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Choices: 20 percent of North Dakotans expected to use Health Insurance Marketplace

Graphic by Karla Patch-Anderson

Only about 20 percent of North Dakotans will need to learn to navigate the Affordable Care Act's Health Insurance Marketplace, opening Oct. 1.

The remaining 80 percent will not be directly affected by ACA's requirement to buy insurance, because they are considered to already have adequate coverage.

"It's important for (people on) Medicare to know they already have care, and it's not going to change," said Mike Fierberg, a public affairs specialist with the Centers for Medicare and Medicaid Services.

Veterans and people currently on Medicare, Tricare or Medicaid won't experience any change resulting from ACA's health insurance requirement.

Neither will people using employer-provided health insurance -- unless they want to drop their employer-provided coverage.

That means only about a fifth of North Dakotans will be eligible to receive tax credits when they buy insurance through the Health Insurance Marketplace, formerly called the "exchange," Fierberg explained.

However, the number of people eligible to receive Medicaid in North Dakota will also increase, because the federal government offered to pay for 100 percent of those costs initially, and 90 percent starting in 2020 -- both far more than the federal government pays for people on Medicaid now -- about 55 percent in North Dakota.

Currently, there are about 66,000 people eligible to enroll in Medicaid in North Dakota, according to Heather Steffl, public information supervisor for the North Dakota Department of Health. The new standards could add as many as 32,000 more people to the program.

"The new coverage will go into effect no sooner than Jan. 1, 2014," Steffl said. "The application process will probably be ready in November."

How will Medicaid eligibility change?

Medicaid requirements will be reduced starting Jan. 1, 2014.

Currently, Medicaid requires a certain income level, requires that people have assets below a certain level and also applies only to certain classifications of people, Fierberg said, such as pregnant women, parents of small children, people who are elderly or disabled.

That means most single, childless adults probably wouldn't be eligible under the current rules.

However, under the new ACA rules, there is no asset requirement, there are no classification rules and the income level for eligibility has been changed, making everyone earning less than 138 percent of the federal poverty level eligible to receive Medicaid.

Anyone making less than $15,856 per year net income -- $1,321 a month -- in a single-person household would qualify for Medicaid.

For a two-person household, the threshold would be $21,403 per year, for a three-person household it would be $26,951 per year, for a four-person household the threshold for Medicaid eligibility will be $32,499, and for a five-person household it would be $38,046.

All that is only for Medicaid's health insurance, Fierberg said, and does not include nursing home care paid through Medicaid.

Who needs the Marketplace?

While many people will find themselves newly eligible for Medicaid under ACA, those still not covered by employers, Medicaid, Medicare, Tricare or veterans' benefits will need to find health insurance elsewhere or be penalized.

That's where the Health Insurance Marketplace comes in.

Essentially, the Marketplace, which for North Dakotans will be located at healthcare.gov when it goes live, is a website showing people various insurance plans available for purchase where they live.

Anyone who purchases health insurance through that Marketplace is eligible for a tax credit, provided the household's income is equal to or less than 400 percent of the federal poverty level.

People whose income is more than 400 percent of the federal poverty level may still drop employer-provided coverage and use the Marketplace, but will not receive the tax credit.

Most people who will be purchasing insurance through the Health Insurance Marketplace fall into one of four categories, Fierberg said.

* people who have never had, nor wanted health insurance.

* people who cannot afford individual health insurance.

* people with pre-existing conditions who have been prevented from getting insurance.

* people who purchase their own individual insurance policies, which are often quite expensive, Fierberg said.

People who need to purchase insurance through the Marketplace do have some time to work through the process.

Open enrollment for health insurance that starts taking effect Jan. 1 lasts from Oct. 1 until Dec. 15. After that, the insurance will kick in between 15 and 45 days after it's purchased.

Open enrollment this year -- the first year -- will end March 31.

Next year, the open enrollment period will be shorter, from Oct. 15 to Dec. 7, but people who have a good reason -- such as divorce, marriage, having a baby, moving to a different state, crossing an income threshold level -- will be able to enroll at other times.

The usual open enrollment period will coincide with the Medicare open enrollment period, when people who wish to change their Medicare C or D plans can do so, Fierberg said, adding that people on Medicare should look at their options every year in case things change.

What are my choices at the Marketplace?

Some states opted to create their own Health Insurance Marketplaces, but North Dakota is one of 32 states that opted to let the federal government create its Marketplace.

That means it will be at healthcare.gov.

"(Marketplace users) will be confronted with a number of choices, based on how much coverage they want," Fierberg said.

Some of those choices are the same that people must always make when purchasing insurance.

* Do they want a low or a high premium -- the price a person must pay monthly, quarterly or yearly for the health insurance plan.

* Do they want a low or a high deductible -- the amount a person must pay before the insurer begins paying.

* Do they want a low or a high co-pay -- the amount a person must pay for a visit to a doctor or other health service, at the time of that service.

All three of those elements can vary between insurance plans, and people preparing to purchase through the Marketplace should consider the questions before they begin.

They should also consider how much coverage they wish to purchase.

In order to make the options easier to understand, the Marketplace will divide them into several levels -- three of which resemble the medals athletes can win at the Olympics.

* Bronze: On average, the insurer pays 60 percent of the medical cost incurred.

* Silver: On average, the insurer pays 70 percent of the medical cost incurred.

* Gold: On average, the insurer pays 80 percent of the medical cost incurred.

* Platinum: On average, the insurer pays 90 percent of the medical cost incurred. Some states do not have platinum plans.

It's important that people understand the percentages don't apply to individuals, but are only averages, Fierberg said.

That means it is possible that one person with a bronze plan could have an insurer paying 90 percent of his or her medical costs, whereas another person with the same plan might have an insurer paying only 40 percent of the costs.

To qualify as a bronze plan, an insurer must only pay 60 percent of the cost incurred on average -- across the entire population of people utilizing that plan.

There is a fifth level of coverage -- one not named after a precious metal, and one that only people younger than 30 years old will be eligible to purchase.

That is the catastrophic level of coverage, intended to protect people only against the worst.

It has a high deductible, and if it is available in North Dakota, people will have to pay $6,300 out of their own pockets before the insurance will kick in. The flip side is that the plan is very inexpensive, Fierberg said.

"We want to entice people under 30 with the low cost," Fierberg explained, because the way health insurance works, people who require little care must put money into the system to help pay for people who require more care.

Otherwise, the health insurance system is not sustainable -- and insurance companies would not agree to insure everyone, including people with pre-existing health conditions, if the healthy were not paying into the system to offset costs, Fierberg explained.

How do I use the Marketplace?

Minnesota and some other states have opted to run their own Health Insurance Marketplaces, but North Dakota's will be federally-run at healthcare.gov.

People purchasing health insurance there will need their Social Security numbers as well as their most recent W-2 or 10-40 forms, Fierberg said. Their most recent pay stubs would also be useful, if they need to estimate how much they were paid.

They will need to enter their names, ages, addresses and number of people in the household during the process as well, and the information is checked by various government agencies as the process continues, Fierberg said.

For example, the Department of Homeland Security checks citizenship status, though non-citizens residing in the U.S. legally can use the Marketplace. The Internal Revenue Service verifies income information, which is needed in order to calculate a person's tax credit.

People who have insurance through their employers may wish to check out the options in the Marketplace to see if they are better. If so, they can halt the process in the middle and choose not to make the Marketplace purchase, without being penalized, because they do have insurance.

"We won't presume that you didn't want to be insured if you don't finish the process," Fierberg said. That could also happen if a power or Internet outage occurred, or if an interruption occurred during the sign-up process.

People who do stop in the middle will likely receive an email asking if they want to continue, Fierberg said.

When examining Marketplace options, it's important to note that while people can drop their employer-provided health insurance to use the Marketplace, it isn't always to their advantage to do so.

And there's a loophole of sorts in that part of the process.

Employer-provided health insurance is considered "affordable" if the employee-only share of it costs less than 9.5 percent of the employee's income.

That figure does not include the employee's cost for insuring family members.

Generally, insuring family members costs an employee proportionally more than insuring himself or herself, but even if the cost of insuring family members is very high, and not truly affordable, it is still considered "affordable" health care under ACA, Fierberg explained.

Many other elements, such as the precise plans that will be offered, will continue to remain unknown until the Marketplace goes lives Oct. 1.

For more information, including answers to frequently-asked questions, and a glossary of terms related to health insurance, visit healthcare.gov.

Sun reporter Kari Lucin can be reached at 701-952-8453 or by email at klucin@jamestownsun.com

Sun reporter Keith Norman can be reached at 701-952-8452 or by email at knorman@jamestownsun.com

What if I don't get health insurance anyway?

People who do not get health insurance will be penalized for it under the Affordable Care Act.

While the penalties are relatively light in the first year, they become increasingly worse as time goes on.

In 2014, the penalty for not having insurance will be either $95 per adult in a household and half that for children, to a maximum of $285 per household, or it will be 1 percent of the adjusted gross income on the tax return, whichever is more, said Mike Fierberg, a public affairs specialist with the Centers for Medicare and Medicaid Services.

The cost of not having insurance increases in 2015, and becomes even higher in 2016, when it will cost either $695 per person or 2.5 percent of the adjusted gross income, whichever is more.

How much will Marketplace health insurance cost?

While information about specific health insurance plans that will be on the Marketplace is not available, some cost information is, said Mike Fierberg, public affairs specialist with the Centers for Medicare and Medicaid Services.

The available numbers are averages for North Dakotans across all ages, and premiums vary significantly from young to old.

According to a report released Wednesday from the Department of Health and Human Services, North Dakotans will have an average of 24 health plans to choose from, in the bronze, silver, gold or catastrophic categories.

The average premium for the lowest-cost silver plan will be $350, and for the lowest-cost bronze plan will be $281.

Rates do vary by age and location.

A 27-year-old in Bismarck will choose between 24 plans, with the lowest bronze plan having a premium of $185 a month, the lowest silver plan costing $230 a month, the lowest gold plan costing $259 and the lowest catastrophic plan costing $142.

Assuming he or she is single, that person will also be eligible for an $87 per month tax credit.

For a family of four with an income of $50,000, the silver plan with the second-lowest premium cost would be $841 per month, and the family would qualify for a $559 per month tax credit.

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