With Health Exchanges Opening Soon, Consumers Start To Focus

If the volume of reader email is any indication, people are finally thinking hard about how the health care overhaul will affect them.

Online health insurance marketplaces will open in less than a month. Some people who get insurance through employers want to know if it's OK to buy a plan on an exchange instead. The answer is yes, but the purchasers may not qualify for subsidies.

Those with individual coverage want to know how the plans will compare with what they already have. The answer: Generally better coverage and potentially higher premiums, offset by subsidies for some people.

And those who have been unable to afford a plan or were turned down because they have medical problems want to know if the marketplaces will provide better options than they currently have. The answer to that one is that they should.

As I read through the emails, what's striking is the complexity of some of the health insurance problems people are trying to sort out. Getting answers will be no simple task. The navigators, certified application counselors, brokers and others whose job it is to help people figure out the new insurance landscape are going to have their work cut out for them.

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

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

Or what about coverage options for an infant whose young adult 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.) This particular couple's child has been covered since birth under the state's insurance plan for low-income kids, but one of the young adult parents recently received a raise. Now the couple's income exceeds the eligibility threshold. Neither of the young adult parents has access to health insurance through their jobs.

"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 Medicare prescription drug coverage in 2006. At first, beneficiaries trying to enroll encountered snags in getting accurate information.

Here's a case in point. A woman writes in asking about coverage options for her family, including their two kids with special medical needs. "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," she writes. "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?"

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. And 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.

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."