A nonprofit publication of the Kentucky Center for Public Service Journalism

Many Kentuckians with Obamacare plans received premium notices that over-estimated costs for 2018

By Melissa Patrick
Kentucky Health News

With a shortened enrollment period, huge cuts in advertising and in-person assistance, and ongoing efforts to repeal and replace the federal health law, it’s no wonder many Americans are confused about whether they can or should sign up for health coverage on government marketplaces this year.

Perhaps the most basic facts are these: The Patient Protection and Affordable Care Act, also known as Obamacare, is still the law of the land; it still requires everyone to have health insurance or pay a penalty; and the Dec. 15 deadline to sign up for a plan is fast approaching.

The requirement to have health insurance is designed to spread the risk and hold down costs. The penalty for not having it in 2018 will be $695 per adult and $347 per child, with a maximum of $2,085 per family or 2.5 percent of the household’s income, whichever is larger.

Another possible source of confusion is that many returning Obamacare customers received renewal notices from their insurer that underestimated their 2018 monthly premium estimate. The notices used the customers’ 2017 tax credit for the estimate instead of the larger 2018 tax credit, which could be causing “significant — and misleading — sticker shock,” says the Kaiser Family Foundation.

Tax credits are available to people who earn between 100 and 400 percent of the federal poverty line to help reduce Obamacare premiums. The smaller your income, the larger your tax credit.

The practice of using the previous year’s tax credit amount to determine the upcoming year’s estimate wasn’t as much a problem in the past because there wasn’t much change from year to year in premium costs.

Tax credits will be larger in 2018 because they are based on the cost of benchmark “silver” marketplace plans, which have increased significantly in most markets for 2018 as a result of the federal government no longer paying a cost-sharing payment to insurers to keep these costs down. Generally, people who have had little or no changes in income and qualify for a tax credit will get a bigger one in 2018, and that will keep their monthly premium about the same.

Kaiser offered an example of the differences in estimated and actual costs of a 2018 silver plan for a 40-year-old in Louisville with income of twice the poverty level.

Such a person would pay the same $127 per month for a benchmark silver plan after using the appropriate tax credit. But if the 2017 tax credit is applied to the 2018 premium, as some renewal notices did, that calls for a monthly cost of $277, more than double this year’s.

Elizabeth Kuhn, a spokeswoman for the Kentucky Public Protection Cabinet, said in an e-mail that between Nov. 1 and Nov. 22, about 9 percent of the calls to the state’s Department of Insurance Consumer Protection Division were related to the federal marketplace, HealthCare.gov, including calls about this issue.

“The department representatives have explained that premiums could potentially be lower,” she said. “Also, the premium notices sent to policyholders by insurers referenced that the 2018 premiums were estimates.”

In Kentucky, Anthem Inc. is offering plans in 59 counties and CareSource, a Humana Inc. plan, is handling the other 61. Fran Robinson, a spokeswoman for CareSource, said its premium-estimate notices used the 2017 tax credit instead of the higher 2018 tax credit.

Robinson said the notices stated that the premium estimate was only an estimate, and encouraged recipients to update their information on Healthcare.gov to get their actual 2018 premium amount. She said they have explained this to any consumers who have called about this issue and encouraged them to update their accounts to get an accurate premium amount.

Anthem did not respond to the same inquiry from Kentucky Health News.

Suzanne Craig, program manager of the Community Access Project for the Green River District Health Department, told WKMS in Murray that “substantial numbers” of people are signing up for their ACA plans and many are fearful that they will lose their coverage.

“We are seeing more than we expected. These enrollments are taking longer because people have more questions,” Craig told Rhonda Miller of WKMS, the Murray State University station.

What consumers need to know

Don’t assume you can’t afford a health insurance plan this year, especially if you got a notice that says your premium will be higher in 2018 than it was in 2017. Instead, to get the most accurate estimate go directly to Healthcare.gov, update your information and view the cost of all the plan options after the 2018 credit is applied.

Remember that help is available in person, by phone and online.

Every county in Kentucky has an application assister, formerly called Kynectors, to help consumers sign up for health coverage. They are offering sign-up events throughout the state.

To find an event in your county or an assister, go to healthbenefitexchange.ky.gov. The site also includes net payment examples for regions of the state and 2018 sample scenarios for individuals and families. It also provides answers to a list of frequently asked questions.

Kaiser Family Foundation offers a health insurance marketplace calculator to help consumers estimate their 2018 marketplace costs.

Help is also available through the state call center at 858-459-6328 and the Healthcare.gov customer center at 800-318-2596, which is available 24 hours a day, seven days a week.

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