Local agents gear up for insurance exchange

Questions remain unanswered

by Daniel Moore
Press staff writer

Idaho’s new health insurance exchange opens for business on Tuesday, Oct. 1. The main portion of the exchange, the website www.yourhealthidaho.org, will compare different health insurance plans and allow patrons to apply for health insurance coverage and subsidies for coverage.

Of course, that’s the theory anyway.

“We still don’t know if the state exchange will be ready or if the individual companies will be ready” for the Oct. 1 deadline, said local Farm Bureau agent Debbie Flandro.

Local agents are working to figure out what the new healthcare law means to their customers. While it’s well know that there will be a requirement that all citizens buy insurance or be charged a $95 tax penalty (in 2014), many questions are still unanswered.

The current site is underwritten by the federal government, Flandro said, until the state can run it on their own, hopefully in a year from now.

People can go through the process on their own through the website, or through a telephone version of the exchange, but many people may require an agent because of the complexity of the law, said Kacy Gehring, the owner and agent at All Coverage Insurance in American Falls. As with other local agents, she’s completed training to navigate the new system and help patrons choose the best option for them.

Agents helping people buy from the exchange will make a commission, as they always have, but it will contain a big cut, Gehring said. There are also volunteer “in-person assisters” or “navigators” who will be qualified to help navigate the system, but can not recommend a specific program to choose. Gehring said to be careful about choosing who to help with the program; the program can be opened up to fraud, she said.

People applying for subsidy need to apply before Dec. 16 for coverage that will begin Jan. 1. If not, they need to apply by Feb. 1. The site will compare different companies’ levels of plans, called after the metals platinum, gold, silver and bronze.

“It’s going to be as close to apples to apples as possible,” Gehring said, adding that there will be differences between plans even on the same level. Applying for the exchange will allow customers to receive tax credits to help pay for the plans. The subsidy will help pay the insurance premiums, as well as the co-insurance once a claim is made, if patrons meet the right income limits.

The exchange will also compare independent plans, for those who don’t want to apply for the government assistance. There will be other plans available on the market, but not all of them may qualify their patrons to not receive the tax penalty the new law charges. However, Flandro said all major companies are changing their plans to meet the federal requirements, and should be notifying their patrons soon that they may have to change plans.

Flandro also said that if a person or family qualifies for a subsidy, the best deals may still be with an independent plan, and it may not be worth it for them to apply through the exchange.

In addition to receiving tax credits, patrons of the exchange can also receive cost sharing benefits. Those making less then 250 percent of the federal poverty guidelines (about $65,000 for a family of four in 2013) can get the benefits. These will help pay for deductibles, prescriptions and other healthcare expenses not completely covered by the insurance.

Some younger people my qualify for catastrophic insurance only, Gehring said, because paying full price for insurance for those who are young will far outweigh the tax penalty at the end of the year.

One part of the health care law Gehring likes is that the plans will include what is called “true deductibles,” where the deductible will include items not previously allowed to meet a deductible, like prescriptions. People will see immediate benefits from that part of the law, she said.

But there are plenty of things to be wary of, and a few unknowns in the program. If someone applies for the tax credit early in the year, but then makes more money later in the year than estimated, her or she may not receive the credit or may even have to pay more taxes, Gehring said, and because Idaho chose not to expand the Medicaid program, there will be those who make too little to qualify for the exchange and make too much to qualify for the Medicaid.

“There will be quite a gap between Medicaid recipients and healthcare exchange users that won’t be covered,” Gehring said. State-level politicians were concerned about the federal government’s ability to fund the expanded program past the two-year mark promised by the federal government, but Gehring thinks they will eventually pass the expansion.

“It’s something that the legislature will have to deal with this year,” Flandro said, saying she hopes they will fill in the gap.

And one other problem is that no one knows what insurance is going to cost. Everyone qualifies for insurance under the new law, and the only pre-existing conditions insurance companies are allowed to charge more for are tobacco use and age. But the insurance companies can only charge someone over 65 three times what they charge someone who is 21. This could lower the rates for the elderly but increase them for the young, Gehring said, but it’s all speculation.

Flandro thinks premiums will increase across the board because the new law requires so many mandated benefits.

“The scary part about the whole law is that I don’t think we can afford it,” she said.

There are no open rates yet, although companies are seeking government approval for the rates, Flandro said. Companies are holding information on the rates secret until the exchange so they are not undercut, she said, and agents do not even know yet what they will be.

While there are still many questions to be answered, the insurance companies have come too far to go back now, spending millions of dollars to meet the program’s requirements, Flandro said. Defunding the program, as some have suggested, would put the whole industry in limo, she said.

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