The way it was

There has been a lot of media attention focused on various technical difficulties related to signing up for insurance under the ACA.  There is also a lot of attention being paid to the fact that individuals who had insurance on non-grandfathered plans are now receiving termination notices — though this is hardly “news”.  (A “grandfathered” plan is one that was in existence before passage of the ACA in March 2010; a “non-grandfathered” plan is a plan that an individual or employer group purchased or set up after that time. In order to be “grandfathered”, plans had to also be upgraded to meet certain specified requirements as to coverage).

I’ve recently discovered a document that was created by an insurance company (Anthem Blue Cross) to assist its agents in understanding the standards for coverage and setting rates. This 64-page Booklet, called The California Agent Guide: Policies and Procedures Sales and Underwriting for Authorized Agentss, is quite recent, published in May, 2013. But it’s worth reading as a very detailed reminder of the hurdles that everyone had to pass in order to purchase insurance.

The list of disqualifying conditions or medications is staggering.  Kid taking medication for ADHD? that’s a 25%-75% increase in premium.  Taking prescription meds for acne? Decline.   In fact there’s a whole page listing dozens of prescription medications that would preclude a person from getting insurance.

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Silver plans turning out to be best choice in N.C.

Yesterday my wife and I met with seven employees of a company to get started on enrolling them and getting them health insurance. Most of them were part time employees making about $17,000 to $20,000 a year; the two full-time employees made a little over $35,000. We can’t verify their eligibility for subsidies yet, but Blue Cross/Blue Shield has now implemented a way to “estimate” the amount of subsidy you might receive, and has calculated the plan rates accordingly.

What we’ve found so far is that the bronze level plans, while extremely inexpensive ($10/month for someone making $17,000 and single), have very high deductibles ($5000 plus $200 on prescription drugs). While the silver plans have higher monthly premiums (about $50 to $70 for the same person depending on which network of providers you get), the deductible was $500/$200 and the total out-of-pocket was only $700.

This is one problem the navigators face that we don’t: Navigators are not supposed to give advice about which plan you should choose. Whether the navigators are following that rule is unknown to me, but it seems to me to be fairly inevitable that anyone looking at those plans would instinctively blurt out that “The bronze plan is NOT in your best interest unless you know you’re not going to get sick at all in 2014.”

Another problem we had: While the website showed the estimated subsidy and gave one range of plans, when we clicked the button to email the quote to the client they got an email without the subsidies and with a slightly different set of policies. That’s something we’re going to bring to the attention of BCBS today when they have a webinar for all their agents in North Carolina.

It’s also been a revelation to us how little people know about the ACA in general. More on that in my next post.

The ACA still doesn’t exist in North Carolina

In this state, you have only two options if you want an ACA-compliant health insurance policy: Blue Cross/Blue Shield (“BCBS”) and Coventry.

Correction: If you live in one of the 39 counties that Coventry covers you have two options. In the other 61 counties in N.C., you have only one option: BCBS.

But you can’t get a subsidy through BCBS because their website can’t connect to healthcare.gov, and I’ve been told you can’t even get a quote from Coventry. I’ve heard that some people have managed to set up an account at healthcare.gov but I’m not one of the lucky few, and I’ve tried maybe 20 times by now. Continue reading

The evolution of MAGI

I have wrestled somewhat with the ACA’s definition of MAGI (modified adjusted gross income) for purposes of determining eligibility for the premium tax credit. In fact, that is what led me to create this blog.  The information I found on the internet was contradictory and confusing, and even the tax professionals and insurance agents I consulted seemed confused.

Part of the confusion stems from the fact that the tax code uses the phrase “modified adjusted gross income” to mean different things for different purposes.  The term is defined for purposes of the Affordable Care Act in 26 USC 36B.  Various other definitions can be found in these sections:

To add to the confusion, there are two other sections of the Affordable Care Act which also provide their own, different definitions of MAGI:

  • 26 USC 1411 (Medicare Tax on High Level  Investment Income)
  • 26 USC 5000A (Requirement to Maintain Minimum Essential Coverage)

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