Affordable Care Act Marketplace Subsidies in Alaska Presented by Patricia Atkinson

Background Authorized by the Patient Protection and Affordable Care Act of 2010; Health insurance subsidies for individuals and families between 100% and 400% FPL, who do not have access to affordable coverage through their employer or government agency; Subsidies available January 1, 2014; Purpose is to make health insurance more affordable.

Types of Subsidies Available Monthly premium tax credit: For families between 100% and 400% FPL; Family pays portion of monthly premium, based on family income; Calculated as a percentage of income, from 2 – 9.5% depending on FPL; May be paid by federal government directly to insurance plan; Or, family may pay full premium and receive tax credit when they file income tax return.

Types of Subsidies Available 2. Cost Sharing Assistance: For families between 100% and 250% FPL; Limits out-of-pocket costs for deductibles, coinsurance, and copays; Subsidies decrease as family income increases.

Coverage Gap For non-disabled adults who do not have dependent children at home, who are below 100% FPL, there are no subsidies available. About 32,000 Alaskans fall into this category.

Coverage Gap Options are very limited for these low-income adults:  pay out-of-pocket for their care; purchase health insurance at full price; obtain primary care services at a sliding discount if they live in a community with a community health center; rely on charity care from local hospitals if they live in a community with a hospital that offers charity care; go without health care services. 

Table 1 – Income and Subsidies: 100% FPL   100% FPL Required Monthly Contribution from Enrollee Maximum Annual Out-of-Pocket Family Size Hourly Monthly Annual 1 $6.90 $1,196 $14,350 $24 $2,250 2 $9.32 $1,615 $19,380 $32 $4,500 3 $11.74 $2,034 $24,410 $41 4 $14.15 $2,453 $29,440 $49 5 $16.57 $2,873 $34,470 $57 6 $18.99 $3,292 $39,500 $66

Table 1: Income and Subsidies – 400% FPL   400% FPL Required Monthly Contribution from Enrollee Maximum Annual Out-of-Pocket Family Size Hourly Monthly Annual 1 $27.60 $4,783 $57,400 $454 $6,350 2 $37.27 $6,460 $77,520 $614 $12,700 3 $46.94 $8,137 $97,640 $773 4 $56.62 $9,813 $117,760 $932 5 $66.29 $11,490 $137,880 $1,092 6 $75.96 $13,167 $158,000 $1,251

Qualified Health Plans Must cover essential health benefits; Limit cost sharing (deductibles and copays); Satisfy other consumer protections under the ACA; Two companies in Alaska authorized to sell through the Marketplace - Premera and Moda; Bronze, Silver, and Gold policies represent the actuarial values (amount of cost sharing); Premium subsidies are based on second lowest cost silver plan.

Table 2 – Young Families –Premera Plans   Bronze Silver Gold Selected Plan Characteristics-In Network Plus Plus HSA Select Deductible for Individual $6,350 $2,500 $2,000 $1,000 Maximum Deductible for Family $12,700 $5,000 $4,000 Primary Care Coinsurance or Copay 0% 20% Out-of-pocket Max Per Individual $4,500 Out-of-pocket Max Per Family $9,000 $10,000 Sample Non-Smoker Monthly Premiums by Family Size and Ages Family Size (Ages) 1 (28) $324 $368 $431 $453 2 (24 + 26) $603 $686 $780 $842 3 (28 + 29 + 6) $846 $962 $1,095 $1,183 4 (29 + 10 + 5 + 2) $900 $1,024 $1,166 $1,258 5 (32 + 29 + 8 + 4 + 1 ) $1,252 $1,425 $1,622 $1,751 6 (37 + 35 + 16 + 13 + 11 + 5) $1,300 $1,478 $1,683 $1,816

Table 3 – Older Families – Premera Plans

Table 4: Effect on Premium by Medicaid

Cost Sharing Assistance Table 7 - Max Out of Pocket

Alaska Native/American Indians Must apply for exemption if desired; If choose to purchase health insurance, no cost sharing if income under 300% FPL; Special monthly enrollment periods available.

Examples Premium subsidies calculated using Premera Plus Silver HSA policy for non smokers; Premera Area 1 (zip codes 995xx); Out of pocket costs based on in-network health care only; Families may choose different policy or be located in different area, which could influence amount of subsidy.

Dick and Jane Dick and Jane are 58 and 62, and their income is 300% FPL ($58,140). They can purchase a silver policy in the Marketplace for $1,836 per month. They will pay $460 per month for the premium, and receive a monthly tax credit of $1,376. They will not receive subsidies for their annual out-of-pocket costs.

Joe, Mary, and Brittany Joe is 28 years old, Mary is 29, they have a 6 year old daughter Brittany. Their income is 200% FPL ($48,820.) Brittany is eligible for Denali Kid Care. Joe and Mary can purchase a silver policy for $747 per month to cover themselves only. They will pay $256 per month (6.3% of their income) and the premium tax credit, which can be paid directly to the insurer monthly, will be $491 per month. Their annual out-of-pocket costs are capped at $4,500 for the family.

Karen and Kevin Karen, age 45, and Kevin, age 47, are an Alaska Native family with three children. Their annual income is 250% FPL ($86,175), and they do not currently have health insurance. The family receives health care services through the Tribal health system. They decide to apply for health insurance through the Marketplace, although they could apply for an exemption. They choose the least expensive bronze plan, $1,191 per month. Their tax credit is calculated by subtracting the required monthly contribution based on their income ($578) from the second lowest cost silver plan in the area ($1,664) for their specific family member ages. They are eligible for a tax credit of $1,086 per month, so they will pay $105 per month for their premium ($1,191 - $1,086). They will also not pay for any copay, deductible, or other out-of-pocket expense.

Brianne Brianne is a single mother, 29 years old, with three children. Annual income is 175% FPL ($51,520). Children are on Denali KidCare, Brianne is uninsured. Silver plan just for herself is $379 per month. Tax credit is based on family of four, so she will pay $221 per month (5.15% of her income), and receive a tax credit of $158. Her out-of-pocket costs are also limited to an annual family maximum of $4,500.

Chuck, Julie, and Robert Chuck is 57, Julie is 56, Robert is 18.  Chuck and Robert are Alaska Native, Julie is non-Native.  Annual income is 138% FPL ($33,686), so Robert is eligible for Medicaid.  Chuck and Robert receive health care through the Tribal health system, but Julie is uninsured and must purchase a plan to avoid a tax penalty. They would pay 3.29% of their income or $92 per month for the policy, and receive a maximum tax credit of $1,524.  They could purchase a silver plan for Julie for $790 and a bronze plan for Chuck for $726.   $790 + $726 = $1516, tax credit is $1516 per month.  Maximum out-of-pocket is $2,250 for Julie. 

Appendices Appendix 1: Calculations of premium contributions and max out-of-pocket by FPL Note: mixing 2013 FPL with 2014 subsidies Appendix 2: Sample plans and premiums for younger and older families. Apendix 3: Examples of family income, premium price, family contribution, tax credit, and max out of pocket by FPL.

Helpful Resources www.healthcare.gov http://kff.org/interactive/subsidy-calculator/ (you can also access frequently asked questions from this page) https://www.premera.com/ak/visitor/ https://www.modahealth.com/ http://www.healthreformbeyondthebasics.org/ http://www.hhs.gov/healthcare/facts/factsheets/2011/03/americanindianhealth03212011a.html