Navigating Obamacare: What happens now that plans have kicked in?

Jan 02, 2014

For the 1.1 million Americans who signed up for health care through the health insurance marketplace, plans kicked in on Jan. 1. So what happens now that the first plans have gone into effect?

Health care law experts Timothy Jost and Judy Solomon answered questions about using your new health insurance, buying via the marketplace and everything that happens next in the Affordable Care Act roll out.

Welcome to the Washington Post Navigating Obamacare chat.  I am Timothy Jost, professor at the Washington and Lee Law School, and will be answering your questions for the next hour.  For more information on implementation of the Affordable Care Act, see my blog posts at

Hi all, happy to be here and hoping Tim and I can answer your questions.

1. Regarding the subsidy that is in the form of a tax credit, was I supposed to tell the health exchange that I want the tax credit applied to my monthly premiums (as opposed to receiving the credit when I file my 2014 tax return)? When I enrolled, the Maryland health exchange never asked me if I wanted the credit applied to my monthly premiums. 2. I have also read about a second type of subsidy that reduces out-of-pocket costs. Could you explain this second type of subsidy? Specifically: A. Who is eligible for this subsidy? B. How do I apply for it ? C. Is it available with a "Bronze" plan?

I don't think you need to tell them - I expect they factored it in to the share of premium you must pay.  You should be able to tell that from the premium you are being charged.  You do have the option of taking a lower subsidy or waiting until you file your taxes to claim the credit.  On your second question, there is a cost-sharing reduction that lowers the deductibles and other cost-sharing charges.  Cost-sharing reductions are available to people with incomes below 250 percent of the poverty line.  People with incomes below 150 percent get the largest reduction, then 150-200 and then 200 to 250.  If you are eligible for a cost-sharing reduction, you would have been offered plans with the appropriate cost-sharing level for your income, but the reductions are only available if you select a silver plan. In other words if your income is 175% of the poverty line you would have been shown silver plans with reduced cost-sharing at the level for people with incomes between 150 and 200 percent of the poverty line.

If you have a variable income, and are sure you will earn too much to qualify for a subsidy, but 2014 income turns out to be a disappointment, can you get the subsidy money later as a tax credit on your 2014 taxes (in the spring of 2015)?

Followup: If that is so, do you have to buy your plan through the exchange to preserve this option, or can you get the eventual tax credit for a plan bought from an insurer or other outside source?

Yes, and for people who think they may have income above the eligibility line waiting to claim the credit until you file your taxes is a good idea, because if you got advance payments of the credit and your income ends up being over 400 percent of the poverty line you would have to pay back the advance payments you received because you were not eligible for them.  And yes, to preserve this option you must enroll in a plan through the exchange. Premium tax credits are not available for plans bought in the individual market outside the exchange. 

In the introduction in the Post for your chat, there is this statement: "Patients can now visit any hospital, pharmacy, doctor's office or clinic with health insurance bought through the marketplace." I don't think that this is true. My understanding is that you still have the same in-network/out-of-network issue that private insurance, whether individual or group, has always had, and in addition, some Obamacare policies have no reimbursement for out-of-network health providers, as they operate as HMOs. I see several doctors who either don't take my insurance or don't take any insurance at all. Obamacare hasn't changed that, has it?

Many qualified health plans sold through the exchanges are network based.  If you signed up for a network plan, you do need to check the provider directory for your plan to make certain your doctors are in network.  You can also ask your doctor.  Some plans offer no coverage for out-of-network providers, other plans offer coverage with higher cost sharing.  Out-of-network expenses also will often not count against your out-of-pocket limit.  A recent report analyzing provider networks in the exchanges found that narrow network plans cost about 26 percent less than broad network plans and provided hospitals of equal quality.  If you have particular doctors you need to see, however, you should try to find a plan that covers them.

I am a freelance writer. I went for zero subsidies because -- I'm embarrassed to admit it -- I literally could not figure out what my "income" was. For example: like all freelancers, I have to pay both the employer and employee parts of the FICA payroll tax. That's thousands of dollars. Do I subtract that or not? Or perhaps half of it (the employer half)? So many self-employed people -- who often make around 30,000 to 50,000 in gross income -- are going without subsidies because there's no simple explanation of what "income" is. Can you help?

Your income is your adjusted gross income plus any foreign income you have that was excluded from taxation, any tax-exempt interest, and any non-taxable Social Security benefits.  Most people won't have these adjustments and their income will be their adjusted gross income.  So a good starting point would be your most recent tax return and then making an estimate based on what you think you will earn this year.  As I understand it, a portion of the self-employment tax is deducted from gross income to calculate your adjusted gross income.  If you decide to wait and claim the premium tax credit when you file your taxes, you must enroll in a marketplace plan.  If you decide you want to get advance payments at some point during the year because you realize your income is within the range for a credit you can still apply. 

I'm really shocked at some of the costs associated with the new Obamacare plans. I participate in the FEHB, and we don't have plans with deductibles in the thousands and co-pays above $25. There is some real rate shock out there, especially for the individuals and families who just barely miss being eligible for subsidies; they seem to be shouldering a disproportionately large burden for others. In retrospective, I think that there needed to be a more equitable source of funding for the subsidies than other policy-holders, such as from general tax revenues.

Do you see any rate relief in terms of increasing eligibility for subsidies or a more general economic support for the policies from general tax revenues? We seem to be really stressing people's budgets!

You are right that employer coverage generally has lower deductibles and cost-sharing than the plans offered in the marketplace.  The silver plans which are the benchmark for determining eligibility for premium tax credits are generally  comparable and even better than the plans offered in the individual market now.  The other thing that is important is that people with incomes below 250 percent of the poverty line can get cost-sharing reductions that lower the deductibles and other cost-sharing charges.  Finally, when we have looked at some of the plans with really high deductibles we have found that they don't apply to physician's visits and prescription drugs.  In terms of rate relief, I don't think we will see any major changes in the Affordable Care Act in the short term but in the long term it is likely there will be changes and improvements just as there have been for Medicare and Medicaid. 

With all the attacks on ACA, I can't help but wonder if employer based coverage is the best model. If not, what would you suggest? (Big topic for this forum, I know) Thanks for taking questions!

Conservative commentators believe we would all be better off with individual insurance, while progressive commentators think we would be better off with Medicare for all.  The majority of working age Americans, however, are insured through their employment.  Abandoning employer-based coverage would be massively disruptive of current arrangements.  The drafters of the Affordable Care Act decided to preserve and supplement our employment-based system.  Whether or not this was the right decision, any alternative is not politically feasible at this time.

What are doctors and pharmacies going to do if someone walks in tomorrow without proof of coverage, or what if they just enrolled, receive treatment, and then decide not to pay the premium? Are there any protections in place?

Unless you are in an emergency, you should first make sure that you have coverage and that the doctor or pharmacy you are going to is in your network.  If you have enrolled through the exchange and paid your first premium, your insurer should be able to verify your coverage. You should be able to find a provider directory on your insurer's website.   If you have not received verification from your insurer, call your insurer to get verification of coverage.  Most insurers can provide you with a temporary card online.  If you need to see a doctor before you get proof of coverage, your doctor's staff may be able to help you.  Pharmacies can also help you verify coverage.  Several pharamacies, including Walgrens, CVS, and Walmart have said they can help people get a 30 day supply of drugs while awaiting proof of coverage if people have enrolled.  You can also call the Marketplace call center to get help with verifying coverage. 1-855-889-4325.  If you are in an emergency, go the emergency department of a nearby hospital and they will help you sort things out.

I own a small business - the employees are myself and one additional. I have health insurance; the other employee chose not to carry it in 2012 and 2013. What are the requirements for me as the employer and for the employee in regards to health insurance? What are the new deadlines?

You are considered a small employer and there is no penalty for you as an employer for not offering coverage to your employee.  However, the individual responsibility requirement applies to both of you and you must have coverage in 2014 unless you are exempt from the penalty.  Open enrollment in the marketplaces goes through March 31 and as long as enroll by that date you won't be penalized.  

What happens if an individual estimates income at a level that exceeds Medicaid eligibility, enrolls in a plan on the Exchange and receives subsidies, and after the calendar year closes, has income was actually below the threshold. Q1: Is that individual subject to the same 'recapture' limits of subsidies delineated in the law for non-Medicaid individuals, or is the entire amount subject to recapture. Q2: Is the individual precluded from prospectively enrolling on the exchange and forced into Medicaid for the ensuing year until the income exceeds the threshold?

On your first question, as long as the exchange verified that you were eligible for premium tax credits based on your estimate of your income for 2014, you will be treated as an eligible individual in the same way as anyone else whose income ends up being lower than the estimate used to determine the advance payments.  You will not have to repay all the advance payments and you will likely get a refund because your final credit will be determined based on your actual income for the year.  However, if your income does go down because you lose a job or for another reason, you should report that to the exchange in the course of the year.  On your second question, your eligibility for the next year will be based on your estimate for that year so if you expect to earn above the Medicaid income limit you will be eligible for an advance payment.  If your estimate is below the Medicaid limit you will not be eligible for an advance payment. 

Can couples living in different states and filing tax returns separately be enrolled in Obamacare as individuals?

Married couples filing taxes separately are not eligible for premium tax credits.  (There is a tax filing status called head of household that is available to people who have a "qualified individual" in their care --usually a child when they are living apart from their spouse.  People properly filing as head of household can qualify for premium tax credits)  Couples filing separately can qualify for Medicaid. If they are living separately then the other spouse's income won't count but if they are living together the other spouse's income will count even if they file separately.  

My insurance is through my job but I can't afford to add my 6 year old daughter to it. Will I be fined if she doesn't have insurance?

Parents are responsible for ensuring that their children are insured.  The penalty that applies to children is half the flat-dollar amount that applies to parents, which would be $47.50 for 2014.  Check to see if your child is eligible for Medicaid or CHIP, however.  Even in states that don't expand Medicaid to cover adults, Medicaid must cover children if their family income is 133 percent of poverty or below, and higher income limits apply to CHIP.  If you have affordable coverage for yourself through your job, your child, unfortnately, will not be eligible for a premium tax credit.  You have until March 31 to secure coverage for your child.

If I have COBRA coverage until March for health care, am I able to pick up a new health care policy when COBRA runs out?

Yes.  Anyone who loses minimum essential coverage, including COBRA, other employer coverage, or Medicaid- can enroll in a qualified health plan through the exchange, even after open enrollment closes at the end of March.  During the open enrollment period, you could also cancel your COBRA coverage and enroll in a qualified health plan. You would have to drop COBRA coverage effective the date qualified health plan coverage begins. After the open enrollment period ends on March 31, you will not be able to cancel COBRA and enroll in a qualified health plan, but could enroll once COBRA coverage ends. 

The out of pocket maximum for my retiree health care plan (UHC PPO) is increasing for 2014, but the notice explained that copayments will now be counted toward the maximum. Does ACA require this change? If not, might this have been a state mandated change (CA in my case)?

Under the ACA, copayments count toward the out-of-pocket maxium, so if your plan is governed by the ACA, they should count.  However, if a retiree plan covers only retirees, and no active employees, it is not subject to ACA requirements.  This may be a California required provision, if the retiree plan is an insured plan and subject to state law.

Does enrollment in the U.S. Department of Veteran Affairs' healthcare program qualify as meeting the minimum requirements of the Affordable Care Act?

It depends on the particular program - there is a list of programs in the regulations:  medical benefits packages authorized for eligible veterans under sections 1710 and 1705 of Title 38 of the United States Code, CHAMPVA, and a program for certain children of Vietnam Veterans and Korean Veterans suffering from spina bifida. I assume the first two programs on the list are relevant to your question. 

My husband is likely to leave his job (or it may leave him) before the next open enrollment period, but it's uncertain. For right now he has good insurance and I am on it as well. Here's my question: if the job ends after March 31, does he have to take COBRA at that point, or can he go right to an ACA plan, even though it is out of the enrollment period? Obviously the ACA plan is likely to be much more affordable and we'd prefer to avoid COBRA altogether.

You have the choice of taking COBRA or going to the marketplace if you lose your employer coverage. Loss of employer coverage would make you eligible for a special enrollment period in the marketplace.  However, if you enroll in COBRA you would have to wait for the next open enrollment period if you decide you want to switch to a marketplace plan. 

Is there a grandfather clause in the ACA that protects some plans from elimination by the ACA? If so, what are the requirements for taking advantage of that clause?

Yes.  Most of the provisions of the ACA do not apply to plans that existed as of March 2010 when the law was adopted.  A few of the provisions of the law do apply to those plans, such the bans on lifetime and annual dollar limits and the requirement of dependent coverage up to age 25.  If, however, a plan changes significantly, for example dropping coverage for certain benefits or increasing copayments or coinsurance above certain limits, it loses its grandfathered status.  Also, insurers are not required to renew grandfathered plans indefinitely, and some insurers have apparently been refusing to renew grandfathered plans.

Thank you all for joining us. Glad we had a chance to answer your really good questions.

Thanks for the interesting questions. Best wishes for a healthy and happy new year.  You can continue to follow implementation of the ACA at (me) or (Judy).


In This Chat
Timothy Jost
Timothy Stoltzfus Jost, J.D., is a co-author of a casebook, "Health Law," used widely throughout the U.S. in teaching health law. He has written numerous monographs on legal issues in health-care reform for national organizations. Jost regularly blogs for Health Affairs, where he is a contributing editor, on regulatory issues. He holds the Robert L. Willett Family Professorship of Law at the Washington and Lee University School of Law. Jost is a consumer representative to the National Association of Insurance Commissioners and a member of the Institute of Medicine.
Judith Solomon
Solomon is Vice President for Health Policy at the Center on Budget and Policy Priorities, where she focuses on Medicaid and the Children's Health Insurance Program and issues related to the implementation of health reform, particularly policies to make coverage available and affordable for low-income people. Solomon is a graduate of the University of Connecticut and Rutgers University School of Law in Newark.
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