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What Will Health Reform Look Like in Tennessee?

What Will Health Reform Look Like in Tennessee?. Christopher Coleman Tennessee Justice Center ccoleman@tnjustice.org. Cumulative Changes in Health Insurance Premiums, Inflation, and Workers’ Earnings, 1999-2012. The Massachusetts Plan. T he three-legged stool. personal responsibility.

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What Will Health Reform Look Like in Tennessee?

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  1. What Will Health Reform Look Like in Tennessee? Christopher Coleman Tennessee Justice Center ccoleman@tnjustice.org

  2. Cumulative Changes in Health Insurance Premiums, Inflation, and Workers’ Earnings, 1999-2012

  3. The Massachusetts Plan

  4. The three-legged stool personal responsibility actual affordability guaranteed coverage

  5. Consumer Protections

  6. Consumer Protections

  7. No Wrong Door

  8. Marketplace Phone Number 1-800-318-2596

  9. Marketplace Plans – Metal Levels Lower enrollee cost-sharing Higher enrollee cost-sharing

  10. If your CLIENT falls between 100-250% of FPL, she should pick a SILVER plan.

  11. Individual Responsibility Requirement

  12. Individual Responsibility Requirement 2014 – Greater of $95 per adult family member without coverage ($47.50 per child); or 1% of taxable income (family maximum of $285). 2016 – Greater of $695 per adult family member without coverage ($347.50 per child); or 2.5 % of taxable income (family maximum of $2,085).

  13. Individual Responsibility Requirement Exemptions: • People with low incomes not required to file taxes • Certain religious groups • Incarcerated people • Undocumented residents • Members of Indian tribes • People who go without coverage for less than 3 months • People who do not have an affordable offer of coverage

  14. What is “affordable” coverage? Monthly premium < 8 % of household income

  15. Premium Tax Credits

  16. Who is Eligible? Individuals and families with income between 100% and 400% FPL • Must be lawfully present in the U.S. • Must not be eligible for other “minimum essential coverage”

  17. FPL and Eligibility

  18. How is the Amount of the Tax Credit Determined? Credit amount = Cost of benchmark plan - Expected premium contribution

  19. Benchmark Plan The benchmark plan is the second-lowest cost silver level plan.

  20. How is the Amount of the Tax Credit Determined? Credit amount = Cost of benchmark plan - Expected premium contribution

  21. Expected Premium Contribution (for an individual)

  22. Gunnar • 3 Lowest Cost Silver Plans for Gunnar • Plan A: $4,800 • Plan B: $5,000  Benchmark • Plan C: $5,200 • Premium Credit • $5,000 - $1,448 = $3,552 25 years old Income of $22,340 (200% FPL) Expected contribution: 6.3% or $1,448

  23. Gunnar • Premium Credit • $5,000 - $1,448 = $3,552 • 3 Lowest Cost Silver Plans for Gunnar • Plan A: $4,800 • Plan B: $5,000  Benchmark • Plan C: $5,200 • Bronze Plan: $3,500 If Gunnar purchases the Bronze Plan, he would not have to pay any premiums because the tax credit ($3,552) would cover the cost of the entire premium ($3,500).

  24. Coleman • 3 Lowest Cost Silver Plans for Coleman • Plan A: $14,800 • Plan B: $15,000 Benchmark • Plan C: $15,200 • Premium Credit • $15,000 - $1,448 = $13,552 62 years old Income of $22,980 (200% FPL) Expected contribution: 6.3% or $1,448

  25. Benchmark Premium, $5,000 Benchmark Premium, $15,000

  26. Who is Eligible? Individuals and families with income between 100% and 400% FPL • Must be lawfully present in the U.S. • Must not be eligible for other “minimum essential coverage”

  27. Minimum Essential Coverage • Most employer sponsored coverage is MEC • An offer of coverage - even if it’s not taken -can make someone ineligible for premium tax credits BUT Wait…

  28. Exception An individual may be eligible for premium tax credits if the employer plan is • unaffordableor • inadequate.

  29. Is it Affordable? Affordable = employee contribution for self-only coverage is less than 9.5% of household income

  30. Affordability of Employee-Only Coverage Juliette Example 1: Income:$40,000 Juliette’s share of the premium: $200/month Is the plan affordable? Cost: $2,400 Share of income: 6% Example 2: Income:$25,000 Juliette’s share of the premium: $200/month Is the plan affordable? Cost: $2,400 Share of income: 10.4%

  31. Affordability of Family Coverage (Conrad-James Family) Rayna works at Edgehill Records and earns $35,000. Edgehill offers health insurance. Teddy is a politician and earns about $12,000. Teddy does not have an offer of coverage from his employer. Household Income: $47,000 Premium Cost for Employer-Sponsored Plan Covering Just Rayna: $2,350/year (5% of household income for a family of 4) Premium Cost for Employer-Sponsored Plan Covering the Whole Family: $6,110/year (13% of household income for a family of 4)

  32. Affordability of Family Coverage (Conrad-James Family) Household Income: $47,000 Premium Cost for Employer-Sponsored Plan Covering Just Rayna:5% of household income Premium Cost for Employer-Sponsored Plan Covering the Whole Family:13% of household income 9.5% - - - - - - - - - - - - - - - - - - - - - Bottom Line: No one is eligible for premium tax credits because family coverage is considered affordable. 13%

  33. Affordability of Family Coverage (Conrad-James Family) Household Income: $47,000 Premium Cost for Employer-Sponsored Plan Covering Just Rayna: $2,350/year (5% of household income for a family of 4) Premium Cost for Employer-Sponsored Plan Covering Rayna and kids: $4,700/year (10%of household income for a family of 4) Rayna and Kids -Rayna + kids plan is considered affordable because employee-only plan is affordable. -Rayna and kids are not eligible for premium tax credits. Teddy -Teddy has no offer of coverage. -He may be eligible for premium tax credits. 9.5% - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 10% 5% 5%

  34. When is Coverage Adequate? • Coverage is adequate if it has a minimum value (MV) of 60% • This generally means that the plan pays at least 60% of spending for coverage of essential health benefits for a typical population, after accounting for cost-sharing charges required under the plan.

  35. Coverage Choices for Young Adults Juliette is 24 years old. She holds two part-time jobs. One of the jobs offers coverage. Income: $17,000 Part-Time Job Cost: $85/month 6% of income MV: 40% Marketplace -$150% FPL Cost: $57/month after premium tax credits MV: 94% after cost-sharing reduction Dad’s Plan Cost: $0 to Juliette (Dad pays for family coverage) Juliette could accept this offer, BUT because the plan has MV under 60%, the offer doesn’t preclude premium tax credit eligibility. Juliette can join her Dad’s family plan because she is under age 26. Offer does not make her ineligible for a premium tax credit. Juliette can apply for premium tax credits & cost- sharing reductions

  36. How Will an Employee Know if Her Offer is Affordable or Adequate? • Application has an appendix to be completed by the applicant (with help from his employer to indicate value and cost of the plan)

  37. Verification of Employer Offer • Final rules issued 7/5 • In most cases marketplaces will rely on information presented in the application • Federally facilitated marketplace (FFM) will check a sample of cases by contacting employers • State marketplaces can rely on information provided in the application until 2015

  38. TJC is a non-profit, public interest law and advocacy firm serving Tennessee families. We focus on policies and cases where the basic necessities of life are at stake, and where our advocacy can benefit families statewide. 301 Charlotte Avenue, Nashville, TN 37201 (615) 255-0331 or toll free: 877-608-1009 info@tnjustice.org

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