (New Jersey, Georgia, Florida etc.)

The website will also provide you with resources in your community. All over the country there are trained Navigators who are certified to assist you with any questions you might have about your coverage. They are totally impartial and will explain your options to you in detail and help you figure out which option works better for you.

Regarding the example that you used. Dental and Vision coverage is part of the “Essential Health Benefits” only for children and up to the age of 19, and States can extend that to a higher age. So, in other words, for someone like you Dental coverage is not part of the medical insurance package that you are getting on the Exchange and is not part of the “Essential Health Benefits” in these standard policies. You can get a “non-standard” plan that may offer some dental benefits and again, you can discuss that with a Navigator to see what is on offer and know the limits of such benefits. Also, to get the Dental policies available on the Marketplace you have to have a medical policy too.

Daniel Fincke: When you say that many people pay more than 9.5% of their annual income in health insurance, is that including the amount of their income that is paid to them by their employers as benefits rather than as wages or salary? Or do you mean on top of that still another 9.5%?

Ayaz Ahmed: This means 9.5% of their annual gross income.

Daniel Fincke: For these exchanges to create competitive rates with private insurance, don’t there need to be a lot of people involved? Will the rates start out exorbitantly high since this is brand new and hardly anyone is in yet? Or, if they’re fixed arbitrarily affordably to start, in order to get them rolling, is there any guarantee that low enrollment wouldn’t lead to them going up over time?

Ayaz Ahmed: This is of course a completely new thing and I am sure there will be kinks in the system. However, as things stand right now, the rates we are seeing on the Exchanges are remarkably lower than anything we have had in the past. Take for example the cheapest plan on the Platinum level in New York City – Platinum level plans are the ones with higher monthly premiums and lower out-of-pocket costs with a maximum out of pocket capped at $2,000 in a year for a single person. The cheapest plan I see on the Exchange / Marketplace is $443 per month (that is the full cost without any subsidy). That is a serious low. The same plan at Silver level is about $299 per month.

However those are the full premium costs. If you qualify for the APTC (Advanced Premium Tax Credit) – which is anyone in the US who is anywhere from 100% to 400% of Federal Poverty Level (FPL) – or CSR (Cost Sharing Reduction) – which is only on Silver level plans and is available to anyone up to 250% of Federal Poverty Level (for a single person up to $28,725 annual income), you will not be paying the full price as government will be subsidizing your costs. Going forward, I would err on the side of optimism and hope that when it is affordable an average person will actually take advantage of it.

Daniel Fincke: Break that into layman’s terms, what is 100%-400% of the poverty line?

Ayaz Ahmed: For example a single person making $11,490 is at 100% of FPL. Someone like this single person will have free healthcare through Medicaid. Medicaid is being expanded to 138% of FPL in 17 States, and 7 are considering it (another 27 are opposed to expansion of Medicaid, but that is another issue, however Exchanges in those States will run and will be run by the Federal government). This person could make up to $15,856.20 (138% FPL) and still qualify for Medicaid and keep their healthcare coverage at no cost to them. This is great news for low income Americans. Now, when you go over that limit and all the way up to $45,960 (400% FPL), you will still get APTC (Advanced Premium Tax Credit) based on your income; the lower your income, the higher the APTC. You can then take this APTC and apply this to the plan you want.

I will highlight this with an elaborate example: You are over the Medicaid eligibility because you make $17,235 (151% FPL) a year, you can enter your income in the portal at home or with a navigator, but if you are confused about it, and I am sure many people will be, you can seek a Navigator to assist you – walk in, drop in or make an appointment. Your APTC will be calculated and it will immediately be clear how much of it you qualify for. Let us assume that the Silver level plan suitable for you is $299 at full premium, and your APTC is calculated at $250 per month. You will only pay $49 per month and the rest will be covered by APTC. Also, you will get a 2nd Cost Sharing Reduction (CSR) subsidy. So now that you have this plan it comes with deductibles and co-pays and co-inusrance, you will get assistance with those through the CSR subsidy and your out of pocket costs will significantly decrease. This second subsidy will remain available to you at a “sliding scale” all the way up to $28,725 (250% FPL) for a single person. However the APTC will remain available for a single person up to $45,960 (400% FPL).

I know it is a lot of jargon and math and that is exactly why in-person assistance will be very useful going into the reform. So I would say seek out a Navigator. Also, the enrollment goes all the way to March 31, 2014, so there is plenty of time for people to figure this out and make informed decisions.

Daniel Fincke: Do these people serving as “navigators” meet with you online or in-person? Do they charge for in-person meetings? What do you mean that enrollment ends March 31, 2014? Won’t people be enrolling year in and year out? Will we have to pay a tax penalty if we don’t have insurance by the end of 2013? While we’re on that subject; how much more in taxes will I have to pay if I don’t pay for health insurance. Will it be equivalent to the same cost as if I had bought in and gotten insurance? Finally, what is the lowest rate available? You mentioned the Platinum $423 a month and the Silver $299. I get hit so hard with taxes because I’m single and live in New York City and now since I need to find my own students outside the universities to supplement their poor pay, I am getting hit with higher taxes for self-employment, having to pay the employer’s share of my FICA, etc. I’m paying effectively at least 33% of my income right there once state, federal, FICA, and city are accounted for. Then there’s my credit card and student loan debt and business expenses trying to start up my businesses outside of academia. All of that plus the simple cost of living in New York City means that adding another $3,600 a year in health insurance costs or some equivalent extra tax means having to earn another $5,400 pre-taxes just to have the money post-taxes to cover it. That’s a lot of money that I need to scrape up part time job by part time job, atop what I’m already doing. That’s an entire one and a half extra adjunct classes atop the multiple I already do just to add health insurance to my budget.

Ayaz Ahmed: The meeting with a Navigator will have to be in-person. All Navigators must provide these services for free. Open Enrollment ends on March 31st, 2014, but there will be exceptions that will provide you with enrollment throughout the year. Loss of employer based coverage would give you an enrollment period anytime in the year for example.

Also, regarding APTC or CSR, your student loan payments will NOT count against you as they are deductions on your tax returns. Once you are on the Marketplace portal it will actually ask you these questions. The calculation will be based on your Modified Adjusted Gross Income – of course I hate to drop another confusing term.

Again, it seems like there are so many choices and prices and so many “metal levels”. Someone like you who might have to pay full premiums could go from a cheap plan at Bronze level at maybe as low as $307 per month in New York City (low premium cost, and high deductible which by the way still has an out-of-pocket maximum), to the cheapest plan at $443 on Platinum level (high monthly premium and low out of pocket costs). It will depend on what you think your medical needs are, how much you can afford, and the good news is ALL of these plans have preventive visits at no cost to you at all. So if you believe that all you need is decent coverage for your normal medical needs and in an emergency, you can pick what is best for you. I would say again, that all these questions can be answered by a Navigator. So for anyone concerned about these question, give yourself an hour and meet up with a Navigator in your area.

The penalty next year if you do not have coverage is $95 for a year, but given a choice between affordable coverage and a penalty, I would take the former.

Daniel Fincke: When you say that preventative visits are fully covered, what does that mean? No co-pay for physicals, routine mammograms and colonoscopies, etc.? And are there any other new benefits or guarantees that his law provides that most people aren’t aware of but need to know about? And are there any special drawbacks that come with it?

Ayaz Ahmed: Preventive visits are covered and have no out-of-pocket costs. So all the things you mention above are without any cost to you, except that you actually have to have coverage first. Some of the new benefits are that the insurance companies cannot drop you from coverage, they cannot set limits on your annual or lifetime benefits, “pre-existing condition” will be laid to rest on January 1, 2014, and mental health services are also without limits on inpatient / outpatient services. Also, the out-of-pocket maximums will save you from unpredictable costs. We have never had these guarantees and these protections in the past. With maximum out-of-pocket limits we should finally be able to say goodbye to those medical bankruptcies that have derailed the lives of many people in America. So Obamacare is indeed a sweeping attempt at fixing some of the most egregious practices that were common.

Daniel Fincke: There’s no limit on mental health coverage? All visits to a therapist have to be automatically covered?

Ayaz Ahmed: Yes, a standard plan cannot put such limits on your coverage as long as long as you need them. If you are hospitalized they cannot say, “your annual 30 day limit as mental health inpatient has been met and we will not pay for this service anymore.”

Daniel Fincke: Lastly, do I understand you right that the exchanges are open to anyone, even those who presently have insurance and want to see if there is a more competitive option on the exchanges? Should everyone investigate just to make sure the exchanges are not more affordable to them?

Ayaz Ahmed: They are open to US citizens and legal residents. Your coverage from an employer must be unaffordable or inadequate for you to join the Exchanges and to get APTC or CSR. Also any eligibility related questions can be directed to 800-318-2596, 24 hours a day, 7 days a week. They should be able to answer your questions or send you the appropriate place in your state where they can help you figure out your eligibility.

Daniel Fincke: So it could be possible that the health insurance through my work is rated too good for me to join the exchanges even if the exchanges could yield me a better deal?

Ayaz Ahmed: That is where the adequacy and affordability comes in. If it meets that criteria – it offers adequate coverage and is less than 9.5% of your annual gross income – you should keep it. If you have this option and you leave it you will not qualify for the APTC or CSR. There are other restrictions too, but when in doubt or have a question, please call the number I gave above. Remember that with your employer based coverage your employer pays a portion of your premiums, and if you go on the Marketplace, your employer does not need to, and you must weigh those options carefully.

Your Thoughts? Your Questions for when I might talk to Ayaz again?

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