Learning about the Affordable Care Act

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Keith Pacheco says he can’t get health insurance no matter how much he pays.

The Pennsylvania resident is 63 and has diabetes. He works part time for a nonprofit organization that doesn’t offer coverage — and he can’t get it on his own.

“Right now, I’m ‘uninsurable.’ I’ve tried three times to get insurance, and I was denied three times,” said Pacheco. “It’s not a matter of cost. They won’t insure me. Period.”

He is eagerly awaiting the implementation of President Obama’s Affordable Care Act, which will expand the health care benefits being offered to nearly 48 million uninsured Americans. Pennsylvania has about 1.3 million residents without health insurance, including an estimated 46,000 in Bucks and 55,600 in Montgomery counties. The ACA — often called “Obamacare” — will also provide more options to millions more who are under-insured.

How the ACA will work

On Oct. 1, every state will have a health insurance marketplace, also called an exchange, where people can shop for coverage. They’ll be able to enroll by mail, online, over the phone or in person through federally certified counselors called navigators. Enrollment for the health law’s new coverage options starts Oct. 1; benefits kick in Jan.1.

Pacheco is already gearing up to buy insurance on the exchanges, which are websites where consumers can compare prices and select policies. The federal website — healthcare.gov — is the primary way consumers can get details about the act and coverage options, and find out which companies offer plans in their area.

The new law will guarantee people like Pacheco coverage and bar insurers from charging them higher rates because of pre-existing medical conditions. Older people can, however, be charged more than younger people.

Jennifer Tolbert, a health policy director for the nonpartisan Kaiser Family Foundation research organization, said one of the main goals of the Affordable Care Act is to expand coverage to those who are uninsured and to improve the quality of coverage for those with insurance.

“It does this by building on the base of employer-sponsored coverage and filling in the gaps in our current system,” she said. “It expands the Medicaid system (in some states) for more low-income adults and creates new health insurance marketplaces where individuals and small employers will be able to go and shop for and enroll in private health coverage.”

“Today, the majority of Americans receive insurance through an employer and that will not change,” Tolbert said.

The Affordable Care Act makes subsidies available on a sliding scale based on income. Consumers with household incomes of between 100 percent and 400 percent of the federal poverty level may qualify for government subsidies. Essentially, those earning up to four times the federal poverty level — up to $45,000 for a single person — will be able to get some help paying their premiums.

For example, a 45-year-old person making $30,000 (260 percent above poverty level) would pay $2,500 a year for the silver plan instead of the usual $4,400. The government would pick up the remaining $1,850. The bronze plan, which has a much higher deductible, would cost the individual $1,750 instead of $2,500, saving $750 through the subsidies. Learn more about subsidies using the subsidy calculator on Kaiser’s website, Kff.org.

Renee Donahey has insurance and isn’t looking for a subsidy, but the Yardley resident expects the new marketplace will make insurance more competitive, and therefore, more affordable.

“People think it will only help poor people or the uninsured, but it’s benefiting all of us,” she said.

Opposing the ACA

Not everyone agrees the Affordable Care Act is a good law.

Joseph Morgan insists the new law is unfair. The Pennsylvania resident is worried about what happens if a member of his family goes without insurance.

Morgan, 67, gets Social Security, but his wife, a 60-year-old school crossing guard, doesn’t have health insurance.

The law imposes penalties on people who don’t buy coverage and on employers who don’t offer “affordable” coverage for their employees. The fine, calculated on a monthly basis, will be part of everyone’s federal income tax return.

The penalty is part of the law’s intention to get everyone to meet the “personal responsibility mandate” by having at least minimum coverage through a government-sponsored program such as Medicare or Medicaid, an eligible employer plan, continued coverage under COBRA or an individual plan purchased through an exchange.

Morgan said that part of the law leaves him with questions: “Is the fine cheaper than the insurance? What if I can’t afford the fine either? Luckily, in the last 20 years, neither of us have had any medical problems, and when she (wife) goes to the doctor, she pays cash. With a mortgage, home insurance and school taxes, how are we supposed to afford it (insurance)?”

All about penalties

Not everyone who doesn’t get health insurance will be penalized.

Among those exempted from the penalty: people/families who don’t earn enough to file an income tax return (about $10,000 for an individual); people for whom coverage would be an economic hardship (costing above 8 percent of their income); those with religious objections; people who are incarcerated; and members of a Native American tribe.

The Congressional Budget Office estimates that between 18 million and 19 million uninsured people will qualify for one or more of those exemptions.

“If coverage is truly unaffordable — if you can’t find a plan costing 8 percent of your monthly income or less — you can receive a financial hardship exemption and not have to pay the penalty,” said Erin Ninehouser, Pennsylvania’s Health Access Network’s education and outreach director.

“Most people who remain uninsured will be people who fall under this affordability hardship exception and are protected (from fines),” said Kaiser Family Foundation’s senior fellow of health reform Karen Pollitz.

The penalty starts at $95 or 1 percent of taxable income at the end of 2014, whichever is greater. In 2016, the penalty maxes out at 2.5 percent of taxable income or $695, whichever is greater.

“The expectation is that most people want to have health insurance, but they either can’t afford it or have been denied over pre-existing conditions; the law removes those barriers,” Ninehouser said. “Ultimately, a very small number of folks will decide they’d rather pay the penalty than get covered, but most won’t.”

Kaiser’s Pollitz agreed, saying surveys show that even young people, who are generally healthier than older folks, want health insurance — if they can afford it. A recent Kaiser poll found that about three quarters of 18- to 30-year-olds believe it’s important to have health insurance.

“The top reason younger people didn’t have it: too expensive,” she said.

Shopping the marketplace

Paul Thompson of Washington Crossing has a job with insurance, but he’s looking to the marketplace to explore more options.

He may not qualify for a subsidy, but he hopes to find a cheaper plan and questions why there isn’t more information about the kind of policies that will be available.

As of now, the U.S. Department of Health and Human services has announced a tiered system of plans, including bronze, silver, gold and platinum levels, which vary by coverage and premiums.

“I want to know how is it going to change my life. Will I pay higher or lower premiums?” Thompson asked. “I’m astounded here that here we are at the 11th hour and most people are still in the dark.”

To help ease people through the ACA maze, the federal government has appointed organizations or individuals as certified health care navigators to counsel consumers.

Specifics scarce on the process

Few details are available yet about navigating the marketplace, said Jake Bowling, director of advocacy and policy for the Mental Health Association of Southeastern Pennsylvania.

“We are just now starting to staff up the program and get trained,” said Bowling. In addition to navigators, his organization will set up a call center.

Resources for Human Development Inc. received $953,176, the largest slice of the grants awarded in Pennsylvania and will offer help to those in the 10 counties where the majority of the state’s uninsured reside. That includes Bucks and Montgomery counties in eastern Pennsylvania and Allegheny County in the west.

“We’ll target specific groups and individuals who traditionally have had poor access to insurance, mostly low-income working families,” said agency spokesman Kevin Roberts, who expects to partner with organizations, including those in Bucks and Montgomery counties, to spread the word. “We hope to reach 576,000 uninsured Pennsylvanians.”

RHD has hired 10 of the 20 navigators it says it needs to offer help in communities where services are needed most. More information on the navigators and their visits to communities will be available on the group’s website at www.rhd.org/navigator closer to Oct. 1, Roberts said.

Roberts said he expects it will take about an hour to enroll individuals or families in new plans and determine eligibility for subsidies.

“The demand (for help) will be overwhelming,” Roberts said. “And the time process will vary, but we are still working out a way to make sure everybody gets the attention they need.”

Laura Line, one of the group’s assistant health care directors, said, “People already have organizations they trust and work with and we want to build off of that so we can reach people in a place they feel is safe for them.” Right now, she said, the challenge is the “short timeline to get everything up and running.”

Educating the public

U.S. Department of Health and Human Services Secretary Kathleen Sebelius said that department is launching its own 24-hour consumer call center to answer questions in 150 languages and is partnering with 1,200 community health centers and libraries across the country to help inform and educate consumers.

Pharmacy chains including CVS Caremark and Walgreens have said they’ll step in to assist consumers. And insurance agents and brokers are expected to advise customers, although they aren’t required to be impartial or discuss all options.

As of now, the major challenge with the Affordable Care Act, Pollitz said, is that the lack of public awareness about the changes.

“Though many people are aware they may be penalized without insurance come 2014, they don’t understand that the majority of the country’s uninsured are low-income and eligible for subsidies to help them play for plans,” she said.

Her advice: “People need to brace themselves for a wait, and they shouldn’t wait until the last minute to explore their options.”

Also, she said, beware of scam artists who pose as official navigators, but are simply hunting for personal information. Fraud.org, a project of the National Consumers League, reports that confusion surrounding the law is opening the door to con artists.

A common scam has people saying they’re from the federal government and directing consumers to purchase insurance cards to be eligible for coverage. They then intimidate consumers into giving their bank account routing numbers or making a direct cash transfer by using words like “it is the law” or “the government now requires it.”

Pollitz said consumers can safeguard themselves by going through the federally authorized navigators, listed on healthcare.gov. “When in doubt, go to them,” she said.

Marion Callahan: 215-345-3060; mcallahan@calkins.com, Twitter: @marioncallahan

About this series

Sunday: Oct. 1 is the day people can start signing up for health insurance through state marketplaces under the Affordable Care Act. How will it work? Who will it help? What about Medicaid? And check out our Q&A for answers to frequent questions.

Monday: Businesses small and large are trying to analyze the impact of the ACA on their bottom lines -- and their employees. Plus, 10 things every business should do to prepare for the new law.

Tuesday: Our elected officials talk about what has been the most politically divisive federal law in recent history and what may -- or may not -- happen next.