What consumers need to know when shopping on Maryland's health care exchange

As of Tuesday, thousands of residents will be able to log onto the state's health care exchange, the Maryland Health Connection, to browse for medical insurance and even buy a policy.

The exchange and others like it across the country are considered key to getting the uninsured insured, which in Maryland is estimated to involve as many as 800,000 people.

The Maryland exchange will feature 45 plans offered by six private carriers.

"Maryland Health Connection is not government-run health insurance. It's a store," said Becca Pearce, executive director of the Maryland Health Benefit Exchange, which runs the online marketplace. "We built a store, and the commercial carriers are putting products on our shelves."

It isn't for everyone.

Those already covered under Medicare or Medicaid don't need to buy a policy on the exchange.

If you get your insurance through your employer — which most people do — that should continue.

And the Affordable Care Act excludes some people from the mandate of buying insurance or paying a penalty. These include immigrants in the country illegally, members of Indian tribes and those whose incomes are so low that they don't have to file a tax return or find that insurance premiums eat more than 8 percent of their household income.

But those with modest incomes and no insurance — or very expensive insurance — should check out the exchange. They could be eligible for federal subsidies to help buy a policy — financial assistance only available through the exchange. Even workers with insurance on the job could receive a subsidy to purchase a policy on the exchange if they pay more than 9.5 percent of household income for self-coverage.

Final details on premiums and plans won't be available until the exchange opens for business at 8 a.m. Tuesday.

Policies will provide 10 core benefits, including prescriptions, emergency care and lab tests, as well as maternity and pediatric care. Maryland also will offer some standalone dental plans.

"There won't be a lot of variation in benefits covered, but all plans are designed differently and have different networks, different providers who are participating and different cost-sharing," said Carolyn Quattrocki, executive director of the Governor's Office of Health Care Reform.

For those who need help, the exchange will have so-called navigators who can assist with enrollment. You also can phone the exchange's call center at 855-642-8572, which will answer questions in dozens of languages.

Or you can seek the help of an insurance broker. Maryland Health Connection has trained more than 800 brokers to sell plans on the exchange, Pearce said.

Here are some things to know before shopping in this new marketplace:

Open enrollment Consumers can purchase a policy from Oct. 1 through March 31. Thereafter, you will have to wait until open enrollment each year. However, you can purchase a policy outside of open enrollment if you have a life-changing event, such as a marriage, birth of a child or you lose a job along with your insurance.

Next year's open enrollment will be shorter, running from Oct. 15 through Dec. 7, Pearce said.

Getting started You will need to set up a secure account on the exchange's website at marylandhealthconnection.gov.

If you think you may be eligible for a subsidy, you will be asked to provide financial information to determine if you qualify.

Consumers will be able to shop for coverage by searching by insurance company, type of policy or under your doctors' names to find out which insurance they accept.

"You can enter up to three or four different doctors and find out what the best match is for you based on the participation rate," Pearce said.

The system will pare down the plans, and you will be able to compare policies side-by-side, including deductibles and out-of-pocket costs.

Bronze to platinum Policies will fall under categories of bronze, silver, gold and platinum. These refer to cost-sharing or how health care costs will be divided between you and the insurance company.

Bronze policies will have lower premiums, but that's because consumers pick up a bigger share of costs. Under bronze plans, the insurer assumes 60 percent of the medical costs, with the consumer paying 40 percent. The insurer's share is 70 percent under a silver plan, 80 percent in a gold plan and 90 percent for platinum.

Still, there's a cap on how much an individual and family must pay out–of-pocket annually. Next year, the limit is $6,350 for an individual, and double that for a family.

Premiums You no longer can be charged higher premiums for being in poor health. But premiums can vary based on age, where you live and whether you smoke. Older consumers who tend to be heavier users of health care can't be charged more than three times the premium for a young adult. Smokers can be charged up to 1.5 times more than a nonsmoker.

The cost of running hospitals or doctors' offices can vary by locale, which is why geography plays a role in premiums, said Jennifer Tolbert, director of state health reform with Kaiser Family Foundation.

All the premiums won't be available until the exchange opens. But the Maryland Insurance Administration — which approves rates — released a sampling of estimated premiums. For instance, the monthly premium for a BlueChoice bronze policy for a 25-year-old nonsmoker would be $124 in Baltimore and $114 in Western Maryland.

Catastrophic policies Exchanges are required to offer a catastrophic policy for those under 30. These high-deductible policies typically appeal to young, healthy individuals because the premiums are lower, yet they'll have coverage in case of a major medical event.

Maryland's marketplace will offer three catastrophic policies.

But older consumers who can't find a policy on the exchange that costs less than 8 percent of their income will be able to buy a catastrophic policy, too, Tolbert said.

The deductible — how much you must pay before the insurance kicks in — on these policies is expected to equal the annual out-of-pocket limit, which next year is $6,350 for an individual, Tolbert said. The policies, however, also must cover up to three primary care visits annually and preventive care at no cost.

Medicaid Maryland is expanding Medicaid by raising the income eligibility. Consumers who earn up to 138 percent of the federal poverty limit will be entitled to coverage at no cost under that program beginning next year.

Consumers in the Medicaid program now don't need to take any steps; they are already covered, Pearce said. Going forward, consumers enrolling in Medicaid will do so through the exchange.

Subsidies Lower-income people who don't qualify for Medicaid may be eligible for two federal subsidies to help with premiums and cost-sharing.

"People ask, 'How is it possible that I am going to be able to afford health insurance in 2014 when I have never been able to afford it before?' It's because of these federal subsidies," Pearce said.

The premium subsidy will be on a sliding scale for those with income of up to 400 percent of the federal poverty level — with the largest subsidy going to those with the lowest incomes.

For example, if you earn 133 percent of the federal poverty level — $15,281 this year for an individual — you will be expected to contribute 2 percent of income for insurance, or $25.47 per month. The federal subsidy will pay the rest, a benefit that could be worth hundreds of dollars each month.

Earn 400 percent of the poverty level — $45,960 this year for a single person — and you would contribute 9.5 percent of income for insurance, or $363.85 per month.

The subsidy is a tax credit that you can choose to be paid directly to the insurer or to be claimed later on your federal tax return, Pearce said. Or, you can elect a combination of these two methods — taking a reduced subsidy during the year and claiming any unused subsidy later on your tax return.

Most people will likely have the subsidy sent directly to the insurer each month, Pearce said. But be aware: If your income goes up during the year, you might end up receiving a bigger subsidy than you're entitled to and have to return that overpayment to the government, she warned.

The cost-sharing subsidy reduces a consumer's share of medical costs and is available to those making less than 250 percent of the federal poverty level.

You must be enrolled in a silver plan in which the insurer picks up 70 percent of medical costs. The subsidy can reduce your share of the medical bills from 30 percent to 27 percent, 13 percent or as little as 6 percent, depending on your income.

Penalties Unless you don't have to file a tax return or fall into one of the other excluded categories, you will have to have health insurance next year or face a penalty. Parents, too, must make sure their young children are covered, Tolbert said.

In 2014, the penalty will be $95 per adult and $47.50 per child — with a family total of no more than $285 — or 1 percent of income, whichever is larger.

Penalties get bigger with time.

By 2016, the fine will be whichever is larger: 2.5 percent of income or $695 per adult and $347.50 per child, not to exceed $2,085 for a family. Thereafter, those dollar amounts go up with inflation.

You won't owe a penalty if you're without insurance for less than three months. And the penalty will never be larger than the national average cost for a bronze plan.

There's been much speculation about whether younger consumers might just pay the penalty and forgo coverage.

Young and healthy people are just one car accident way from thousands of dollars of medical bills, Quattrocki said.

"It may be cheaper, but you aren't getting health insurance," she said.

Maryland Health Insurance Plan This program was created years ago to provide coverage for residents unable to get insurance because of a pre-existing condition. The Affordable Care Act prohibits insurers from using pre-existing conditions to deny coverage.

About 21,000 Marylanders are in this plan, and around a third of them will be eligible for a federal subsidy to buy insurance and shifted to the exchange at the beginning of next year, Pearce said. The rest can remain in MHIP for now or go to the exchange.

Buying a policy The first payment will be made through the exchange, but thereafter premiums will be paid directly to the insurer. You must pay that first premium for the insurance to take effect.

To ensure coverage beginning Jan. 1, purchase insurance by Dec. 15, Pearce advised.

Wait longer, say Jan. 3, and the earliest that coverage will kick in is the first day of the next month.

Pearce predicted that there will be a surge of interest by consumers checking out the Maryland Health Connection in October. But she doesn't expect a jump in sales until early December by those wanting coverage starting in January and again in March, before open enrollment ends.

Visitors to the site might notice changes in the months ahead.

"What we go live with on Oct. 1 may not look the same as it does by the end of March because we will continue upgrading and making things better," Pearce said.


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