Insurance markets, a major component of the 2010 Affordable Care Act, are set for open enrollment for qualifying Americans starting Oct. 1, with coverage beginning Jan. 1. The markets will offer various health insurance plans, the costs of which will be supplemented by annual federal tax credits to make premiums more affordable for low-income residents who earn too much money to be eligible for Medicaid.
According to Census Bureau data and statistics from the Kaiser Family Foundation, almost 22,000 Calhoun County families may qualify for tax credits to pay for all or part of the annual premiums of plans in the insurance markets. By becoming part of a plan, they create a larger pool of insured Americans that should lower the costs of health care overall, some health policy experts say. The Kaiser foundation is a nonprofit, nonpartisan group that focuses on health care issues facing the country.
While some insurance companies in other states have released details on the insurance plans and premiums they will offer in the marketplaces, those in Alabama, including Blue Cross Blue Shield — by far the state's largest insurance provider — have yet to do so.
Koko Mackin, spokeswoman for Blue Cross, said in an email Friday to The Star that Blue Cross had filed its proposed 2014 insurance marketplace products and premiums with the Department of Health and Human Services and the Alabama Department of Insurance.
"We cannot release specific information about our product offerings at this time, but we are planning to sell individual and small group exchange products ... in all counties in Alabama," Mackin said.
Still, estimates of potential premiums, tax credits and the number of people eligible for insurance marketplaces can be determined with census data and cost projections compiled by Kaiser.
According to HHS, families with income between 100 percent and 400 percent of the federal poverty level are eligible for the insurance marketplaces — unless they are already eligible for insurance through their employers. A family of four with an income at the poverty level earns an average of $23,550 a year. Meanwhile, a family of four with an income at 400 percent of the poverty level earns an average of $94,200 a year.
Census data show that approximately 22,000 Calhoun County families fall between those income averages, meaning they potentially can buy a plan in the insurance marketplace and receive a tax credit based on their income.
HHS estimates that 642,738 Alabamians are uninsured and eligible to buy coverage in the insurance marketplace.
Kaiser Family Foundation figures show that a family of four with a $23,550-a-year income can qualify for a plan with a $10,684 annual premium, but pay just $471 for the premium each year by receiving an annual $10,213 tax credit. The tax credit decreases for families with higher incomes. Also, the tax credit might be higher or lower depending on the type of plan purchased.
A family of four with an income of $94,200, the maximum amount allowed for the insurance marketplace, can also qualify for a plan with a $10,684 annual premium, Kaiser’s figures show. However, that family could only receive a tax credit up to $1,735 each year, dropping the premium to $8,949 annually.
Rachel Dolan, policy specialist for the National Academy for State Health Policy, an organization of state health policy makers based in Washington D.C., said the goal of the insurance marketplaces is to get as many people insured as possible to lower the overall cost of health care across the country.
"Insurance is just sort of a big risk pool that everyone pays into," Dolan said. "The bigger the pool, the average costs sort of go down because you have more people to spread the risk around."
Dolan added that more people with insurance means there will be fewer uninsured people using emergency rooms for care.
"It does keep people from expensive, urgent medical service," Dolan said.
Kevin Lucia, project director for Georgetown University's Health Policy Institute, said the insurance marketplace will provide more affordable options for many Americans.
"I think the important message for consumers is there will be an insurance exchange in every single state," Lucia said. "Consumers will be able to see the plans and compare the benefits."
Not every marketplace will be the same, however. While some states opted to create and manage their own version of an insurance marketplace, Alabama decided not to and will receive a federally-controlled version instead. Still, there will be little no difference in the tax structures between the federal and state plans, Lucia said.
David McCormack, CEO of Regional Medical Center in Anniston, said he was still unsure of what benefits, if any, insurance marketplaces will bring for his hospital. RMC provides millions of dollars in uncompensated care each year for uninsured residents.
"I don't know what the plans are going to cover," McCormack said.
McCormack said the insurance plans might provide good coverage for major treatments, but not for minor treatments that are still relatively pricy, meaning consumers would have to pick up the tab.
"If they can't pay for it now, they certainly won't be able to pay for it later," McCormack said.
Grants for explainers
In the meantime, efforts are starting in the state to educate Alabamians on the insurance marketplaces and help guide them through the process of buying plans through the next year. The federal government last week provided various Alabama organizations more than $8.5 million in grants to provide educational classes and hire people to guide consumers through the insurance marketplace.
Birmingham-based AIDS Alabama Inc. received $501,380 to provide insurance marketplace education in several parts of the state, including Calhoun County. Lauren Banks, director of public policy and advocacy for AIDS Alabama, said the organization will host its first meeting in Anniston on the topic in early October.
"We are still figuring out the best way to do this ... we haven't even been trained yet on what we should do," Banks said. "But we will be providing in-person assistance to walk people through the process in a qualified, unbiased manner."
Banks said that AIDS Alabama will hire a navigator to stay in Anniston for an entire year to provide continued assistance for anyone who wants to buy coverage in the insurance marketplace.
Dolan said education will be paramount to the success of the insurance marketplaces.
"Just the level of awareness is not that high at the moment," Dolan said. "I think it's definitely a challenge."
Staff writer Patrick McCreless: 256-235-3561. On Twitter @PMcCreless_Star.