How the ACA will affect Maine

Posted Wednesday, September 25, 2013 in News

How the ACA will affect Maine

On Oct. 1, Maine will begin to enroll people into health care plans through insurance exchanges mandated by the Affordable Care Act. Enrollment will continue through March 2014, and those enrolled by then will begin their new coverage in January 2014.

Who needs the insurance exchanges?

Not everyone, nor even a majority, will be involved in the health exchanges, sometimes called the “Health Marketplace,” which will be run by www.healthcare.gov, through the Department of Health and Human Services’ Centers for Medicare and Medicaid Services. Maine did not set up its own exchange when the ACA was passed into law, so the state’s exchange is being handled by the federal government.

Doug Dunbar at the Maine Bureau of Insurance estimates that fewer than 10 percent of Maine’s population will use the exchange. Few people involved in a large group through a workplace will likely join the exchange unless they have reason to believe they will be eligible for a federal subsidy and that a private policy would be cheaper than the amount they are paying through their employer.

About 65 percent of Maine’s population falls into a financial category where they may be eligible for free or highly subsidized health insurance, but the majority of people with incomes of 138 percent of poverty or greater are not eligible for subsidized health care if they have an employer-sponsored health care policy.

People who will be accessing the exchanges are likely to be those in small group plans (about 90,000 people), those who are currently purchasing individual policies (about 33,000 people), and those who are uninsured (between 130,000 and 135,000 people).

Trevor O’Connor of Brunswick is typical of the kind of person looking for health care on the exchange. O’Connor is 27, a college graduate, but because of the dip in the economy, the only jobs he’s been able to get since then are temporary or parttime. He was on his parents’ health care plan until his 26th birthday, itself an ACA benefit.

He is currently on Dirigo- Choice, which is a state-subsidized plan that will be vanishing in January. O’Connor says he now has his first “grownup job” that will eventually provide health care — in a year. But O’Connor needs a regular prescription for asthma and treatment for numerous allergies. So he’s looking at his options on the exchange.

“I can’t do without the insurance,” he said. “It could be a matter of life and death if I don’t have my asthma medications.” His annual income of $21,000 will provide him with a subsidy that would pay for two-thirds of his insurance premium.

Premiums, subsidies, and help

People who purchase a plan not on the exchange (“offexchange”) are not eligible for federal subsidies, which may otherwise be available. And subsidies can make a real difference in the premium price.

A family of four, with a household income of $40,000, with two nonsmoking adults aged 35 and two children, would have a household income at 170 percent of poverty. The unsubsidized “silver” (mid-cost) premium would be $11,209 per year; however, based on the fact that they are nonsmokers, the family pays only 4.91 percent of their annual income. (If they smoked, they’d also pay the difference between the nonsmoking premium and the smoking premium, if any.) Their yearly premium would be $1,965, about 18 percent of the unsubsidized cost. The government tax credit is $9,244, 82 percent of the unsubsidized premium.

It is not necessary to itemize on tax returns to receive this credit.

The state Bureau of Insurance is available to help people walk through the options and the likely subsidy using a calculator offered by Kaiser Family Foundation. (It is available at http://kff.org/interactive/sub sidy-calculator/) To get help with determining your subsidy, call the Bureau of Insurance at 1-800-300-5000.

As the exchanges open on Oct. 1, people who can help befuddled policy buyers, known as “navigators,” will be stationed at libraries and other public places to explain how to use the exchanges, help people understand the choices, and match up their needs with the policies available. In the Mid-coast, navigators are being trained by Midcoast Maine Community Action, located in Bath. (See sidebar)

The insurers

Many of those who are currently offering small group policies will continue to do so off-exchange. Those companies include Aetna, Harvard Pilgrim, and United Health- Care. The insurance company MEGA will offer individual plans off-exchange as well.

Currently, there are only two carriers on the insurance exchanges for individual and small group coverage.

The first is longtime Maine insurer, Anthem Blue Cross, offering a standard for-profit insurance product. Anthem will provide individual and small business policies through the exchanges, as well as dental insurance. Anthem offers different rates for those who use tobacco and those who do not use tobacco, and the difference in premiums is steep.

The second is a newcomer to the scene, Maine Community Health Options, a nonprofit co-op. They will offer individual and small group plans as well, though not dental. They offer only one “blended” plan for tobacco and non-tobacco users.

Delta will also provide dental insurance on the exchange.

How premiums are calculated

There are four districts in the state of Maine, and each has slightly different premiums. In general, the southern and coastal portion of the state — Cumberland, York, and Sagadahoc counties, have lower premiums across the board than do the other three districts. The most expensive premiums are found in Aroostock, Hancock, and Washington counties.

Rates can be seen at the Maine Bureau of Insurance, at http://www.maine.gov/pfr/insurance/ACA/PDF/Silver_Plan_Comparison.pdf

There are three basic levels for health insurance — Gold, Silver, and Bronze, but the Anthem and the MCHO plan do not necessarily have the same options in the same plan level. There is also a catastrophic plan which has a high deductible for hospitalization, but these plans are available only to those under 30 or who can demonstrate a hardship.

The consumer-run Maine Community Health Options, based in Lewiston, will offer its Health Maintenance Organization (HMO) plans statewide. Consumers who buy an Anthem individual policy will have access to one of two types of plans, depending on where they live. Anthem has proposed a “point of service” plan for northern Maine that includes all hospitals in the region and an HMO plan for southern Maine that excludes hospitals not in the MaineHealth network, and covers only in-network care.

Parsing the plans

Maine Health Care Options is a co-op that is also a nonprofit, organized under a 501c29. It is a newcomer to the health care industry, and has obtained grants and loans to obtain reinsurance and a solvency bond, which it will pay back over 15 years. Its CEO, Kevin Lewis, says that the company’s plan is to build reserves as it goes along. With few exceptions, MHCO is less expensive than Anthem’s non-tobacco rates, and considerably less expensive than Anthem’s tobacco rates. It is owned by its members, who have the right to vote for board members, many of whom must be members as well.

MHCO includes all the hospitals in Maine, including Parkview in Brunswick, while Anthem excludes hospitals in southern Maine that are not part of the Maine- Health network for new members and those who purchased plans after March. MHCO says that about 90 percent of doctors have signed up, and if members want to keep a doctor who is not on the network currently, they can “nominate” a provider to get them into the network. They do not offer a Medicare supplement plan currently.

The Anthem plan is more complicated. They have HMO plans in southern Maine’s two areas, which include York, Cumberland, Sagadahoc, Lincoln, Kennebec, Oxford and Kennebec counties. Policyholders who are not “grandfathered” (i.e., who purchased a policy before March) must use one of the MaineHealth hospitals or their affiliates in these counties. (Those with a grandfathered policy may wish to shop on the exchange as well, since they may be eligible for subsidies they would not otherwise receive.)

According to Chris Dugan of Anthem, this change will affect only about a thousand current policyholders, but will affect all new policyholders. “We found that a focused network would save our customers 12 percent,” he said. The deal excludes Central Maine Medical Centers and their affiliated network, among them Parkview in Brunswick.

Anthem also offers an HMO for Androscoggin, Waldo and Franklin counties, which do not have MaineHealth hospitals. Anthem provides a Point of Service (POS) plan in the rest of the counties — Penobscot, Piscataquis, Somerset, Hancock, Aroostook and Washington.

In the HMO plans, customers would pay a co-pay at the time of service for doctor’s appointments. Hospital services would require a deductible and co-insurance until the patient had reached an out of pocket limit. In Anthem’s POS plan, patients could pay a co-pay for two office visits per year, then would pay the deductible and the co-insurance split. Hospital services would require the deductible and the co-insurance until the out of pocket limit was reached.

Anthem does not offer a Medicare supplement plan on the exchanges, either, although they do have supplement plans off-exchange. According to Dugan, Anthem’s network meets or exceeds adequacy standards throughout the state in terms of access to doctors and hospitals.

Because there are few carriers in the individual and small group exchange market, and because the plans they are offering are so different from one another, a straight “apples to apples” comparison is not possible.

Trevor O’Connor says he is looking seriously at the MHCO co-op plan. “I already have a doctor who works out of Parkview,” he said. “And the price would be less for me. I wish we could keep the Dirigo system, though. That worked really well for me.” O’Connor says his Dirigo policy cost him $69 and change per month. The new policy, with the subsidy, will cost him about $97 per month.

He is hoping to get more information before he has to make a final decision. For O’Connor and people like him, more information is about ten days away when the government health care exchange website finally goes live at www.healthcare.gov.

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