The launch of Washington’s grand experiment with a health insurance exchange is just over a month away. Oct. 1 is when sign-up for coverage begins formally for individuals and families that lack coverage. Under the Affordable Care Act, nearly everyone is required to have insurance for 2014 to avoid tax penalties.
State experts say 80 percent of Washingtonians won’t be affected by the federal reform, also known as Obamacare. That’s because most Washingtonians are already covered by employer-based private insurance, federal military coverage, Medicare for retirees, Medicaid for the poor or some other option.
Still, “There’s a number of people for whom it’s going to be worth going to the Healthplanfinder site and see what is available,” said Michael Marchand, communications director for the Washington Health Benefit Exchange.
Even those who don’t need to sign up might want to have a look, he said.
The Affordable Care Act has been taking effect in stages since President Barack Obama signed the legislation in 2010. In Washington state, the new law, coupled with the expansion of free Medicaid coverage agreed to by the Legislature this year, will bring coverage to more than half of the state’s 1 million uninsured by the end of 2014, according to state figures.
About 280,000 of the projected half-million newly insured are expected to sign up with private insurance plans through the online exchange by the end of next year. Of these, 90 percent are likely to get subsidies in the form of federal tax credits, according to Gov. Jay Inslee’s health policy office and Marchand’s nonprofit agency.
Expanded Medicaid coverage — which is part of the reform — could make doctors and medications available to an estimated 247,000 more of the state’s uninsured.
Several consumers interviewed recently said they were eager to study the options for insurance coverage that will start Jan. 1.
“It’s October when you can start signing up. I’ll be there Oct. 1 on the computer,’’ said Andy Yager, an Olympia resident who lost his warehouse job and the accompanying insurance two years ago.
Yager has had to scramble to keep his family in its home while also securing medications he needs to control severe spinal disc pain.
“For 30 years, I took for granted the insurance that I got,” he said. “In fact, (I) complained about it quite often, like everybody else. But when all of a sudden you don’t have it, it’s overwhelming, to be honest with you.”
A lot of information about health coverage is available at the state’s exchange website — wahealthplanfinder.org — but details are being added, and a bigger effort to get the public’s attention is planned after Labor Day, Marchand said. The state rolled out the first phase of its ad campaign last week, the beginnings of an effort that will spend $26 million in federal funds to get the word out.
Officials expect many consumers to find lower premiums, but some will pay more each month. Either way, they say, the benefits for many who have insurance will be better under the new standards. With new tax credits also available, out-of-pocket costs might be lower.
The exchange, in addition to being a marketplace for private insurance, will refer some visitors to the newly expanded Medicaid program for enrollment.
Critics of the Affordable Care Act worry about the costs of expanded Medicaid and of the tax credits to help working families buy private coverage.
In its May report, the nonpartisan Congressional Budget Office predicted gross costs for health reform to total $1.8 trillion for the 10 years ending in 2013, including $1.1 trillion for health exchange subsidies such as tax credits for the roughly 24 million people expected to buy insurance through exchanges. Another $710 billion cost is anticipated for the estimated 13 million people who will become enrolled in Medicaid or the Children’s Health Insurance Program.
Some of that cost is offset by penalties paid by individuals and employers who refuse to participate in the insurance mandates and from an excise tax on high-premium or “Cadillac” insurance plans.
But Washington Policy Center, a Seattle think tank that advocates for free-market initiatives such as fewer requirements for insurers and more consumer choices, says estimates of the 10-year cost of health reform keep climbing for each new 10-year period analyzed.
The center warns that rising costs could lead to a larger national debt, higher taxes or deeper cuts to Medicare.
“The numbers are off the charts — they go to $2 (trillion) to $3 trillion when the Affordable Care Act is fully cranked up and has full utilization,’’ said Roger Stark, a retired physician and health-policy analyst for the center. “We don’t exactly know what the enrollment is going to be. … But even the CBO has upped their estimates from 2009.”
FAMILY BALANCING JOBS, INSURANCE, RENT PAYMENTS
Consumers could find themselves shopping on the state exchange for several reasons, among them unemployment, an employer that doesn’t offer coverage or lack of affordable plans.
For Cristan Sutton, her husband and two kids, life has been a balancing act since the Gig Harbor family lost its Lacey-area home, jobs and insurance during the Great Recession. Sutton, 49, now works for a housing-outreach agency in Tacoma and counsels people on foreclosures and selling their homes to get out of a financial crisis.
Her husband, Bob, is back working as a carpenter, most recently in Bremerton. Daughter Sarah is 19, and daughter Carolyn is 13.
Sutton’s younger daughter is covered by the state-subsidized Apple Health program for children, but the eldest recently aged out of the program.
“We’re not the neediest of the needy, but we’re the typical lower-middle class family that has slipped through the cracks,” Sutton said. “We aren’t low enough income to get as much help as is out there, and we are not making enough to do it ourselves.”
Sutton’s job pays just enough that she can afford health coverage for herself for about $100 a month and dental for the entire family for about $100 more.
Her husband lost his coverage when he lost his permanent job, putting his livelihood in construction at risk because he suffers from rheumatoid arthritis that requires treatment to manage the pain. Only with the help of charities and discounted medicines was he able to get care and continue working, Sutton said.
“Health care can make the difference between someone working or not — or being able to work again,” she said. “At 55, it’s kind of early to be thinking you are done.”
But covering the whole family would have cost $900 a month. Sutton plans to look into the policy offerings when the wahealthplanfinder.org site opens for enrollment and is hoping to find better choices.
YOUNG BUT STILL IN NEED OF INSURANCE
Ashley McIntosh works part time at a small downtown Olympia women’s shoe boutique that does not provide health benefits. The 19-year-old community college student said she could not afford $100 per month for coverage at her last job, with an Arby’s in Centralia.
“I’m just hoping this opens opportunities for young students like myself,’’ McIntosh said of Healthplanfinder. “I would worry that it would still be too expensive — that it would not actually be a fix. … I’m worried it’ll just be a nicely presented box with not what they say is going to be inside.”
McIntosh said that while she was a shift manager at Arby’s, she was scrimping to pay for classes at South Puget Sound Community College, where she is studying to become an American Sign Language interpreter. So she doesn’t have money to burn.
Her goal is to attend a four-year college, earn at least a bachelor’s degree in psychology and then become a psychologist for deaf people.
State officials fear many people under 30 — the so-called “young invincibles” — might skip insurance coverage altogether, believing they don’t need it and that paying a tax penalty of as little as $95 the first year is cheaper than buying insurance.
McIntosh said she has been nervous living without insurance and hopes to find health coverage that is affordable — whether by buying a plan or qualifying for Medicaid. One reason for her caution is that she once landed in a hospital after her car was T-boned by an at-fault driver, and she couldn’t pay the bills.
BUSINESSMAN EYEING A BETTER DEAL ON EXCHANGE
Michael Lee owns and operates a pair of adult family homes in the Tacoma area. He says he and his wife buy Group Health coverage for themselves and two children privately. The premiums feel steep at $795 a month, but Lee said it had been worse.
“We were paying $1,390 a month, which was ridiculous,’’ Lee said during a recent stop at Sea Mar Community Health Centers’ clinic in Tacoma. He was waiting in the lobby for one of his resident-clients on Medicaid who was receiving care at one of the Sea Mar clinics that cater to a lot of the uninsured.
Although he doesn’t know what options his family might find on the exchange, Lee plans to take a close look. He might be eligible for tax credits to knock down the out-of-pocket premium cost because his family income is lower than $94,200 — the maximum for a family of four to get a tax subsidy for buying insurance. Officials expect that Washingtonians buying insurance on the state exchange will get $520 million to $650 million in subsidies in the first two years of its operation.
Lee said he is healthy, and his wife has diabetes that is not serious but needs medications and monitoring.
But there’s no way he’ll skip coverage, he said.
MEDICAID MIGHT BE THE ONLY OPTION FOR SOME
For Yager, a 50-year-old resident of Olympia’s east side, the exchange cannot arrive too soon.
The former warehouse worker had insurance for most of his 30-year work life but lost his job and his health coverage in May 2011. Since then, he and his wife, Lisa, have struggled to keep their home while looking for ways to get medical care as needed.
Yager said he couldn’t keep either if not for financial help from family members and charity care that furnishes him with free pain medications for his spinal disc degeneration, which has required two surgeries. He uses a cane and moves very slowly because of the pain.
Without the income he used to get from middle-management jobs in warehouses, Yager says his family — which includes a 16-year-old son and a 21-year-old daughter in college — might qualify for Medicaid. His wife works, but her part-time child-care job does not pay well.
“The more I learn, people are telling me I’ll probably end up in the Medicaid end of things,” Yager said.
State officials are trying to get the message across that the exchange is a good place for the uninsured to begin looking for coverage, even if that’s not where they ultimately get their plan. The system will sort out the eligibility for Medicaid and tax subsidies.
But advocates for the poor, including the state’s community health clinics, say some families whose incomes fluctuate year to year may have to change plans periodically as they bounce between Medicaid eligibility and private insurance. That’s because state Insurance Commissioner Mike Kreidler rejected exchange-policy proposals from a few insurers that offered Medicaid coverage but failed to meet all coverage requirements for plans that will be offered through the exchanges.
Last week, the health exchange board delayed approval of the plans selected by Kreidler to allow the companies that were rejected to appeal.
SPREADING THE WORD TO THE PUBLIC
State officials working to bring the Affordable Care Act into full flower say they expect it to bring coverage to many of the state’s more than 1 million uninsured people in stages. About 835,000 of the state’s uninsured are eligible to enroll through exchanges or get referrals to Medicaid after Oct. 1.
“The hardest thing we’re trying to do is change people’s behavior,” Marchand said. “We’re trying to make them place value on health insurance where they have not in the past. People don’t wake up in the morning and say, ‘Gee, I’m glad I have health insurance.’”
To get the public’s attention, the exchange plans a much higher profile campaign after Labor Day that includes print media, television and a huge amount of work in communities using grass-roots groups signed up to spread the word.
About 10 organizations are taking the lead as “navigators” with an on-the-ground presence in all of the state’s counties. The exchange is authorized to give $6 million in grants to help those groups get out the word.
Choice Regional Health Network in Olympia has been tabbed to provide that service in Thurston, Lewis, Mason, Pacific and three Olympic Peninsula counties. The Tacoma-Pierce County Health Department is taking the lead for Tacoma-area communities.
Each of those lead groups is aligning with partners — and the expectation is for 60 to 80 partner organizations to form in the field. These include libraries, community centers, Boys and Girls Clubs, health clinics, interfaith councils and religious organizations.
“We have to get to people where they live, play, work and pray,” Marchand said. “We have to be everywhere.”
The exchange is a huge undertaking that has drawn help from community organizations, doctors, hospitals and advocacy groups to get it done, said Bob Crittenden, the governor’s health policy adviser.
“We are trying to get training to the right people,” he said. “The interest in doing this is huge. The support has been huge. It’s been heartwarming, actually.”
Brad Shannon: 360-753-1688
Where to go for more details:
- The Washington Health Benefit Exchange, a public-private partnership that is responsible for the creation of an online marketplace for health insurance: wahbexchange.org.
- That marketplace, called Washington Healthplanfinder, is available at wahealthplanfinder.org. Enrollment period for 2014 coverage starts Oct. 1 and ends March 31. Coverage begins Jan. 1. The exchange is opening a Spokane call center in September to help consumers through the online enrollment process.
- A calculator to help people estimate their insurance premium costs for various tiers of insurance is available at wahealthplanfinder.org/calculator/index.html.
- The federal government maintains a glossary of health care and reform terms at healthcare.gov/glossary.
Washington has more than 1 million uninsured residents, according to the Office of the Insurance Commissioner. Under reform, state officials expect 130,000 people to buy private insurance coverage through the end of 2013 and 280,000 by the end of 2014. About 90 percent of them are expected to qualify for federal tax credits or cost-sharing reductions. Exchange enrollment is predicted to grow to 343,750 in 2015 and 407,500 in 2016.
The exchange also will determine whether people are eligible for free care via Medicaid and will refer them to get enrolled. Medicaid is expected to cover 190,000 new enrollees by January 2014 and 247,000 by the end of 2014. Those eligible earn less than 138 percent of the federal poverty line. That translates to $15,856 yearly for an individual, $21,404 for a family of two, $26,591 for a family of three, $32,499 for a family of four, and so on.
Individuals must have insurance or face tax penalties. Individual penalties start at $95 per adult and $47.50 per child with a $285 limit per family — or 1 percent of the household income, whichever is larger. Individual penalties increase to $325 or 2 percent of household earnings in 2015 and to $695 or 2.5 percent of household income in 2016. Family penalties are $2,085 or 2.5 percent of income in 2016.
Exceptions to the insurance mandate: People who are low-income, members of a recognized tribe, live outside the United States, have religious objections to buying insurance, have been uninsured for less than three months, whose employers’ plans cost more than 8 percent of household income, or are enrolled in a health care sharing ministry.