Welcome to Health Reform Watch, Sarah Kliff’s regular look at how the Affordable Care Act is changing the American health-care system — and being changed by it. You can reach Sarah with questions, comments and suggestions here. Check back every Monday, Wednesday and Friday afternoon for the latest edition, and read previous columns here.
Days until marketplaces launch: 53.
Every now and then I take reader questions about what the Affordable Care Act means for them. And over the past few weeks, as we get closer to the new marketplaces launching, there have been no shortage of these queries turning up in my inbox.
Before we get to it, one quick programming note: Health Reform Watch will be taking next week off as I'm on vacation and plan to be largely unplugged. I'll be back with the column on Aug. 19, hopefully with a few great pictures to boot.
Nicoletta Skarlatos, a Wonkblog reader living abroad in Italy, writes, "I’m an American expat (self-employed and have been living in Italy for more than 10 years). I’m covered by the Italian national health system now so no need to purchase US health insurance. However, I will be moving back to the States (Chicago) in July of 2014 and would like to be covered immediately in the US.
"Do you know if the October-March sign-up period applies also to me or is there an exclusion due to my expat situation? Should I purchase health insurance by end of March in anticipation of repatriating in July or can I wait until I arrive in the States?"
First off, huge props to Nicoletta for knowing that the Affordable Care Act has an open enrollment period, which runs, for 2014, from Oct. 1 through March 30. Outside of that period, most people will not be able to purchase coverage through the marketplace, which is meant to prevent subscribers signing up the moment they get sick.
Second, this turned out to an incredibly difficult question to answer. The resources available on HealthCare.Gov explained why Americans abroad probably shouldn't buy health coverage (namely: it mostly covers medical services in the United States). But it didn't explain what someone returning from abroad ought to do.
Luckily, Affordable Care Act guru Tim Jost, a law professor at Washington & Lee University, was able to track down the answer for me. He pointed me rules published last March that govern the situations where Americans can purchase health insurance outside of the traditional open enrollment period. There are nine different events that qualify, including gaining a dependent (often insurance-speak for having a baby) or losing one's employer-sponsored coverage. Event number seven is: "A qualified individual or enrollee gains access to new QHPs as a result of a permanent move."
That's the part that is important to Nicoletta, or even anyone moving within the country: When you switch where you live, a special enrollment period becomes available to sign up for the new options that are available.
From Joe in New Jersey, "Having several serious preexisting conditions, and slightly over the 400% income limit, will I be able to get health insurance at 61 yrs old. Will Obama care be available for me but with no tax break? Or if available, will I have to pay a very high rate for high risk ins.?"
Joe's understanding of the Affordable Care Act is pretty spot on. As he mentions, tax subsidies only apply only to Americans below 400 percent of the federal poverty line ($45,960 for an individual). After that point, people are pretty much on their own to foot the bill for monthly premiums. They will get some benefits of the Affordable Care Act–an end to pre-existing conditions, in Joe's case–but affordability could be a challenge.
Health insurance companies are allowed to charge their oldest subscribers, like Joe, three times as much as their youngest beneficiaries, which means that his premiums are likely to be among the highest paid in New Jersey.
There is one escape valve: The health-care law has a hardship exemption from the individual mandate for those who do not find coverage that costs less than 8 percent of their income. For someone earning $45,000, hypothetically, that would mean that, if there were no available plans for less than $300, he could decide not to purchase coverage and still not pay a tax penalty.
One last question from Tom in Virginia, who writes, "Under the new Health Care Law, if an individual becomes unemployed due to a lay off, what income will be used to determine the monthly premium? In addition, where will the new exchanges be located in Northern Virginia (Alexandria, Arlington, Fairfax)?"
Excellent question: As Tom points out (and Joe, in his question right before this), income is crucial under the health-care law to determining the amount an individual pays for coverage. Losing a job will have a huge impact on the tax subsidy that one is supposed to receive.
There are consequences to getting your income right. Underestimate your salary and you might end up getting more tax credits than you qualify for, and have to pay those back to the federal government come tax season. Overestimate and you could miss out on financial help in purchasing coverage.
The marketplaces ask individuals to estimate their annual income on the application form. They also request that, if a major life event such as a job loss occurs, that the individual come back and report that change. Their tax credits will then be adjusted to reflect the new income estimate.
So, in short, it will be the income post-layoff that will be used to determine tax credits after the lay off occurs.
As to the second question, its unlikely that there will be a physical location for the Virginia health marketplace. Many applications will be handled online at HealthCare.Gov. Virginia will receive just over $1 million from the federal government to do outreach and enrollment work in the state. Those grants have not yet been awarded, so we don't know who, exactly, will be handling that research.
KLIFF NOTES: Top health policy reads from around the Web.
Deep-red Idaho is moving forward with Obamacare. "Of the 16 states that are gearing up to operate their own online marketplaces -- a central feature of the effort to expand coverage to millions of people starting in January -- Idaho is the only one where Republicans are in total control of state government. Republicans outnumber Democrats 4 to 1 in the state Legislature and only a third of Idahoans voted for Obama last fall – the third lowest tally nationwide." Phil Galewitz in USA Today.
Oregon's online marketplace won't open to the public until mid-October. "Though Oregon's health insurance marketplace will launch Oct. 1 as planned, there's one hitch. People will only be able to immediately purchase health insurance on it with certified insurance agents and 'community partners.' The online marketplace won't be fully accessible until mid October -- at the earliest." Soumya Karlamangla in the Oregonian.