Editor’s note: This story is the first of a two-part series on Montana’s new health insurance marketplace, a key component of the Affordable Care Act, President Barack Obama’s signature health care reform law.
HELENA – Come October, Montanans should be able to shop for health insurance on a new Internet marketplace – and anywhere from 150,000 to 200,000 Montanans will be eligible for federal subsidies to help pay for the policy.
The subsidies should make health insurance available and affordable for tens of thousands of Montanans without it, say supporters of the Affordable Care Act, also known as “Obamacare.”
“This means many people who were struggling to pay for health care can have coverage,” says Kathleen Stoll, health policy director for Families USA, a national consumer group and major backer of the ACA.
Yet surveys also indicate that the majority of people eligible for the subsidies don’t even know about them.
“Half the nation’s population has no idea of what the (marketplace) is even about,” says Gregg Davis, director of health care industry research for the University of Montana’s Bureau of Business and Economic Research. “And we’re supposed to start signing up on Oct. 1. They have a lot of P.R. work to do.”
This Internet marketplace for health insurance is perhaps the most crucial component of the ACA, which requires all Americans to have health insurance starting next year, or pay a tax penalty.
Each state will have its own marketplace, where consumers who need to buy health insurance can shop for a policy from various private insurers.
In Montana, the federal government is building and running the marketplace. Three insurers – Blue Cross and Blue Shield of Montana, PacificSource and the new Montana Health Co-op – plan to sell policies on the Montana marketplace.
If it works as planned, consumers will enter their financial and family information online, find out if they’re eligible for a subsidy and know how much it is. Then, they can choose a policy and have the subsidy applied to the premium. The subsidy is paid directly to the insurer.
The feds aren’t releasing much information on the status of Montana’s exchange, but say it should be ready Oct. 1, when people can begin signing up and shopping for policies that take effect January 2014.
“We’ve been very hard at work to make sure the data hub is up and running, and will be operating Oct. 1,” says Mike Fierberg, regional spokesman for the federal Centers for Medicaid and Medicare Services. “It’s a way to make sure you can get all of the tax credits you deserve, but not more.”
Anyone can use the marketplace to buy a health insurance policy. But only those with income from 100 percent to 400 percent of the federal poverty level will be eligible for the subsidies.
For a single household, that range is $11,490 to $45,960. For a family of four, it’s $23,550 to $94,200.
The subsidies are highest for those with the lowest incomes. For example, if you’re single and earning $15,000 a year, the law says you’ll pay no more than 2 percent of your income for health insurance.
That’s only $300, so if the cost of a benchmark policy is $5,000, the federal subsidy will pay $4,700 of the cost of your policy.
Yet if you’re earning $45,000 a year, you’re expected to pay up to 9.5 percent of your income for insurance, or $4,275 – so your subsidy on the $5,000 policy would be only about $700. And if you earn more than 400 percent of the federal poverty level, you’d get no subsidy at all.
The law also has additional requirements designed to reduce and limit out-of-pocket expenses for consumers.
Stoll, of Families USA, says policies for those earning less than 250 percent of the federal poverty level will have lower co-pays and deductibles, and that the amount of total out-of-pocket spending will be capped, depending on income.
The big unknown, however, is the cost of the policies available on the marketplace in Montana.
The three companies offering policies haven’t released any numbers yet, and neither has Montana’s insurance commissioner, Monica Lindeen.
Lindeen’s office says it will unveil some numbers soon, based on the filings from the companies.
The cost of a policy will be adjusted according to your age and how much coverage you want. The exchange will offer policies known as bronze, silver, gold and platinum, with platinum having the most generous coverage and most expense.
The amount of the subsidies will be tied to the cost of a silver policy. If you choose to pay more for a gold policy, the subsidy won’t increase beyond what it is for a silver policy. The subsidy would be a higher portion of the cheaper bronze policy.
Stoll says Families USA has been tracking the cost of policies on marketplaces around the country, and so far the group has been pleasantly surprised.
“We were worried about higher rates, because insurers didn’t know what the risk pool would be, for this group of consumers,” she says. “They’ve actually looked pretty good, with some lower than the current small-group market.”
Coming Monday: Who is doing what in Montana to inform consumers about the ACA’s health insurance marketplace and other new requirements?