Diligence Pays Off When Shopping For Health Insurance

Connecticut consumers who carefully consider their health status and financial needs stand to reap the greatest benefits when shopping for insurance during the 2015 open enrollment period.

The enrollment period to purchase coverage at Access Health CT (AHCT), the online marketplace created by the Affordable Care Act, runs from Nov. 15, 2014, to Feb. 15, 2015. The law requires most Americans to carry health insurance or pay a fine when they file their federal income taxes.

During this time, current enrollees can make changes to their plan or select a new plan. Individuals without health insurance can also shop for coverage during this period. People can sign up for Medicaid and the Children’s Health Insurance Program (CHIP) through AHCT, too.

AHCT officials hope to enroll an additional 33,000 previously uninsured individuals during the three-month enrollment period. An estimated 147,166 state residents remain uninsured.

Connecticut’s uninsured rate stands at 4 percent – reflecting a 50 percent drop since implementation of health care reform. Fifty-four percent of the 256,666 people who enrolled in private plans and Medicaid though AHCT during last year’s enrollment period were previously uninsured.   Access to the exchange also narrowed racial disparities among state residents with health insurance – 26 percent of private health plan enrollees and 44 percent of Medicaid enrollees were black or Hispanic. Three-quarters of all enrollees have used their insurance since signing up, with seven in 10 stating they have a primary care doctor.

Here’s what consumers need to know to make informed decisions about their 2015 coverage.

The Marketplace

Individuals who are uninsured, buy coverage on their own or work for small employers can compare and buy health plans at AHCT with coverage beginning as early as Jan. 1, 2015.

This year, people can choose from plans offered by Anthem, ConnectiCare, Healthy CT and United Healthcare.

The plans are organized into categories – bronze, silver, gold and platinum – based on how an individual and the insurer will share costs. For example, platinum plans have a higher premium but lower out-of-pocket expenses, while bronze plans have the lowest monthly premiums but the highest out-of-pocket costs. People younger than 30 and individuals with very limited incomes can purchase catastrophic plans to cover worst-case scenarios.

Anne Melissa Dowling, deputy commissioner of the state Department of Insurance, urges consumers to look beyond the cost of monthly premiums when choosing a plan.

“It’s important to review all the plans carefully,” she said. “Sometimes plans with the lowest monthly premiums have significantly higher deductibles and other out-of-pocket expenses.”

Consumers can apply online, call the Access Health Call Center at 855-805-4325, use AHCT’s free mobile application for smartphones and tablets or receive in-person assistance.

Discounted Coverage

AHCT is the only place Connecticut residents can apply for financial assistance from the federal government to help pay for health insurance. People with moderate and low incomes can apply for tax credits toward monthly premium payments. Another subsidy lowers the cost of out-of-pocket expenses for deductibles, copayments and coinsurance.

Eligibility for discounted coverage depends on household size and income. People earning up to 400 percent of the federal poverty line ($46,680 for individuals and 95,400 for a family of four) qualify for tax credits.

One caveat regarding tax credits: The U.S. Supreme Court has agreed to hear a case challenging the federal government’s authority to provide tax credits to consumers in states who sign up for coverage at the federally operated HealthCare.gov. The lawsuit contents the ACA only allows state-run marketplaces (such as AHCT) to distribute subsidies. A U.S. Supreme Court decision to throw out the subsidies would be a serious blow to ACA because millions of low- and moderate-income people received tax credits when they purchased coverage. A decision is due next year.

In addition to tax credits, people earning 250 percent of the federal poverty line ($29,175 for individuals and $59,625 for a family of four) qualify for subsidies to help with out-of-pocket costs – but only if they select a health insurance plan from the silver category.

Taking the time to carefully estimate 2015 income and family size will make it easier to shop for insurance during the open enrollment period. Consumers need to provide an estimate of their 2015 household income and family size to qualify for tax credits and subsidies. People who overestimate their income may miss out on a larger subsidy. Those who underestimate their income will need to repay the government when filing their taxes.

All plans sold at AHCT meet federal requirements to include essential benefits and cover at least 60 percent of all medical costs, so consumers get coverage that complies with the law.

Consumers can buy health insurance in the private marketplace. But the federal tax credits and out-of-pocket subsidies do not apply for private plans sold outside AHCT.

Automatic Renewals

Renewal tool kits were mailed to all consumers currently enrolled in a qualified health plan through AHCT, detailing the steps required to either auto-renew or select a new plan for 2015. Most current enrollees will be eligible for auto-renewal, provided their income, household size, tax filing status and home address remain the same.

People with changes need to log into their AHCT account and update their information and documentation. This is critically important because tax credits and out-of-pocket subsidies are based on household size and income.

Although auto-renewals offer convenience, health advocates advise consumers to view the enrollment period as an opportunity to reassess their health needs and compare all available plans to ensure they’re making the best choice.

Tax Penalty

The tax penalty for people who can afford coverage but go without insurance for more than three consecutive months will go up in 2015. The penalty involves a flat fee based on household size or a percentage of taxable income – whichever amount is higher.

In 2015, the tax penalty will be 2 percent of household income above the federal tax filing threshold or $325 per adult ($162.50 per child under 18) with a maximum family penalty of $975.

Some people may qualify for an exemption from the penalty, including those who are members of a federally recognized Native American tribe, object to health insurance for religious reasons, are part of a health care sharing ministry or have a qualifying hardship. Check HealthCare.gov for a complete list of people who are exempt from the tax penalty.

Keep Track Of Deadlines

Consumers who currently have a plan from AHCT must re-enroll or select new plans by Dec. 15 to avoid coverage gaps and potential tax penalties. Open enrollment ends Feb. 15, 2015.

People who miss the open enrollment period must wait until next year to buy health insurance unless they qualify for a special enrollment due to marriage, divorce, birth or adoption of a child, or loss of employer-based coverage.

Here’s a look at some of the protections provided by the Affordable Care Act.

Bans Discrimination For Pre-Existing Conditions: Insurers must cover people with pre-existing conditions and they cannot arbitrarily cancel a policy because an enrollee gets sick.

Free Preventive Care: The law continues to broaden access to free preventive care. New rules regarding testing and medications to reduce the risk of breast cancer went into effect this fall. Plans that begin Sept. 24, 2014, must cover (without cost-sharing) risk-reducing medications, such as tamoxifen and raloxifene, prescribed to women with increased risk of breast cancer.

The U.S. Department of Health and Human Services estimates that approximately 76 million people (57.8 million adults and 18.6 million children) have received free preventive services. The law requires new commercial health plans to cover wellness visits and evidence-based preventive measures (such as immunizations and cancer screenings). Additional preventive measures for women include free screenings for gestational diabetes, breast-feeding supplies, domestic-violence screening and contraception. Workplaces run by religious organizations that object to birth control do not have to pay for contraception, but insurers must pick up the cost.

Expanded Coverage For Young Adults: Young adults up to age 26 who do not have access to job-based health insurance can stay on a parent’s plan whether or not they live at home or attend school. The law applies to all health plans, even those that are self-insured.

Annual And Lifetime Dollar Limits: The law ends lifetime and yearly dollar limits on coverage of essential health benefits. That means Connecticut residents with insurance no longer need to worry about going into debt when their coverage runs out.

Essential Benefits: Insurers must provide a minimum level of coverage under 10 categories known as “essential benefits,” including preventive care, emergency services, hospitalizations, outpatient care, maternity services, laboratory services, mental health and substance abuse treatment, pediatric care (including vision and dental), prescription drugs, and rehabilitation and habilitation services. The law applies to all plans sold in the private market or through AHCT – except plans from self-insured employers and “grandfathered” policies sold before March 23, 2010.

Standardized Benefit Explanations: Health insurers must provide policyholders with standard disclosure forms (no more than four pages) summarizing benefits and coverage, including information about deductibles, copayments, out-of-pocket limits and excluded services. The standard format allows consumers to make informed decisions based on apples-to-apples comparisons of health plans.

Consumer Rebates: Consumers whose private insurance carriers do not spend at least 80 percent of premium dollars on health care and quality improvements can expect to receive a rebate each year. This year a total of 69,186 Connecticut residents received $3 million in rebates on their 2013 coverage, with an average family rebate of $72.

Prescription Drug Savings For Older Adults: In 2015, Medicare recipients who reach the prescription coverage gap – known as the “donut hole” – will get a 55 percent discount on brand-name prescription drugs and a 35 percent discount on generic drugs. The donut hole, the point at which people must start paying for their medications, disappears by 2020.

Scrutinizing Premium Increases: Insurance companies seeking premium increase rates of 10 percent or more for plans in the individual market trigger an automatic review by the Connecticut Department of Insurance.

Sources: Access Health CT, Connecticut Health Foundation, Connecticut State Department of Insurance, HealthCare.gov and Kaiser Family Foundation.

This report was compiled by Magaly Olivero.