The desire to find and apply for affordable health care options in Washington is here, but the platform to do so has certainly had its issues. With the first open enrollment period for health care reform beginning on Tuesday, Oct. 1, there were high hopes for what the state exchange — wahealthplanfinder.org — would deliver. The site is an online marketplace where people can discover if they qualify for a subsidy and what the amount of the subsidy is, and apply for medical coverage. The site opened for enrollment at around 4 a.m. on Oct. 1, and then promptly crashed within hours. The exchange spent the next week struggling to deal with both the influx of people and fixing glitches.
With the website now up and running, at least most of the time, people have been able to create their profiles and apply for coverage. Creating a profile is slightly invasive. With wahealthplanfinder.org linked through various government agencies, I have seen questions prompted by the system asking things such as “what bank was your previous home loan through” or “please verify your previous street address.” And as with anything new, there seems to inevitably come points of confusion. In my experience helping clients navigate through the exchange, the biggest areas of confusion have been centered on income. It is difficult to know what income applies to the various questions asked, and once income information is entered the site can take as little as a few minutes, or as long as a week or more, to verify income. It is only once everything has been verified that any subsidies are revealed.
Let me preface this next part with, I am not a tax consultant and cannot give tax advice. I have to be very careful when talking about tax issues, but as a benefits consultant my job is now having much more overlap into the tax realm. That being said, the tax and income questions prompted by the system are in an effort to estimate 2014 earnings as a function of something called Medically Adjusted Gross income (the new government acronym is M.A.G.I.). To save the long winded explanation, MAGI is usually going to be the bottom line of the first page of an individual’s 1040 (see chart below). This means wahealthplanfinder.org is looking for 2014 income, before standard or itemized deductions.
Many individuals I have worked with have no idea what they are going to be making for 2014, but the system has made allowances for this. If individuals experience a change in income, they are supposed to go back to wahealthplanfinder.org and update their account. The subsidies are based on what an individual estimates for his or her 2014 income, and any difference between what they estimated and the actual income will be rectified on that year’s 1040. So if you received more subsidy than you should have, you will have to pay back the government, and vice versa.
The system plots your 2014 MAGI as a percentage of the federal poverty income guidelines to determine a subsidy. If your income is from 0 through 138 percent of the Federal Poverty Income Guidelines (FPI), you will likely qualify for Apple Health (the rebranding of Medicaid). If you are between 139-250 percent of FPI, you may qualify for cost-sharing measures — simply put, those are reduced premiums and increased benefits. If you are within 251-400 percent of FPI, you will still qualify for subsidies, but no cost-sharing measures. If you are above 400 percent of FPI, you have no subsidies and may find advantages to applying for coverage either on or off the exchange. Also of special note for American Indians and Alaska Natives, if you are within 139-300 percent of the FPI, you qualify for special plans — many with no deductible and 100 percent coverage in-network.
In these hectic past few weeks, I have found that many clients prefer to look at coverage off the exchange, especially if they earn too much to qualify for a subsidy. If there are no subsidies, plans are very similar both on and off the exchange in terms of benefit and rate. While on the exchange is the only place an individual can go to get subsidies, off the exchange offers better carrier networks, a significantly easier application process with no income verification, and the peace of mind knowing the government is not going to be called on to validate and verify information. Obviously there are benefits to looking at plans both on and off the exchange, but with large amounts of new information, regulation and terminology, more people seem to be seeking expert help to guide them through these confusing changes.
– By Drew Toomey
Drew Toomey is a co-owner of Toomey and Associates, a small family-run business where he and his wife assist clients in sorting through the complexities of insurance contracts applied to every day life. He has worked with medical, dental, life and disability products, and has found his niche as a benefits consultant for more than seven years, focusing on the small group (under 50 employees) and individual/family markets. His most recent focus has been on understanding how health care reform will impact his clients and his industry.