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Health Care Insurance Questions and Answers

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New law can be confusing, but there are people who can help you sign up.

One thing is certain about the Affordable Care Act -- it can be confusing, says Kim Jones, with the South Dakota Navigator Coalition.

Jones is one of 17 individuals in the state trained to help guide South Dakotans through the signup process.

South Dakota Farmers Union brought Jones and other South Dakota health insurance industry experts together at its fall conference to answer questions about the ACA. Besides Jones, the panel included: Erik Nelson, South Dakota AARP; Jennie Nickles, Sanford Health; and Warren Graber Graber & Associates Insurance, Inc.

Question: With all the technical difficulties, where can I go for information and insurance options?

Health Care Insurance Questions and Answers

Jones: Consider giving myself or another Navigator a call. You can find contact information for your local Navigator online at www.interlakescap.com. Also, I encourage you to visit the Kaiser Family Foundation website kff.org. The site is very helpful.

Question: I received a cancellation letter from my insurance company, what does this mean?

Graber: Some of what I'm going to say may change following the Presidents Nov. 14 announcement that insurance companies can keep policies that don't meet Affordable Care Act standards for the next year. However, as of today, here is what I know.

A cancelation letter doesn't mean you'll have problems buying health insurance. No matter what kind of letter you get in the mail, if it has something to do with cancelation or something else, call your local insurance representative.

Most of them will be up on rules and regulations. And, typically if you call within 30-60 days of receiving the cancelation letter your local insurance agent can fix things.

Nickles: I agree that things are a little up in the air after the President's announcement. A week ago, we sent out 5,000 cancelations letters because the policies were not compliant with the Affordable Care Act and we needed to transition the policy owners to plans that were compliant. As we better understand what the President's announcement means to our policy holders, we will be able to answer their questions.

Question: How are things different with the Affordable Care Act?

Graber: The crucial question to ask yourself is, "do I qualify for subsidies or not?" The answer to this question determines if you need to apply for insurance through an exchange or through insurance providers who are outside the exchange. You only receive subsidies by going with providers found within the exchange. Whether you qualify is based on income, not assets - which may create some challenges for farmers.

In South Dakota, the three carriers inside the exchange include; Avera, Sanford and Dakotacare; Wellmark Blue Cross Blue Shield is an example of a provider who decided not to participate in the exchange - at least during the 2014-2015 year. There are other providers in South Dakota who also decided not to participate in the exchange.

Nickles: A couple basic things that have changed when it comes to insurance policies, is all things are equal. You no longer receive a better rate based on sex or whether or not you have preexisting conditions.

As of Jan. 1 2014 health insurance companies can no longer ask you health related questions. Rates can vary based on age and whether or not you are a tobacco user.

A couple basic things that have changed when it comes to insurance policies, is all things are equal. You no longer receive a better rate based on sex or whether or not you have preexisting conditions.

Question: As a small employer with 50 employees or less if I don't offer health insurance, will I be penalized?

Graber: No. Small employers do not have to offer group insurance. In South Dakota I would say this impacts about three-fourths of all businesses.

With this in mind, if an employee comes to you and requests that you no longer provide them with insurance, the reason is probably because they can find a better rate, with subsidies for their entire family on the exchange.

However, they may not qualify for the subsidies on the exchange if you as an employer provide them with individual insurance that is deemed affordable - 9.5% of their W-2 wages.

I feel this is an important message for all small employers to understand -- perhaps giving their employees a small bonus that they can use on the exchange to insure their entire family may be something to consider.

Question: Because South Dakota opted not to expand Medicaid coverage, what does this mean?

Nelson: In South Dakota, 70% of all Medicaid recipients are children and the other 30 percent are seniors or individuals with disabilities.

The Affordable Care Act Medicaid expansion would expand coverage to those individuals who are at 138 percent or less of federal poverty level. That is individuals who earn $15,000 a year or a family whose combined income is $22,000 a year. In our state, 48,500 individuals, 18-64 would have qualified for expanded Medicaid coverage.

Currently, 27 states chose to expand coverage. South Dakota is among those who chose not to expand coverage.

Currently the federal government pays 55% and the state of South Dakota pays 45% of Medicaid coverage. The percentage of Medicaid covered by the federal government is based on the economic health of the state.

If South Dakota had decided to expand coverage, the federal government would have covered 100% of the expansion until 2016. After 2016, the federal government agreed to pay 90% of the expansion.

The traditional Medicaid program is not impacted.

Question: If I were drop my current insurance and purchase a policy through the exchange; what would happen if Congress would eliminate the Affordable Care Act down the road?

Nelson: No one can answer that question. However, there is no requirement that you must purchase a plan on the exchange. If you don't qualify for subsidies then there is no difference in applying for insurance on the exchange or outside the exchange.

My best guess would be that you would just move into an individual plan in the private sector.

Graber: Let's talk hypothetically. If everything goes to bed, technically what would happen then is you'll stay on your current plan until January 1, and if that plan was no longer available then you would have a guaranteed issue window to move over to another carrier without any technical underwriting.

Question: I read something on healthcare and how it's done in other countries around the world and one of the problems is if you have a multitude of various plans covering diff things that adds to the administrative costs both for insurance companies as well as health care providers. With this in mind, how does the Affordable Care Act measure up?

Nelson: Whether in the exchange or outside the exchange, the Affordable Care Act ensures that plans are uniform.

Nickles: The new Affordable Care Act plans we designed will have a positive impact for many people. Every plan has core benefits, so when you're shopping for a plan, you can compare them side-by-side.

The main difference will come down to network providers like Avera or Sanford, versus non-network providers like Dakotacare. A network plan will provide within-network solutions whereas out-of-network plans will work with all providers.

Question: What happens if you don't take any plan?

Jones: If your income is below the income tax filing threshold, and you choose not to get insurance, you will receive an exemption. However, if this is not the case, a penalty will be issued which begins at $95 for individuals. If your income is too low you can still get insurance.

Question: Since insurance companies are no longer able to ask health-related questions, can I sign up for insurance only when I need it?

Graber: Keep in mind we can't buy insurance any day of the week. You still need to buy insurance during the enrollment period.

Also, remember that you can work with your local insurance agent to purchase insurance. This way you still have a local person to contact if you have issues with your policy.

Source: SDFU

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