Confused?: Answers about the Affordable Care ActConfused about the Affordable Care Act? Unsure about MNsure? You’re not alone.
By: John Lundy, Duluth News Tribune
Confused about the Affordable Care Act? Unsure about MNsure?
You’re not alone.
“I’m confused,” said Duluthian Lynn Newberg, whose Type 1 diabetes makes her health insurance complicated. “I’m college-educated. I read the Minneapolis paper and the Duluth paper every morning. I shouldn’t be as confused as I am.”
In a Washington Post-ABC News poll earlier this month, more than six in 10 of those surveyed said they didn’t have enough information to understand the changes the law will bring. A Pew Research poll this month also reported just 25 percent of respondents saying they had a “very good” understanding of the law and how it would affect them.
Yet some aspects of the law — such as a provision requiring insurance companies to include adult children in coverage up to age 26 — already are in effect. And in two days, the online health insurance marketplace will open in all 50 states and the District of Columbia: That includes Minnesota’s version, MNsure, and the federal version to be offered in Wisconsin and 26 other states. The Obama administration hopes that 7 million currently uninsured Americans will sign up on the marketplace by March 30, when enrollment ends.
As the Oct. 1 start date approached, the News Tribune asked readers what questions they had about the Affordable Care Act, the health insurance marketplace and other aspects of health reform. The questions ran the gamut from what happens if you don’t buy insurance to what happens after Minnesota Comprehensive Health Association coverage ends.
We adapted the questions for a more general audience and took them to the experts. Here’s what we learned:
Q: How are people on Medicare affected by the Affordable Care Act?
A: If you have Medicare you don’t need to look for coverage in the online marketplaces, said Catherine Sampson, director of the Arrowhead Area Agency on Aging.
Sampson shares a warning from the Better Business Bureau that scammers will try to convince senior citizens they need new coverage. It’s particularly rife for fraud because the open enrollment period for Medicare (Oct. 15 to Dec. 7) is similar to the enrollment period for MNsure and other insurance marketplaces, which begins Tuesday.
But if you are 65 or older, Medicare is your insurance coverage, Sampson said.
She underscored information from the U.S. Department of Health and Human Services: It’s illegal for someone who knows you have Medicare to try to sell you an insurance marketplace plan. And never share your Medicare number or other personal information with anyone who knocks on your door uninvited or contacts you to sell you a health plan.
There were improvements in Medicare benefits beginning in 2010 when the Affordable Care Act was passed, Sampson said, so recipients are affected by the act. But Medicare isn’t being replaced.
Q: What happens if I decide not to purchase health insurance? What’s the penalty, and how will it be assessed? What if I can’t pay the penalty?
A: In 2014, the penalty for an individual is $95 or 1 percent of your taxable income, whichever is greater, according to the Congressional Research Service and the Better Business Bureau. The maximum for a family is $285. The penalty increases in succeeding years.
If there’s a fine, it will be assessed on your 2014 income tax that will be due April 15, 2015. You can’t go to jail for failure to pay and the government can’t garnish your payment. The most likely punishment, the BBB said, is that the IRS would withhold your tax refund.
Some groups are exempt from the requirement, including those whose income is below the federal threshold for filing taxes, and those with Indian tribe memberships.
Q: If you want to claim an exemption, how do you do that?
A: The federal government is working on a process to apply for the exemption, said Jenni L. Bowring-McDonough, spokeswoman for MNsure. Minnesotans can apply for an exemption from the mandate on their 2014 taxes.
Q: Under the Affordable Care Act, can adult children remain on their parents’ insurance until they turn 27, or only until they turn 26?
A: This provision ends on your offspring’s 26th birthday, said Jenny Peterson, executive officer of Duluth-based Generations Health Care Initiatives.
Q: We’ve been told that people who have been enrolled in Minnesota Comprehensive Health Association, or MCHA, coverage now will have to obtain coverage through MNsure. Can you explain how this transition will work? Will the coverage level remain the same?
A: MCHA is being phased out, said Kirby Erickson, executive director of the program that was established in 1976 to cover Minnesotans excluded for coverage in the private market because of pre-existing conditions. It currently covers close to 26,000 Minnesotans.
Since insurers must provide coverage to those with pre-existing conditions under the Affordable Care Act, the program is no longer needed, Erickson said. Those already enrolled in MCHA can keep their coverage through 2014, but no new enrollees will be accepted after Jan. 1, he said.
MNsure is one of several avenues those previously covered by MCHA can take, Erickson said. They also can go through agents and brokers or directly to a carrier, such as looking on an insurer’s website.
Coverage levels will vary depending on what the individual chooses, Erickson said, so no direct comparison can be made with the existing coverage under MCHA:
Q: I’ve heard that you can buy health insurance right before you need it, drop it once the bills are paid, and reapply if you need it again. Is that true?
A: That wouldn’t be easy. Bowring-McDonough noted that enrollment can only take place during open enrollment periods, unless you have a “qualifying life event” such as getting married or having a child.
Q: What happens if a person starts health insurance and gets behind on payments? Is there a grace period?
A: If you are receiving a tax credit, there is a 90-day grace period for payment, Bowring-McDonough said. If you do not receive a tax credit, it’s 30 days.
Q: How will Modified Adjusted Gross Pay work when one spouse is retired and on Medicare and the other is on MNsure? Will the combined wages be used, or will the couple have to file separately to qualify for a subsidy?
A: This depends on how you file your taxes, Bowring-McDonough said. A married couple applying for a tax subsidy must file jointly.
Q: Under MNsure, can insurance companies offer insurance in some counties but not in others?
A: They can, Bowring-McDonough said.
Q: Are you allowed to drop your employer-provided health insurance and choose a plan via MNsure instead?
A: You can do that, Bowring-McDonough said. But if the plan your employer provides complies with the Affordable Care Act and you choose to go through the MNsure marketplace, you might not qualify for a tax credit.
Q: Is there evidence that businesses are avoiding Affordable Care Act mandates by hiring more part-time employees? Is Congress considering doing anything to correct that?
A: Jenny Peterson of Generations pointed out that the requirement for companies with 50 or more employees to provide health insurance or pay a penalty was delayed, in a July 1 announcement from the Obama administration, until 2015. The issue nonetheless is drawing attention. The restaurant company that owns Olive Garden and Red Lobster recently retracted a plan to cut workers’ hours to avoid having to provide health insurance, the website Politico reported.
Peterson said she’s unaware of action by Congress on the issue.