Complex Personal Issues May Cloud Decisions About Buying Insurance

If the volume of email from readers of this column is any indication, people are beginning to focus on how the health care overhaul will affect them.

With the opening of the online health insurance marketplaces less than a month away, consumers with job-based coverage want to know if they can buy a plan there (answer: yes, but they may not qualify for subsidies); those with individual coverage want to know how the plans will compare with what they currently have (answer: generally better coverage and potentially higher premiums, offset by subsidies); and those who have been unable to afford a plan or turned down because they have medical problems want to know if the marketplaces will provide better options than they currently have (answer: they should).

As I read through the emails, what’s striking is the complexity of some of the health insurance dilemmas people are trying to sort out. Getting them answers will be no simple task. The so-called enrollment assisters whose job it will be to help people understand their options and compare plans—navigators, certified application counselors, brokers and others–are going to have their work cut out for them.

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Complex Personal Issues May Cloud Decisions About Buying Insurance

Expect families, with their sometimes complicated legal and financial connections, to present especially messy insurance snarls to untangle, say experts.

“People are not going to fit the template, and the more you get into family coverage, the more complicated the questions are going to be,” says Karen Pollitz, a senior fellow at the Kaiser Family Foundation (KHN is an editorially independent program of the foundation.)

Consider the self-employed divorced couple whose annual income ranges between $30,000 and $200,000 and who split custody of their children. They want to know whether they’ll qualify for subsidized coverage on the exchanges, but “the forms don’t address these things,” they write.

Or what about the woman who asked about coverage options for an infant whose parents are each covered under their respective parents’ health plans. (One of the law’s popular provisions allows adult children to stay on their parents’ insurance until age 26, even if they’re married and financially independent.) The couple’s child has been covered since birth under the state’s CHIP plan for low-income kids, but one of the young adult parents recently received a raise and the couple’s income now exceeds the eligibility threshold for CHIP. Neither of the young adult parents has access to health insurance through their own job. What coverage options does their baby have?

“This will be a steep learning curve,” says Sabrina Corlette, project director for Georgetown University’s Center on Health Insurance Reforms. She likened it to the launch of the Medicare Part D prescription drug program in 2006, when beneficiaries tried to enroll in the new benefit and initially encountered snags in getting accurate information. 

Here’s a case in point. A woman wrote in asking about coverage options for her family, including their two kids with special medical needs. She writes, “My husband and I carry dual coverage through his employer and my employer group plans because neither plan covers our children’s needs adequately individually. Because of our children’s special needs, it is a hardship for both of us to work. We would like to drop one or both plans and purchase insurance on the exchange in October when open enrollment begins. Is this possible?”

Experts tell me that the simple answer is yes, it’s possible. But that may not be the best answer for this family. Most people can shop for coverage on the health insurance marketplaces, also called exchanges. But if people have access to employer coverage that’s considered adequate and affordable under the law, they won’t be eligible for subsidies to reduce the cost of an exchange plan. (A premium tax credit is available to people with incomes up to 400 percent of the federal poverty level, or $94,200 for a family of four. Cost-sharing subsidies to reduce deductibles and copays will be available to those earning up to 250 percent of poverty, or $58,875 for a family of four.) Since employers typically subsidize a good portion of their employees’ health insurance costs, buying an unsubsidized plan on the exchange might not make financial sense.

If both parents dropped down to part-time status, they might no longer be eligible for their companies’ health insurance plans and could buy subsidized coverage on the exchange. But if one of the parents kept working full time and had access to good family coverage on the job, no family member would be eligible for subsidized exchange coverage.

It’s also unclear whether the plans offered on the exchange would better meet their children’s needs than the employer coverage they currently have, say experts. The couple would have to compare coverage specifics and costs carefully.

There’s another coverage wrinkle that could affect this family. Depending on their income and the state in which they live and their children’s health care needs, some or all family members could be eligible for any one of a number of Medicaid-related health insurance programs, says Edwin Park, vice president for health policy at the Center on Budget and Policy Priorities.

How one of the enrollment assisters will handle a family like this one is uncertain. Under federal guidelines, assisters will generally be required to undergo at least 20 hours of training, and some states require more. Brokers generally are required to have fewer hours of training about the exchanges.

Experts say many people who contact the exchanges will be dealing with disabilities or complex family situations, and assisters should be prepared to either help them or refer them to appropriate state programs or community-based organizations.

“I think most navigator training should be able to identify these people who need extra special help,” says Elisabeth Benjamin, vice president of health initiatives at Community Service Society of New York, which will contract with 38 community-based organizations statewide to provide navigator services in New York.

Sometimes even though the questions are complicated, the answers may not be. In the case of the infant whose two parents are covered on their own parents’ plans, for example, experts say the baby would be eligible for a child-only policy on the health insurance marketplace, and if the parents’ income is less than 400 percent of the federal poverty level ($78,120 for a family of three in 2013), they could receive a premium tax credit.

Still, figuring out how to work through a multi-layered question to get to the simple answer will take practice.

“You almost have to be doing this stuff on a daily basis in order to learn it,” says Corlette. “But [the assisters] will get up to speed, and they’ll probably get up to speed really quickly.”

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