Tax credits can make big effect in local health-insurance costs

Those who receive insurance through the new health-insurance marketplaces have much to consider in this open enrollment period.

Changing costs and deciding whether to keep existing plans or switch to new ones likely are top-of-mind issues for consumers across the country.

Nov. 1 marked the beginning of the third year of open enrollment in Missouri's health-insurance marketplace. Gina Harper, East Missouri Action Agency navigator and certified application counselor, said in these first few days, she has noticed several people re-enrolling or looking at new plans that may have become more affordable since last year.

That's good news, she said, because it means people are receiving adequate notice about the enrollment period and their options.

It's important consumers ask questions and review plan options each year because of price changes. Higher premiums are likely to cause many to switch plans. How much the increases affect a consumer depends on whether he or she qualifies for tax credits.

A recent report issued by the U.S. Department of Health and Human Services said consumers in Missouri can choose from seven providers and an average of 37 plans in 2016.

"[Nationwide] nearly eight in 10 marketplace-eligible uninsured consumers can qualify for tax credits to help make premiums more affordable, and more than seven in 10 returning enrollees could find plans for $75 or less in premiums per month after tax credits," health and human services secretary Sylvia Burwell said, citing information from the report.

The health and human services department released county-level enrollment data in June. Between Nov. 15, 2014, and Feb. 22, nearly 2,300 people enrolled in Cape Girardeau County, and 88.5 percent of them qualified for tax credits.

Using information from the federal marketplace website Healthcare.gov and the Kaiser Family Foundation, the Saint Louis University School of Law Center for Health Law Studies gathered data comparing premium changes in the Missouri health insurance marketplace from 2015 to 2016.

Data were gathered based on premium costs for a 40-year-old non-smoker earning $30,000 a year. It included costs for such individuals in 10 cities, including Cape Girardeau.

One table compared premiums for the second-lowest-cost silver plan, commonly known as the "benchmark plan." The benchmark plan is used to determine premium tax credits.

In Cape Girardeau, the cost in 2015 before tax credits was $318 per month. The number jumped nearly 15 percent for 2016 to $365. The average percentage change in Missouri was 12.2, according to the information gathered by the university health-law group.

The data show a much more optimistic picture for the silver plan premium costs after tax credits. In each town included in the table, prices dropped from $208 to $206 -- a 1 percent change.

For a 40-year-old non-smoker living in Cape Girardeau and earning $30,000 per year, the lowest-cost bronze plan where no tax credits are applied became more expensive in 2016. It also experienced a nearly 15 percent jump -- from $264 per month to $303.

Again, the price change was in favor of the consumer after tax credits were applied. The monthly cost went from $153 in 2015 to $145 in 2016 for Cape Girardeau. That differs from the average state percentage change for this plan, where the difference was an increase of 2.4 percent.

Because of these fluctuations, consumers need to pay attention to their options and be willing to change plans. As a navigator, that's the kind of advice Harper often finds herself giving to others. When people find themselves unsure about their options, that's where navigators can step in.

"I could help somebody look at plan options, even over the phone," she said, adding a "ballpark figure" could be determined with minimal information, such as household size and income, age and county of residence.

For those Harper has assisted so far in the enrollment period, she said a few have encountered coverage issues.

One of the main issues she's noticed is people falling in the coverage gap. This occurs when a person earns too much to qualify for Medicaid but not enough to qualify for the tax credits.

The Affordable Care Act originally required states expand Medicaid and did not allow those who qualified to be eligible for the tax credits. A U.S. Supreme Court ruling then determined such a mandate was not allowable, meaning Medicaid expansion was optional for the states. Missouri has not expanded its Medicaid eligibility.

Missouri parents qualify for Medicaid at about 19 percent of the federal poverty level. For a family of three, that equals a monthly income of about $318.

Harper said it's not uncommon to find someone caught in this gap.

"That unfortunately happens every single day," she said. "If I see five people a day, two fall in the Medicaid gap."

Another issue Harper sees on a regular basis is the "family glitch." She said it's a problem detrimental to many families.

Eligibility for tax credits is not determined solely by income. It also takes into account whether affordable insurance is offered through an employer. The problem is, the law looks at the cost of coverage for the employee only and does not consider how costly the insurance may be for the employee's family members.

"If spousal coverage is offered, that spouse cannot go to the exchange and get any subsidies. Even if the policy is too expensive through work and they might get subsidies normally, they don't qualify through the exchange," Harper said.

There are some issues to be worked out, but the navigator said she's seen the Affordable Care Act help many people. It's done "amazing things" by providing health-care options to so many, Harper said.

She encourages anyone looking to switch plans or enroll for the first time to act sooner rather than later. The open enrollment period closes Jan. 31. The penalty for not having coverage is $695 -- more than double compared to last year's penalty.

"So it will be close to $700 not to have insurance, so my push is, you might as well at least look and see what's out there," Harper said.

srinehart@semissourian.com

(573) 388-3641

Pertinent address:

Cape Girardeau, Mo.

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Local resources

Local agencies with navigators available for enrollment assistance include:

• The Delta Area Economic Opportunity Corportation (DAEOC): (573) 391-0963
• Missouri Bootheel Regional Consortium in Sikeston, Missouri: (573) 471-9400
• East Missouri Action Agency in Cape Girardeau: (573) 366-0564
• Cross Trails Medical Center in Cape Girardeau: (573) 332-0808

Other agencies may be found at localhelp.healthcare.gov