Affordable Care Act-Ins and outs

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Lance Braswell from Farm Bureau Insurance explains the new healthcare laws. -Photo: Joyce Marie Taylor

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March 14, 2013

Affordable Care Act-Ins and outs

Joyce Marie Taylor Suwannee Democrat The Suwannee Democrat Thu Mar 14, 2013, 12:00 PM EDT

Mayo — Lance Braswell from Farm Bureau Insurance in Mayo recently explained what to expect once the new Affordable Care Act takes effect. As a comparison he chose a healthcare plan from Blue Cross/Blue shield to show what consumers can expect to pay.

One thing he pointed out is the cost of air ambulance services, which is a common occurrence in rural areas where there are no major hospitals. Coverage varies from one policy to the next, but ranges from about $4,000-$5,500 that insurance companies will pay toward one helicopter transport to a hospital.

“If you take a helicopter ride from Perry to Gainesville and the bill is $15,000, your health insurance is only going to pay $5,000 of it,” said Braswell.

The helicopter company, he said, will bill the patient for the balance. People who have insurance through the state, Braswell said, those charges used to be 100 percent paid. He said he didn't know if that would change under the new healthcare laws.

Braswell said in 2004 his wife had to be life flighted to a hospital and the bill was $9,500. His health plan at that time only covered $5,000 of the cost.

“We had been married two or three years and didn't have a lot of money and we had to pay off the other $4,500,” said Braswell. “When you're having to look at a helicopter ride, keep that in mind.”

Mayo resident John Hewett recalled a recent experience while in St. Augustine where he and his family had a little bit of time to shop around for air ambulance services so that he could be transported from one hospital to another. The county facility, he said wanted $20,000 to transport him to Tallahassee. After shopping around the family found a private carrier, Medivac, who gave them a price of $978 to fly out of Jacksonville, pick Hewett up from Flagler Hospital in St. Augustine and then fly him over to Tallahassee Memorial. That included paramedic services and allowing the family to ride with him.

“It's just amazing if you've got time to shop,” Hewett said.

The Affordable Care Act is the largest piece of U.S. Legislation since President Lyndon Johnson signed the Medicare bill into law in 1965, Braswell said.

“I do health insurance and we're still learning,” he said. “We're having our own conference calls once a week to try and get ramped up on this and what it all means.”

Everybody, he said, was waiting until after the election to see if the ACA would stick.

“Well, it stuck,” he said. “So, now we've got to move forward.”

Blue Cross, he explained, was well ahead of the curve.

“They were planning for it whether it was here or not,” he said.

Something to look forward to in 2014 is the Health Insurance Marketplace (Exchanges), Braswell said.

“Pretty much what that is, there's going to be a website or a call center that people call and ask what plans can I get?” he explained. “They're going to offer about four standardized plans.”

The exchanges, he said, are basically replacing the health insurance agent. Agents, he said, can still be involved if a person would rather have them do the legwork instead of dealing directly with the Exchange. If you don't have health insurance by 2014 there will be penalties.

“Depending on your income level, you're going to have help from the government to help pay for your insurance,” said Braswell.

With regard to Medicaid expansion, Braswell said they're raising the income limit to qualify. If you have a group health insurance plan there could be a 14-18 percent rate increase due to new taxes that will come into play in 2014. Anyone who doesn't have insurance now, by 2014 the “guaranteed issue” will take effect and anyone, no matter their pre-existing conditions will be able to get insurance, no questions asked.

“What I'm worried about is are they going to be able to afford it when they get there?” he asked.

Insurance companies will have to provide policies that will cover at least 60 percent of a person's medical costs. Individual policies, he said, are the ones that will be seeing the most changes with the ACA. 

Penalties

The big question many are asking, Braswell said, is, “If I don't buy insurance, how much is it going to cost me?”

If you don't maintain minimum essential health coverage beginning Jan. 1, 2014, Braswell said, you will be penalized $95 per person. In 2015 that penalty will rise to $325 and by 2016 you will be paying a $695 penalty. The penalty, however, cannot be more than 2.5 percent of household income by 2016. In 2015 it will be two percent and in 2014 it will be one percent. These penalties are for individuals and dependents, but for children under 18 it is only 50 percent of the adult amount.

Braswell said his concern is that when open enrollment time comes in 2014, many will elect not to purchase a plan if the penalty the first year is only $95, which is a cheaper route than paying monthly premiums.

“Those are the healthy ones that need to pay into the system to help offset the costs,” he said. 

Premiums

On the flip side are those who couldn't get health insurance before and now that they can, even with pre-existing conditions, it has the potential to drive up rates for everyone who elects to have insurance. Insurance companies, he said, are worried about this aspect of the ACA.

For a typical family of four (two adults and two children under 18) the penalty for not having health insurance would be $285 in 2014, $975 in 2015 and $2,085 in 2016.

Meanwhile premiums are projected to increase. Previously, on average for those 21 years of age, their premiums were up 122 percent for males and 102 percent for females, for those age 31 it was a 95 percent increase for males and a 76 percent increase for females, and for seniors age 64 and up it was a 34 percent increase for males and a 62 percent increase for females.

Under the new healthcare plan men and women will be paying the exact same premiums. There will also be automatic maternity coverage, whether you need it or want it.

Open enrollment for the Exchange begins Oct. 1, 2013 and will continue through March 31, 2014.

Braswell said insurance companies will collect individual subsidies from the IRS and penalties he assumes will be reflected on their annual taxes.

Front-end tax credits to offset plan premiums are available at the time of purchase from the Exchange for households with annual incomes between 100-400 percent of the federal poverty level.

“Right now my premium for my family, we have a $6,000 deductible, is $375 a month, so I'm right around $4,200-$4,300 a year,” said Braswell. “My plan is probably going to go up about 100 percent.”

For a standard plan with co-payments, premiums will be right around $11,000, he said.

Braswell said the ACA is supposed to help with healthcare costs and will benefit doctors and hospitals, but Americans will be paying more in premiums, even doubling for some who don't qualify for subsidies, along with those who will be paying penalties for being uninsured.

“Then, we've got to pay more in taxes,” he said.

Group plans, Braswell said, shouldn't see as drastic changes as individual plans, but he said he is still learning all the ins and outs. It was noted that corporations with less than 50 employees are exempt from having to supply health insurance coverage, although the individuals who work for them must get their own coverage.

Braswell said the best solution he ever heard to the nation's healthcare problem was that if everyone stopped paying health insurance premiums, then doctors, hospitals and pharmaceutical companies would be forced to charge only what people could afford.

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