They are. But you have to have bought a policy on the exchange, because exchange policies are the only policies that have subsidies. Calmom explained this in great detail at the end of 2013.
Dietz, when a person enrolls on the exchange, if their income level qualifies them for subsidies, they have a choice: they can take an “advance premium tax credit” payment-- or they can defer all or part of the advance credit until the following year.
Those of us who are self-employed – or flexibly employed (such as a part time worker with variable hours) - might not always know in advance what our income will be at year’s end. If our income is too high, we will have to pay back whatever we took in subsidies.
Last year I didn’t know, so I opted to split it down the middle - I took an advance tax credit of roughly half of what I thought I was entitled to if my income ended up slightly below the cutoff.
I guessed wrong – not really because of my earned income, but because I owned some inherited stock and I sold most of it with a market down turn. (And very glad I did) But that results in my income being pushed up by capital gains, so I am going to have to pay back the advance premium. So I decided that going forward I’ll just waive the advance premium, so in future years I won’t be faced with having to pay back a year’s worth of subsidies in one lump sum.
If I continue to buy on exchange, then I will be eligible for that tax credit. I can get Kaiser on exchange. The advantage of Kaiser is certainty: they are’t going to change their network or sell their hospitals.
I can get HealthNet on exchange, but only an EPO that doesn’t include my doctors. HealthNet is selling a different policy off exchange – a PPO that does include Sutter. But policies that are purchased off exchange are not eligible for tax credits. That’s because the whole purpose of the exchanges is to manage the tax credit & subsidy system.
It probably wouldn’t be much of an issue if I were younger. The problem is that premiums are at maximum levels for individuals in their early 60’s, and that also drives up the value of the tax credit or subsidy. In other words, a very rough calculation tells met that if my income comes in low enough to qualify for a subsidy - roughly $45K for single person – then the maximum I should have to pay out for insurance is about $375/month But the price for an individual policy at my age is about twice that for a bronze level policy, over $1000 monthly for a silver.
Hey, thanks Calmom and CF…I did not know subsidies could be retroactive. We will be able to take both kids off of our policy this year. We could take D off right now but the price stays the same unless both are dropped. S has a study abroad plan which will require he take out a policy sometime around June. So, if I understand the rules correctly, this is a qualifying condition for changing policies. By June we will have a much better idea of not only our income but also know the outcome of the whole Sutter/PAMF BS pi$$ing match. Sounds like we could get at least half a years worth of subsidies/credits.
Your son having a study abroad program requiring him to get coverage may be a qualifying condition for him, but I doubt it’s a qualifying condition for you.
Dietz, your son needs a different type of insurance for study abroad and I don’t think it would be a qualifying condition for anything. He needs a traveler’s policy – and those policies are written with the assumption that the traveler has regular insurance coverage at home – they will pay for local medical care, and if necessary they will pay evacuation costs to get him home, but the coverage wouldn’t continue once he arrives home.
However, a change in income is qualifying, so you probably could get an exchange policy outside the open enrollment period by reporting that your income has dropped. Do keep in mind that your deductible runs from whenever your policy starts – so if you were to run up your deductible for policy #1, that wouldn’t carry over to policy #2 – you’d be starting fresh. Just one more factor to consider.
However, in my case with BCBS, if you change exchange plans mid-year, the amount paid toward deductible, to-date, carries over. If you move from a high ded exchange plan (where, let’s say, you had already paid in 1000 ded) to a lower ded, no rebate, but credits against the new plan’s ded. Here, the BCBS products are essentially the same, whether indiv or exchange. It’s the tax subsidy and cost-sharing (incl lower deductibles) that benefit the client, via the exchange. But again, my state may be unique.
Just a word in defense of insurance companies like HealthNet with the EPO/PPO thing – part of the problem is over-regulation by Covered California. CoveredCA dictates all the basic specs for various metal categories - even though there is more flexibility built into ACA – so in California, all metal plans on the exchange have the same deductibles, the same copays, etc. And each company can offer only one plan in a category-- so HealthNet wouldn’t be able to offer both the EPO & PPO on the exchange --they need to choose one.
Add to that the fact that the plans will be displayed together, with the main distinction being price - there is no easy way for a particular plan to advertise that it has a better network, or offers some other perks that differentiate it from the others. So in my area, HealthNet is already at a competitive disadvantage on the exchange - Anthem Blue Cross comes in with lower priced policies – it makes economic sense for them to develop a lower-cost plan (the EPO) and list that one on the exchange. After all, the exchange is targeting a lower economic demographic.
It doesn’t have be that way --other states allow for more flexibility with companies on their exchanges. So it’s quite possible that if given the option, companies that have developed multiple plans would be happy to sell everything they offer through the exchange. It actually make more marketing sense to them – if you are familiar with the concept of upselling. That is, HealthNet could list a plan with premiums that “start at” $X, and when you choose them, offer you the opportunity to opt for plans with more features within that metal category, at an added cost. That also would give consumers a much more clear picture of the way that the networks relate to premium costs – maybe if people were going online and finding that Company A sold an EPO for $500/month and a PPO for $650 a month, with the differences clearly spelled out, the customers would be happier and the insurers would have a better sense of what their customers wanted.
@lookinforward, would that apply if the person is staying on the exchange, but changing companies? Inherent in the discussion that Dietz and I are having is the need to change to a different insurance company, because of differences in networks.
I had just realized I left that mis-impression, sorry. Same insurance co. Yes, you have various complicating factors in CA that we don’t. It was meant as a general comment.
Things are in a state of flux…and look they they will be remaining in a state of flux for the foreseeable future.
It is quite probably that it will be necessary/beneficial to change plans and doctors every year based on the market offerings. Not really a good way to achieve healthcare continuity but regretfully necessary. I figure it will be a major undertaking before each renewal period. It’s going to require detailed research on networks, subsidies etc. Ugh.
As for the qualifying conditions… S is currently under out plan, he/we could at any point move him to his University plan and drop him from ours. D is working and covered by a great plan…she/we could again drop her from our plan at any time. I thought the dropping of a dependent, because they now have their own insurance, is a condition which allows the remaining members to change plans. But I really have dug deeply and could be quite wrong.
I look at the ability to change plans as a very very big positive.
As much as I have talked about Kaiser, Kaiser is not a UCSF or a Stanford.
I may change plans someday.
I wholeheartedly agree that being able to change plans is great. The issue is when one MUST change plans because of annual network/provider/policy changes. I’m not very familiar with the subsidy issue but Calmom has explain the need to change your plan if a new offering is the base level plan and your existing one is now more highly featured and expensive (okay, not explaining that too well but hopefully it gets the point across).
In my 6+years with the current BS PPO plan there have been no major network changes. Coverage and cost changes - yes. But, the coverage and cost changes are much easier to identify - especially now that a standardized explanation matrix is required. The network, plan level and subsidy issues are not at all transparent. So, this will require the informed consumer to annually - possibly even more often - re-evaluate their options. This really wasn’t the case in prior years.
Kaiser is an exception in that they have a completely different model.
There have been major network changes in the past, including with Blue Shield, with large employer network plans, as well as down-to-the-wire negotiations about inclusion. The reason is that has always been a more competitive market, with greater pressure to compete on premium costs. On an individual level, an increase of $75 monthly in premiums is insignificant – for a company with 800 employees, it’s huge. Add to that the fact that while an individual may care a lot, about which doctor is in the network, the company CEO probably doesn’t — their prospective employees will want to know whether he company has “a” health plan, rarely do they ask “which” health plan.
One goal of ACA was to help contain costs, but it largely eliminated the ability of the insurance companies to save costs by limiting or reducing benefits. No annual or lifetime caps, no policies with $10K individual deductibles, etc. And Covered Cal made things even tougher by not allowing any variation in the basic structure of deductibles & copays at the various metal levels – so not much room for any creative cost-savings measures there either.
So that leaves only two ways that I see to contain costs - (1) control the networks to favor lower cost care providers, and (2) introduce other measures intended to make health care delivery more efficient and steer customers toward lower cost alternatives. #2 is a better plan, but harder to implement.
I’d note that the idea of a PPO was originally introduced as a cost-savings measure – it replaced the older style indemnity policies where the customer simply went to whatever doctor or hospital they chose, the insurance company determined “usual and customary” rate, and paid an agreed percentage of that until the patient met their annual deductible.
So in a sense, ACA is working to do what it was intended to do: it’s put pressure to contain costs, especially on the individual market. For those of us who enjoyed reasonably priced insurance in the past, it seems like a step backward – but pre-ACA the major cost-savings strategy on the individual market was to avoid selling insurance to sick people and to price the most costly patients out of the market. I’m now faced with paying the level of premiums now that younger, sicker people were being quoted half a dozen years ago, if they could get insurance at all.
I think if you support a market-based (capitalist) system for health care, then the ACA is “working” as intended. It’s created market-based incentives that encourage insurance companies to want to outbid one another and controlling their networks seems to be quick & dirty solution to that problem.
Quick update for me - still in the “no real news” department, but I thought I’d share my experience to save someone else the trouble of a phone call. I called the Health Net sales line, told the intake person my basic concerns & provided home address, and she forwarded my call to a sales agent in … Texas. He was very nice and knowledgeable about ACA in general, clueless about what is going on in California, and said that I’d probably have to contact a Health Net executive to answer my question about what their ongoing contract with Sutter is.
I’m still leaning Kaiser. Health Net would have won many brownie points if they had been prepared for this inquiry – they could have managed that easily with a memo to their sales agents. It’s not as if I am the only Californian shopping right now… though maybe when it comes down to it, Health Net is in no particular hurry to sign up more Sutter-users. (I mean, I’m basically calling up and saying, “Hi, I’ve chosen to use the most expensive health care provider possible in my area! My other insurance company doesn’t want me any more – would you guys like me as a customer instead?” Maybe they are being smart to make that process as unfriendly as possible).
My rationale is something like this: Health Net would mean the highest cost premium for me, and the Sutter coverage would require going off exchange. I would have the convenience of keeping my own doctor, but right now I only have very routine health care needs that really can be handled at any facility. On the one hand, if I were to develop serious health problems, I’d want to have the best care possible - but I’d have to go off exchange for Health Net, and it is likely that serious health problems would also result in loss of income. So I wouldn’t have choice or continuity of care in that situation anyway: I’d end up having to come back to the exchange in any case.
If I go to Kaiser, the premiums are about $100/month lower than what I’ve been paying with Blue Shield, about $120/month lower than the off-exchange HealthNet PPO. So for 10 months in 2015, that’s $1000 that can be banked (and will be, because I’d opt for the Kaiser HSA plan) – and used if I choose for out-of-network care or consultation if I wanted. My net costs last year for out-of-pocket medical costs - the amount applied to my deductible – was under $750 – so if 2015 looks like 2014 in terms of health care needs, I could save money on Kaiser and still see my PAMF doctor if for any reason I didn’t like the Kaiser doctor. (I probably won’t, but the point is that it remains an option ) But if I get a more serious situation, Kaiser guarantees me continuity of care. It might not be the best care on the planet, but at least it is certain to be there. No annual shopping around required. Just 4 years of Kaiser. Year #5, I move to Medicare.
My experience with Kaiser is vicariously through my parents. I can confidently say that Kaiser (at least in SF) has been fantastic. They have a wonderful coordination of care. I am my mom’s advocate and every time I call I get a helpful person. Her doc’s answer emails within 24 hours or even faster. Her eye, heart, GP, ER, and lab contacts are very willing to work with me. Mom has had numerous procedures in the past 10 years. Each time it seem Kaiser has improved on another level. I’m finding that certain locations excel at certain things. SF seems to be top notch in Cardiac.
As for H and myself, Kaiser is not available in our zip code. Ironically, it’s easier and faster to get to a Kaiser facility than it is to get to many of our ‘local’ providers. Still hoping they officially come to the county…so if need be we can officially join and sit out this ongoing mess until it settles a bit. If the aren’t here officially…well…it’s time to get creative.
Just got off the phone with broker yet again. We are in agreement that the coverage issue will need to be re-evaluated in depth each and every year for the foreseeable future…unless of course tonight speech changes things
;))
Insurance companies don’t care what exchange customers want, though. Since they are required to buy something and the government has made the rules and is picking up the tab why would they care.
Oh heavens to Murgatroyd…how does one make any sense of this mess. Broker got back to me today. After grilling BS on what constitutes a group and what constitutes an employee under the ACA I now have new info that contradicts previous info.
So, BS says if we ( H and W owned business - who no longer qualifying as an ACA group) hire one our our kids they would accept us as a group. This information is in writing and in our file. Hmmm… so let me see…the ACA says a group can no longer be an H and W, but needs to include a W2 employee who is NOT a family member. But, BS will let us be a group with a minimum wage employee who is our kid and says they don’t care how it works out behind the scenes.
No clue if this is carrier dependent. If this applies only to off exchange (non SHOP) policies…or WTH! So, can we hire D - who is employed and covered by her own plan - have her opt out of our ‘group’ policy - give her a minimum wage salary out of our company earnings which is then a business expense thus reducing our taxable income, keep the money in the family, not pay for her health insurance and continue group coverage.
Yup…clear as mud.
Aside from the insurance issue, is it legal to “hire” your daughter in your company and pay her out of your company earnings? I’m not familiar with small business law, but it seems like the IRS might be on to this way of reducing your corporate earnings. I guess maybe the IRS doesn’t care because she’d be liable for individual tax on the income? You’d have to pay not just minimum wage, but also her withholding, right?
Yes, D or S would be a full legal employee with all the withholding and payroll stuff. It most likely wouldn’t pencil out. It’s a spread sheet question. Just so weird that BS would let us qualify in direct contradiction to ACA rules.
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