Exchanges opening for uninsured

For small-business owner Leslie Dicharry, health insurance eats up about a third of her income.

That’s even before she chips away at a $2,800 deductible, the amount she would have to spend before the Blue Cross and Blue Shield plan starts covering her medical expenses.

Those costs have made Dicharry, who runs Nanny Doolittle’s Pet & Home Sitting Service in Baton Rouge, acutely aware of the opening of the federally run online insurance marketplace on Tuesday.

She’s plugged her income into an online calculator, figuring out how much financial assistance she might be able to tap into through the government marketplace. If it’s correct, she could buy one of the most expensive plans offered and come out ahead of where she is now.

“I’m thinking I could probably do a platinum plan and still save money,” Dicharry said.

The launch of the online marketplaces, coinciding with the Oct. 1 start of the federal fiscal year, will for most Americans be the first tangible aspect of Obamacare — the controversial health care law passed in 2010 that has remained at the center of a bitterly partisan debate over the role of government in Americans’ lives.

For many Louisiana residents, including hundreds of thousands of those who are currently uninsured, the marketplaces will provide an opportunity to purchase health coverage, sometimes with sizeable subsidies that make insurance much more affordable.

The challenge for state and city officials, hospitals, community clinics, non-profits and advocates will be letting people know it is available, particularly those who’ve always been uninsured and made do. Then, there’s making it comprehensible: Comparing a multitude of health plans and their varying levels of benefits, co-pays, deductibles and premiums could prove a daunting experience for many people new to health insurance.

Under the Affordable Care Act of 2010, the marketplaces will be open to anybody, from those like Dicharry who currently buy insurance on the so-called individual market, to people covered by employer-provided insurance. Subsidies to make the insurance plans more affordable, however, will only be available to families with incomes between 100 percent and 400 percent of the federal poverty level who lack access to quality, affordable health insurance through employers.

Those happy with their employer-provided insurance plans don’t need to bother with the online marketplaces. Senior citizens on Medicare, too, won’t be affected.

The entryway into the marketplace will be, where prospective buyers can check out the available plans in their parishes and compare the amount of coverage at different price points. People without Internet access can call 1 (800) 318-2596 for help.

Coverage, if purchased and paid for by Dec. 15, will start January. Next year, for the first time, every individual in the country will be required to have health insurance coverage — although there are scores of caveats to that mandate — that will subject many of those who remain uninsured to a tax penalty.

In Louisiana, customers will find insurance plans from two to four companies, depending on where they live. The plans are branded according to how much coverage they provide — the most expensive “platinum” plans to the cheaper, less comprehensive “bronze” ones. For younger people there will be “catastrophic” plans with high deductibles that will cover some preventative care, like an annual check-up, but mostly serve as a stopgap in case of a serious illness or accident.

In larger markets, such as the Baton Rouge and New Orleans areas, there could be dozens of plans available, according to data released by the federal government.

Mike Reitz, president and CEO of Blue Cross and Blue Shield of Louisiana, said his company — already dominant in the state’s insurance market — will have a couple hundred plans available, with offerings in every ZIP code.

For Insurance Commissioner Jim Donelon, the upside of the new marketplace is the increase in competition he expects it to bring.

“I welcome that competition in the health insurance marketplace because we are one of a handful of states that does not regulate the cost of health insurance,” said Donelon, who over the years has bemoaned Blue Cross’ market share in Louisiana. “I’ve asked the Legislature several years running now to pass a bill to give me that authority. That has not happened as of yet, so the only check on health insurance premiums in our state is via competition.”

Along with Blue Cross, Vantage Health Plan, a Monroe-based company, will offer plans in most parishes, with the exception of a few in Acadiana. Humana also will have some offerings on the marketplace, although a spokesman declined to say exactly where in the state. Donelon said he expected Humana to only offer marketplace plans in Jefferson Parish.

One new entrant into the market is Louisiana Health Cooperative, a nonprofit started last year with a $65 million federal loan. Jim Pittman, a spokesman for the company, will offer “point of service” plans in each parish, along with less expensive HMO coverage in four regions: New Orleans, Baton Rouge, Shreveport and Lafayette.

How much people will pay for coverage will largely depend on their income.

Most everybody agrees that health premiums will generally rise, although a recent federal analysis predicted the increase would be less than originally expected. The hikes stem from a variety of causes, from new taxes levied on insurance companies to help lower-income people pay for coverage to an increase in services that the plans must cover.

Starting next year, insurers will be required to pay for certain preventative services, like annual check-ups and vaccines. They will be required to cover maternity care, mental-health care and substance-abuse treatment. Most critically for people with ongoing medical problems, companies will also be prohibited from screening out customers with pre-existing conditions.

The bottom line for certain consumers could be steep. A 30-year-old covered by a Blue Cross catastrophic plan with a $2,500 deductible will go from paying $160 a month to $294 a month, Reitz said.

But customers who qualify for subsidies based on their incomes, could actually end up paying less than before, he said.

A U.S. Department of Health and Human Services analysis of the plans that will be offered on the Louisiana insurance marketplace found that a 27-year-old with an income of $25,000 — low enough to qualify for subsidies — would pay $145 for a “silver” plan that should provide better coverage than a catastrophic plan.

In Louisiana, the subsidy assistance could help about 350,000 uninsured people, according to state analyses. The assistance will be most generous for those at 100 percent of the federal poverty level, or $11,496 for an individual and $19,536 for a family of three. The subsidies are capped at 400 percent of poverty, or $45,960 for one person and $78,120 for a family of three.

Consumers at the higher income levels eligible for subsidies will have to figure out whether they are worth it, Donelon said. A person near the 400 percent level who gets a raise that pushes his income above that threshold would have to pay back the subsidy.

“CPAs, insurance agents, tax attorneys will pull their hair out trying to advise clients on whether it’s a good business decision or not,” Donelon said.

Exactly how many people could end up buying insurance through the exchanges is not entirely clear, as the number of uninsured people in Louisiana itself is a subject of debate. Some surveys by national groups conclude there are as many as 900,000 uninsured Louisiana residents. A 2011 LSU study pegged the number at 634,000 people.

The group the marketplaces and federal subsidies will not help are the poorest — those with incomes less than 100 percent of the poverty level. The state Department of Health and Hospitals believes that group numbers at least 214,000 in Louisiana; those people will have to continue to seek medical care at through the state’s safety-net hospitals. The original federal law envisioned that those families would be covered by a required expansion of Medicaid, the federal insurance program for the poor that is managed, and partially financed, by state governments. Louisiana is generous in offering Medicaid coverage and other insurance coverage to poor children, but it’s difficult for adults to get enrolled in the program unless they are disabled or pregnant.

However, the 2012 U.S. Supreme Court decision that upheld the federal health law ruled that the Medicaid decision was optional. The health law calls on the feds to pay for all new Medicaid enrollees starting next year, eventually scaling the subsidy back to 90 percent of the cost — still much higher than the federal government’s current share for Medicaid participants. But Gov. Bobby Jindal has decided not to expand the program, saying that the eventual costs to the state are too high and that the federal program is fundamentally flawed.

For those eligible for the marketplace, deciding what kind of plan makes the most sense will be one challenge.

Cheryl Fish-Parcham with Families USA, a group that advocates for the health law, said consumers should first figure out what kind of monthly premiums they can afford. But consumers also need to think about how much they will use the plan. That means looking at the deductible — how much the insured person has to pay out of pocket before the insurer begins to pick up the bill — and the co-pays charged for doctor visits, she said.

“People have to think of whether having higher premiums is better than a higher deductible,” Fish-Parcham said.

Healthier people might decide they can get by with a more bare-bones insurance plan, while people who frequent doctors and specialists will need to keep an eye on how much they have to pay for each visit.

People also need to look closely at the network of providers offered by plans, figuring out if the doctors they want to see are available. Those on prescription drugs must scrutinize what the plan will cover and at what cost.

Some consumers might be able to make these decisions on their own. But many, including those without reliable Internet access, could end up perplexed.

Insurers are encouraging consumers to use licensed brokers, saying they are accustomed to helping people sort through the particulars.

Another option will be “navigators” hired by four nonprofits around the state, who will be trained to help consumers weigh the plans and subsidies and see what works for them. Exactly how much of this help will be available this fall is unclear.

Kathy Kliebert, secretary of the Louisiana Department of Health and Hospitals, said she’s concerned that the navigator organizations only recently received their federal grants. “These very compressed timelines make it difficult to have adequately trained staff,” she said. “It is a complex issue.”

Brian Burton, director of Southwest Louisiana Area Health Education Center, which was awarded a $1 million grant from the federal government to hire navigators throughout the state, said his team is planning both educational outreach and, eventually, will help people sign up.

The group’s 17 navigators — who are in the process of being hired, trained and certified — will carry laptops, portable scanners, prints and aircards, so they can help people fill out applications and process them on the spot, Burton said.

“Our job is going to take things that are very difficult and bring them down to a simplistic manner, look at plans side by side,” Burton said.

Linda Beauvais, executive director of Capital Area Agency on Aging District II Inc., said the nonprofit has two full-time navigators, who have completed certification, and two other workers who will help out when they have time. The agency received a $100,000 grant to help enroll people.

“We said we would enroll up to 2,000 people, somewhere in the neighborhood of 2,000 people, that we would reach out and provide information to somewhere around 10,000 people,” Bauvais said. “That still feels doable.”

The group will target people from age 50 to 64 and will also work with small employers who serve the elderly and disabled, such as nursing homes, councils on aging, and home health agencies, she said.

Navigators won’t be the only help available to those who need a guide. In Lake Charles, for example, Burton spoke with one hospital that will have four counselors to talk to people about getting insured. And throughout the state, federally qualified health centers have received federal grants to help sign up their patients, many of whom are uninsured.

At the Daughters of Charity clinics in New Orleans, for example, president Michael Griffin estimates that as many as 10,000 patients could qualify for subsidies to buy insurance.

Even the Jindal administration, which is otherwise opposed to the federal health law, is planning to help. Kliebert said her Medicaid eligibility staff have all been trained on the basics of the marketplaces and will refer eligible applicants. “There is going to be some confusion, lots of issues,” said Griffin.

“At the end of the day, the general population will be better because these programs are being implemented.”