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Changes coming for the self-insured
With the Oregon Health Insurance Exchange coming online in January 2014, many Oregonians wonder what it will mean to their pocketbooks
January 10, 2013
As the Affordable Care Act moves forward, questions and concerns are abundant as to what it will mean to those who purchase their own health care coverage.
In Crook County, the demographic for an average household income is $79,900 (2011 Economic Development of Central Oregon statistics), and the average resident is 35 years of age. In the new world of health insurance, which will begin in 2014, there are already rumors of soaring health insurance premiums and people paying fines instead of premiums for health insurance. Sorting through the pandemonium can be a daunting task.
Oregon’s Insurance Commissioner’s office is working on a number of regulatory issues as the Affordable Care Act moves forward.
“It’s huge right now, and there are a lot of different issues,” explained spokesperson Cheryl Martinis.
Some of the big projects they are tackling include defining what Oregon essential health benefits packages will look like, and what must be included in every health plan in 2014. She said they have been assisting Oregon Health Authority on defining what Oregon is going to require on this front, because the federal government left that up to the State of Oregon. She added that consumers will have access to a bronze, silver, gold, and platinum plan — which will each cover a percentage of the estimated medical cost.
She added that companies who want to sell insurance on the Oregon Health Exchange will have to have their plans in by April 30 for review.
Oregon’s Insurance Commissioner Lou Savage said there is a combination of factors that is fueling premium increases. Essential health benefit requirements for plans will make policies more expensive. People who are higher health risks and who have pre-existing conditions are also going to become part of the market.
“The benefits are richer as well. I think it’s a combination (of factors),” he added.
The cost of health insurance coverage will be mitigated for people who make between 250 and 350 percent of federal poverty level or less by tax credits. There will also be subsidies for health insurance premiums for some tax brackets. Savage explained that someone who is at 250 percent of poverty level would pay approximately a little more than 8 percent of their income towards health insurance premiums. A tax credit for any amount above that would be on their tax return the following tax year. For people who earn between 300 and 400 percent of federal poverty level, their premiums would be approximately 9.5 percent of their income.
An example would be a family of four, who earn approximately 300 percent of poverty level, or $69,150. They would spend 9.5 percent of their income or approximately $6,900 per year. If they paid above this amount, the difference would show as a tax credit the following year on their taxes. The average annual pay in Crook County in 2011, according to EDCO was $36,993. With a household of two people working, this amounts to approximately $7,030 or $586 per month.
Another example would be the fact that a single-person household could make up to $44,680 to qualify for premium help. A family of four could make up to $92,200 to qualify.
“People need to be aware that — particularly if they are low to moderate income — that there is a good chance they are eligible for these tax credits, and will be able to afford health insurance for the first time,” he added.
Kathy Born, communications manager of Pacific Source, said that insurance carriers are extremely busy as they get ready for the upcoming changes. She noted that they are also working very closely with Cover Oregon, who is basically going to be the exchange platform in 2014.
Born said that they are actively involved in working with the state to get ready for Jan. 1, 2014. A health care reform committee was formed by Pacific Source in 2010 when the Affordable Care Act first was initialized.
“We meet regularly, we talk about the issues, we work through things to be implemented,” she said.
More recently, she added that they have had to get their appropriate filings with Cover Oregon, develop plan designs, and update their eligibility and claims system to work with all the incoming eligibility that they will be getting. There are many details that have to be dealt with, including open enrollment, which begins Oct. 1, 2013.
“For carriers and for Cover Oregon, we really have to be on our toes and done with things and ready to test by July 1, because that open enrollment starts Oct. 1.”
Born added that insurance companies and individuals are not required to go through the exchange. If they want to take advantage of tax credits, they would want to look at the exchange, however.
Pacific Source will be going on the road around the state to educate consumers around Oregon about the upcoming insurance changes, and how these relate to the Affordable Care Act.
“We are not doing this as a marketing thing, so we won’t be focusing on Pacific Source specifics, and we will also try to have a CPA that will be one of the speakers.”