Category Archives: Health Insurance Premium Subsidies

How to find my premium rate subsidy in the Covered California public health insurance exchange.

Ending Health Subsidies: ‘People Will Die’

Six Embarrassing Headlines on Subsidies from October

By Marc Derendinger, Sr.

  • President Trump Ends Healthcare Insurance Subsidy Program – Fortune [October 12, 2017]
  • Ending Health Subsidies: ‘People Will Die’ New York Times-Oct 13, 2017
  • Trump to halt subsidies to health insurers – ABC News [October 13, 2017]
  • Trump’s strike on health insurance subsidies jolts markets, Washington [October 14, 2017] 
  • Trump will end ObamaCare subsidy payments | New York Post [October 12, 2017] 
  • White House to halt health insurance subsidies The Boston Globe-Oct 12, 2017 

This small sample of headlines from October 12th to 14th emblematize a disappointing age in the history of American Journalism, where indifferent editors compete for reader “clicks,” for the purpose of increasing advertising revenue.

“Yellow Journalism” is based upon sensationalism and crude exaggeration (dictionary.com).

After answering several individual inquiries to explain Trump’s decision on subsidies, I feel compelled to put this explanation in public view (if for no other reason, than to catch my breath). The following paragraphs attempt to more accurately explain what Trump did to Subsidies, as it concerns Californians.

Background: The California individual health insurance market is segmented into two halves:

  1. Covered California plans e.g. Kaiser, Blue Shield, HealthNet, Anthem etc., which are potentially eligible for Subsidies
  2. Off-exchange (same plans as above, but purchased directly from the insurers)- Not Eligible for Subsidies

Further, there are two types of subsidies addressed in this article:

  1. The APTC (advance premium tax credit)- Most Covered CA policies enjoy this subsidy (about 5 billion dollars worth*), whether Minimum Coverage, Bronze, Silver, Gold or Platinum (*Source: Covered California Active Member Profile of March 2017, reported June 1, 2017:  estimated using 828,973 policies, $499 average APTC)
  2. Cost-sharing Reductions (CSR)- only Silver Plan policies receive this subsidy

In contrast to recent headlines, Trump’s orders do not impact the APTC subsidy, which are funded specifically from a California health and dental insurance premium tax (of approx. 3.8%) on California insurance companies. (Truly, one could argue greater damage to the market place was done by Anthem, with its plans to pull out of all California counties except three).

“Trump’s recent order does not impact the APTC subsidy”

The APTC funding mechanism was enabled by the original PPACA legislation. However, Congress blew it when they neglected to include funding for the second subsidy, “CSRs,” leading to the current situation.

What are the CSRs? This misnomer is a buzzword for “coverage enhancements” made to a Silver Plan for applicants with household income from 133% to 250% of the Federal Poverty Level. It lowers copayments and deductibles (essentially making a Silver Plan into a Gold or Platinum+ Plan, at no additional premium). The cost for the coverage upgrade has been coming from the feds (until Trump’s orders).

“Enhanced Silver plans include more robust coverage for the price of the same Silver premium. These plans include lower copays, coinsurance and deductibles compared to normal Silver plans.” [Covered California, July 21, 2017]

Of the Silver plan policies issued in Covered California, about three-quarters qualify for CSRs.  It is noteworthy that whether your Silver plan enjoys CSR status or not, the monthly insurance

Subsidies

premium and the APTC subsidy remain the same.

Interestingly, Trump’s order only impacts adults, because children of these households are taken out of Covered California automatically, and sent to a Medi-Cal case worker for possible coverage (all children in households with less than 250% FPL). So what happens to the remaining adults? Assuming Congress does not provide funding, they would likely receive a supplemental premium notice for the extra coverage, with the option to downgrade to the regular Silver 70 plan for no difference in premium. Yet this may be a worst-case scenario, and here the story gets interesting.

A Small Subsidies Surprise

The deeper we dig, the greater the surprise.  The grand surprise follows this paragraph, but first, in a paper commissioned by the public healthcare exchange, Covered California** and published January 26, 2017, researchers estimated if CSR funding were cut-off (presumably by President Trump), overall Silver policy premiums would increase 16.6% for 2018, AND, rather than causing a multitude to lose insurance coverage, this Covered California-sponsored paper estimates Covered California would actually gain a net 20,000 new members!  (**source:  Evaluating the Potential Consequences of Terminating Direct Federal Cost-Sharing Reduction (CSR) Funding, By Wesley Yin, Ph.D., and Richard Domurat, Ph.D. candidate).

A Big Subsidies Surprise

Closer inspection of a Covered California report issued July 21, 2017 suggests a contingency plan was conceived last June, in the event CSR funding was ceased.  Taken verbatim from this report:

What happens if the cost-sharing reduction payments are stopped?

“In June, Covered California’s board took steps to protect most consumers from any rate increases caused by the uncertainty surrounding cost-sharing reduction payments. The board acted to place any rate increases caused by the uncertainty only into Silver plans. If the federal government does not act to provide certainty that CSRs will be funded, Silver-level consumers would see an increase in the gross cost of their premiums, they will also see an increase in the amount of  financial assistance they receive, leaving their net payment virtually the same.” [Source: “How Cost Sharing Reductions Work:” Covered California, July 21, 2017]

Recent Headlines

Reflecting on recent headlines, readers beware:  Yellow Journalism is prejudiced, jaundiced, and lurks everywhere…even from the world’s most respected news organizations:

Ending Health Subsidies: ‘People Will Die’  New York Times-Oct 13, 2017

References

If you found this article educational, feel free to share it.

Re-Shopping Obamacare For Better Covered CA Insurance

New York Times writer, Margot Sanger-Katz is suggesting consumers should be re-shopping Obamacare coverage. The article argues the savings could be substantial. Even the Health and Human Services agency discovered last year that “Returning Consumers Who Shop Save Money.”

Re-Shopping Obamacare

As the individual marketplace continues to deteriorate, the small group market has gained a firmer footing, including stable PPO networks and easier participation rules with Kaiser and traditional PPO plans.  Is it time to review available small group plans?

View online pricing, free of charge

“Returning Consumers Who Shop Save Money.”

Re-Shopping Obamacare

Re-Shopping Obamacare

Leaving School: 2 Actions To Find Affordable Health Coverage

Time is of the essence in order to maintain or find affordable health insurance when leaving school.   You must take action fast or risk being “locked-out” of the health insurance market for several months, due to a little publicized defect in the Obamacare legislation. We suggest 2 actions to find affordable health coverage when leaving school, which have been made possible under the Affordable Care Act:

Need Temporary Health Insurance?   CLICK TO QUOTE

First, if you have not yet turned Age 26 and have been covered on your parent’s health plan, the Affordable Care Act  allows you to continue on through age of 25.  Is this your best option? Maybe, but there are two reasons to look at other options available through the Affordable Care Act:

  • Your parent’s health plan may have limited medical facilities e.g. Kaiser where you live, or
  • The monthly insurance rate may be lower through Covered California with a subsidy, if you qualify

Second, the following are two new options made available through the Affordable Care Act:

  1. Covered California provides access to most private health plans e.g. Kaiser Permanente, Anthem Blue Cross, Blue Shield of California, HealthNet EPO and PPO plans and some regional providers as well (availability varies according to each of California’s counties- these folks will give you free assistance).

    Extra caution is advised, however:  You must complete and submit your application prior to the desired 1st of the month coverage start date to avoid a gap in coverage, plus a 60-Day time limit applies. Warning: failure to enroll within the special 60-day period will not only incur a possible IRS tax penalty, but will consequently lock you out of the U.S. health insurance market until the following open enrollment period i.e. January 1st! (This is a lesser known problem with the Affordable Care Act) Read more about your special enrollment qualifying event here;

  2. Apply Direct- to the insurance carrier (Kaiser Permanente, Anthem Blue Cross, Blue Shield of California, Cigna, HealthNet and others) is easier than going through Covered California and the prices are virtually identical under California law.

The only reason you would choose the Covered California exchange (above) over this 3rd option is if you were to qualify for a subsidy or Advance Premium Tax Credit. Otherwise, CoveredCA is not worth the hassle of providing personal tax forms, proof of California residency, employment information etc.

  • Deadlines: The same warning applies as above i.e. you must complete and submit your application prior to the desired 1st of the month coverage start date to avoid a gap in coverage; the 60 Day Limit also applies.

The easiest part of this process is choosing a plan, and the hardest is getting the triggering loss of coverage forms to the carrier (the required document and method vary by health plan). Don’t risk losing your effective date on a technicality:  Use a competent broker who is licensed and certified to help you compare all your options, on or off the exchange.  Especially valuable is the broker will help you submit a properly completed application forms to the health plan of your choice!

Certified Insurance Agents who offer educational meetings are a free service to consumers under the ACA and California law. Find a local meeting here.  If you don’t use a certified agent, then you could run into the problems publicized by KPIX 5 (San Francisco):  Watch this news story here.

Everybody’s Happy With Obamacare In California

Need Temporary Health Insurance?   CLICK TO QUOTE

On May 13, 2015, Jamie emailed me late at night to ask what it would cost to change from a Covered California PPO plan and re-enroll directly with the same insurance company, off the exchange. [Check out our latest article for students leaving school]

I asked, “Jamie, it’s the same total premium, either way, but don’t you want to keep your $199 per month subsidy?  “…because you can’t have a subsidy unless you go through Covered California.”

Jamie responded, “My CPA told me we have to re-file my tax return and pay back hundreds of dollars because Covered California sent me a revised 1095-A form on May 1st.”  I offered to help and Jamie completed the Insurance Help Form for 1095-A Questions.

“No problem, I thought.”  I phoned Covered California at the special agent line and was placed in line as number 34.  15 minutes later, Dale answered the phone:  “Dale, your customer received no 1095-A form and was unable to file taxes in early January.  We followed your instructions and filed a 1095-A-Dispute-Form.  As promised, after 60 days (March 31st to be exact), we received the 1095-A form and all the numbers looked correct.”  So Jamie filed her taxes.

“Dale, guess what, on May 1st, CoveredCA issued a “corrected 1095-A form” that is unfortunately incorrect.  In fact, there are zeros in all the boxes.”  The customer is upset, naturally, and is faced with additional tax preparation fees for the amended return.  Dale’s solution:  We need to file a new 1095-A-Dispute-Form and wait two more months.

Being a diligent agent, I pushed back and asked him to look in the system log to see what may have generated a new 1095-A form.  Dale responded with “Medi-Cal has this case under review.”  I asked, “what does that mean? Today is May 14th and the application was enrolled and paid for last December…is there insurance or not?”

Dale suggested he transfer me to another unit in Customer Service who may help further.  So he did…I went back to the end of the line and waited 15 minutes before Valerie picked up.  In the meantime, I phoned the insurance company directly and asked if coverage was in-force.  They said “yes, but Covered California has not yet sent the eligibility information to us…but sometimes they don’t send it if the case renews with no changes.”

I confronted Valerie with this information and she very nicely responded, “our records show the customer has not yet paid the first month (January) premium and that is why we have not sent over the enrollment information.”  (I quickly checked the insurance company’s website and it shows all premiums paid to May 1st).

Valerie was not sure how this could be happening, but also noted Medi-Cal has the case under review since March.  I laughed, “if Medi-Cal has been reviewing this for 1.5 months, then it is going to take them 15 years to get through this season’s new enrollments.”  Valerie responded, “the insured is suppose to contact the local county to help the case worker finish their review.”  “Really, and when did you tell the customer this?”

Valerie said there was an “eligibility determination” in late April and a letter was sent out.  I looked it up on their website and she was right.  It reads,

“Congratulations! You qualify for health insurance through Covered California. You also qualify for up to $199 per month in premium assistance to help pay for your health insurance coverage”

I said (nicely) to Valerie, “let me summarize this.”

  • Covered California never provided a 1095-A form until the customer filed a dispute (which is the only way to get a 1095-A form when it is lost or missing)
  • You issued the correct form in March and the customer filed their taxes
  • In May, you sent a revised 1095-A form for no reason and the client has to pay back the tax credit according to the CPA and pay to re-file the tax return
  • You say there is no person at CovCA who can tell us why this happened, and our only remedy is to file another Dispute form and hope for the best
  • You also say the first premium payment (January) was never paid and therefore you have not sent enrollment data to the insurance company
  • Meanwhile, the insurance company says they are indeed receiving premium payments, but you have never sent them the enrollment data
  • The icing on the cake is you say the case is under review with Medi-Cal for the last six weeks, but nobody has informed the customer to call Medi-Cal to speed it along.  Moreover, the letter you supposedly sent to inform them actually says everything is fine and “congratulations.”

Congratulations!  Everybody is happy with Obamacare in California.

Obamacare Press Releases

U.S. TREASURY DEPARTMENT OFFICE OF PUBLIC AFFAIRS

 

 

Questions About Special Events?  Get Local Assistance Now

Need Temporary Health Insurance?   CLICK TO QUOTE

Calculating Premium Assistance Subsidy Eligibility For The Covered California Advance Premium Tax Credit

CovCalHorz-328px

This article was originally written for the Fall 2013 open enrollment season.  See our related story about Covered California Open Enrollment Notices for the 2015 open enrollment and the latest Anthem story.

Remember, Open Enrollment begins in November and as the individual marketplace continues to deteriorate, the small group market has gained a firmer footing, including stable PPO networks and easier participation rules with Kaiser and traditional PPO plans.  Is it time to review available small group plans?   Reserve your appointment early for Open Enrollment, which begins this November.  Find local rates in San Jose, Santa Clara and the San Francisco bay area or via telephone, throughout Northern and Southern California..

View online pricing, free of charge

 

California Marketplace

 

 

 

 

 

 

 

 

 

 

 

 

Obamacare Rate Guide

Obamacare Rates and Subsidies (Tax Credits)

27 Year Old Obamacare Rates For Santa Clara County (California)

AGE 27 *                                        CoveredCA-ComparisonChart
2014 Metal Tiers

Least Expensive Insurer

Most Expensive Insurer

Bronze 60

$208/ month

$250/ month

Enhanced Silver 70

$279/ month

$317/ month

Gold 80

$330/ month

$386/ month

Platinum 90

$371/ month

$451/ month

Participating Insurers

Anthem, Blue Shield, HealthNet, Kaiser, Valley Health Plan

*Data estimated with Covered California Rate Calculator- September 2013

Do you want to see specific rates for you and your family? Once of the unique features of the Covered California Obamacare rate structure is each person in your family is allowed to choose a separate plan.  For assistance with calculating rates for members of your family, we suggest you use a local Certified Insurance Agent to save time and avoid costly mistakes.

Obamacare Rate Subsidies (Premium Assistance)

According to Covered California, individuals earning under $46,000 have a chance to receive premium assistance, based on family income, as estimated in the following chart.

AGE 27 *                              CoveredCA-ComparisonChart
2014 Metal Tiers

Monthly Premium Assistance

Premium Assistance Can Be Applied To Any Public Exchange Plan, But Not The Private Market

$10/ hour 40 hrs./wk.

$188/ month

Covers about 90% of lowest cost Bronze Plan.
$12/ hour 40 hrs./wk.

$138/ month

Covers about 50% of lowest cost Silver Plan
$14/ hour 40 hrs./wk.

$84/ month

$16/ hour 40 hrs./wk.

$27/ month

Participating Insurers

Premium Assistance can be applied to all health plans in the California public exchanges, but does not apply to plans in the private marketplace

*Data estimated with Covered California Rate Calculator- September 2013

Who pays for premium assistance?  Federal dollars pay for the first two years.  By 2016, California exchanges must be self-sufficient.  California may charge fees to insurance companies to make exchanges self-sufficient.  Do you qualify for lower rates with a Premium Assistance Subsidy?  Find out here.

Another Form of Obamacare Assistance: Cost-Sharing Reduction

Public healthcare exchanges offer a second type of Obamacare rate assistance, in the form of lower copayments and lower out-of- pocket costs. These are referred to as Cost Sharing Reductions.  For example, if your income falls between 100% and 250% of the Federal Poverty Line and you enroll in the Silver 70 plan, you will receive enhanced coverage ranging from 73% to 94% of actuarial value.  The regular Silver plan provides approximately 70% actuarial value.  The best example of how this benefits you would be the resulting reduction of copayments i.e. your Primary Care office copayment would decrease from $45 to $40, $15, or even $3 based on income.

Do you need help understanding your premium assistance rate subsidy?  Do you want to ask additional questions about the Cost-Sharing Reduction or CSR?

These are questions that are best addressed with your local Certified Insurance Agent. When you seek help through a Certified Insurance Agent, there is no additional cost.  A further benefit to you is access to professional guidance as you use your new plan or in the event you wish to change plans later.   Consider this an essential tool to choosing the right plan, and avoid waiting until the next open enrollment to make things right. 

Did you know certain Kaiser members may qualify for premium assistance, too?  Read the story here.