An Obamacare Primer for Connecticut
What will the launch of Obamacare mean for Connecticut?
The federal Affordable Care Act, aka “Obamacare,” goes into effect on Oct. 1, with the promise of extending health insurance coverage to American citizens who do not have it. Connecticut has been laying the groundwork for implementation of the law with the establishment of its public health insurance exchange, Access Health CT.
According to census data, 344,000 of Connecticut’s 3.5 million residents lack health insurance. As of Oct. 1, they’ll be able to sign up for it through Access Health CT, with coverage beginning on Jan. 1, 2014.
Kevin Counihan, CEO of Access Health CT, says the law helps those currently uninsured get health care in two ways. Medicaid is being expanded, and will extend coverage to an estimated 55,000 to 75,000 residents of Connecticut. In addition, those residents who earn up to 400 percent of the poverty level will be eligible for federal subsidies to purchase health care, meaning 72 percent of those with health insurance could be eligible for assistance.
“These subsidies are significant, and they’re powerful—and they just make an expensive item, which people know that they need, more affordable,” says Counihan.
The exchange is the state’s marketplace for healthcare choices for individuals and businesses not already on a plan or looking to change.
There are three different insurance companies—Anthem, ConnectiCare and Healthy CT—that will offer insurance for individuals on the exchange. There are three different levels in coverage that increase or decrease according to a person’s age and where they live.
How will this affect me if I don’t have health insurance?
Individuals who don’t buy coverage will be fined, unless they meet one of the criteria allowing them to opt out of the program. This can include being part of a religion opposed to benefits from health insurance, status as an undocumented immigrant, being incarcerated, having family income below the threshold for filing a tax return ($10,000 for an individual, $20,000 for a family), or if more than 8 percent of your income goes into paying for health insurance. If the government discovers you don’t have health insurance when you file taxes, it will deduct a fine from any refund, or bill you through the IRS if you aren’t entitled to a refund.
The penalty for not purchasing health care in 2014 is a fine of $95 per adult and $47.50 per child, up to $285 for a family, or 1 percent of the family’s income—whichever is higher. The rates increase in successive years. In 2015, the fine rises to $325 for an adult and $162.50 for each child, up to $975 for an entire family, or 2 percent of the family’s income, whichever is higher. In 2016, the penalty will be $695 per adult and $347.50 per child, and up to $2,085 per family, or 2.5 percent of the family income, whichever is greater.
Businesses that don’t purchase insurance for employees will not be fined in the first year, as that part of the law has been delayed until 2015. Consquently, fines have not been determined yet, according to Counihan.
Who can use Access Health CT?
Uninsured citizens who are 18 to 64 years old, small businesses with 1 to 50 employees and employees who receive insurance from their employer but pay out 9.5 percent or more of their salary to cover the employee contribution to their health insurance.
Will taxpayers bear any direct costs from this?
Yes. Obamacare is primarily funded through taxes, fines and spending cuts.
To make coverage affordable to citizens, the federal government is offering subsidies to help defray the cost, provided via taxes.
States are also receiving millions in funding to create their own exchanges, and to expand Medicaid.
Estimates for the cost and savings of Obamacare fluctuate constantly and are hotly debated. The Congressional Budget Office projects the law will cost about $1.2 trillion over ten years to implement. But due to savings in medical costs and other areas, at the time of the law’s implementation it was estimated that it would reduce the deficit by $143 billion from 2010 to 2019, and continue to decrease it in later years.
The state’s health insurance exchange will operate on a federal grant until Jan. 1, 2015. Once the grant runs out on the first of the year in 2015, the exchange has to become self-sufficient. According to Counihan, they will do that with different revenue sources—such as taxes on insurance and medical equipment. He says the board that governs Access Health CT has passed an assessment on all state insurance companies, whether they participate in the exchange or not.
I have health insurance. How will this affect me?
Access Health CT estimates that 72 percent of Connecticut residents will be eligible for federal tax subsidies—the amount will vary for each individual. You’re eligible if you earn up to 400 percent of the federal poverty level: $46,000 annual income for an individual, $68,000 for a couple and $92,400 for a family of four. A recently released study by the Kaiser Family Foundation analyzing health care estimates that 48 percent of Americans who purchase individual insurance would be eligible for subsidies at an average of $5,548 per year.
How is Connecticut’s approach different than other states?
The Affordable Care Act allows states to take control of the process of opening health-insurance coverage to all, or to do nothing and let the federal government step in. Connecticut is one of 14 states plus the District of Columbia that have chosen to set up their own state health insurance exchange. Eight states are launching a hybrid where a portion is run by the state and the rest by the federal government, and 28 states are letting the federal government handle it.
Connecticut is unique because it’s offering insurance options for individuals and businesses through the same exchange. Some states have separate programs for individuals and businesses.
Despite the delay for small busineses, Connecticut is pressing forward with the enrollment portion of the exchange. Again, there will be no penalties for companies that don’t provide health care for employees until that part of the mandate takes effect Jan. 1, 2015.
Connecticut is also outsourcing management of the exchange to a third-party vendor called bswift.
How will this affect me if I’m on the state’s insurance program? If I’m a state employee? If I’m a student in Connecticut?
There is no change for residents who are on the Medicare, Medicaid, Husky or CHIP programs. Medicaid is being expanded as part of the new law, and it’s estimated an additional 55,000 to 75,000 Connecticut residents will be eligible.
There are no changes to insurance programs for state employees.
For students, the Affordable Care Act allows individuals to remain on their parent’s health insurance plan up until the age of 26. Students can also purchase insurance plans through their university or college. The only change is that Access Health CT will give students another option. If they don’t purchase through school, and aren’t on their parent’s health insurance plan, they may qualify for state aid or can purchase health insurance through Access Health CT.
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An Obamacare Primer for Connecticut