Consumer's Checkbook 2018

Home page of pa.checkbookhealth.org, aka Consumer's Checkbook, as of Nov. 9, 2017. 

Amid what is almost certainly the most confusing open enrollment season ever, Acting Pennsylvania Insurance Commissioner Jessica Altman is warning people who buy their own health insurance to make sure they know what kind of plan they’re getting.

In the last 20 months, she said, the department has taken action against seven agents who misrepresented plans as complying with the Affordable Care Act.

None of the agents were from Lancaster County, but five were from neighboring Berks County.

Depending on the situation, buying a noncompliant plan could leave people liable for a tax penalty, paying more than they need to for coverage and facing big out-of-pocket costs that would have been covered by a compliant plan.

Here’s what consumers should know.

What’s the difference?

Compliant plans have to meet coverage requirements on hospital care, prescription drugs, pregnancy, mental health services and other categories, and they have to do so regardless of a person’s medical history.

Non-compliant plans, which are also called limited-benefit plans, do not have to cover all those categories, and are allowed to deny coverage for pre-existing conditions.

Also, the individual mandate

The health care law’s individual mandate requires that people have qualifying coverage or pay a penalty — unless they get an exemption.

Compliant plans count as qualifying coverage; non-compliant plans don’t.

How to tell which is which

All plans on healthcare.gov are compliant and eligible for federal subsidies that lower the cost for people with income up to 400 percent of the federal poverty level.

Some plans offered outside healthcare.gov are also compliant, but not eligible for federal subsidies. The state-sponsored comparison site pa.checkbookhealth.org lists all of those as well as the healthcare.gov plans.

People can also check if a plan is compliant by calling the insurance company directly.

Big caveats

There is one exception and numerous exemptions from the individual mandate penalty.

The exception is for four Christian health sharing ministries: Christian Healthcare Ministries, Liberty HealthShare, Medi-Share and Samaritan Ministries. 

The plans they offer are not insurance, but the law says anyone in them does not have to pay the penalty. [Liberty HealthShare does not offer plans in Pennsylvania.]

Also notable is the hardship exemption, for people who cannot get a compliant plan at what the government deems reasonable cost. For 2018, that is 8.05 percent of household income.

Because health insurance costs so much, many Lancaster County residents who make too much to get federal subsidies likely qualify for that exemption.

Some of those people, knowing that they will not have to pay the penalty, are choosing noncompliant plans because they are cheaper.

Officials say that’s fine, as long as those people fully understand the limits of that coverage.

A hardship exemption also qualifies someone to purchase what is called “catastrophic” coverage through the marketplace, which otherwise are only available to people under age 30. Information on those plans is available through finder.healthcare.gov.

By the numbers

Here’s why some people are considering buying the skimpier noncompliant coverage.

A couple living in Lancaster County, both age 60 and with household income of $64,960, could get a 2018 healthcare.gov plan with a $0 premium and a $12,200 deductible, because of the subsidies.

With household income just $1 higher, they would not qualify for subsidies.

The cheapest regular healthcare.gov plan they could get would have a premium of $1,945 a month or more than $23,000 a year, and a $12,200 deductible.

The cheapest catastrophic plan would cost $1,236 a month, with a $14,700 deductible.

Advisers urge people near the subsidy cutoff to use tools like IRA deductions to keep household income within subsidy levels.

Subsidies are usually awarded in advance based on estimated income, then reconciled during the tax filing process.

People whose income was higher than they estimated may have to return subsidy payments — which would be especially painful for those right at the subsidy cutoff.

Open enrollment for 2018 is just half as long as it was last year, ending Dec. 15, 2017.

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