Health Care Insurance Marketplace – How’s It Going?

NumbersThe U.S. Department of Health and Human Services released monthly enrollment numbers for the Health Insurance Marketplace and there are some interesting tidbits about South Dakota’s experience. Put those tidbits together with anecdotal stories I’ve heard directly from it, and it is a good tale to tell.

Let’s start with how many South Dakotans are uninsured. There isn’t a perfect way to determine the insurance status of each individual in the state. But there are statisticians who make it their business to project this number, and I’ve seen the number vary widely.

Now, not everyone who is uninsured can purchase health insurance in the exchange. For South Dakotans who fall between 0 and 100 percent of the federal poverty level, they are in what is called the “coverage gap.” They make too little income to qualify for assistance in paying premiums on the Marketplace and they aren’t eligible for Medicaid in our state.  Some of these South Dakotans are my neighbors, my colleagues and my friends. They are likely yours, too, but you probably don’t know it.

The uninsured work. Many work several part-time jobs. Some attend college. But at $32,000 a year for a family of five, they make too little to obtain help in paying for their health insurance. For these individuals and their families, their hope for health insurance coverage rests with decisions at the state government level on Medicaid expansion.

For those that make more than 100 percent of the federal poverty level, they can purchase health insurance and receive tax credits to reduce the cost of their monthly premium if they purchase their coverage through healthcare.gov. South Dakota is only ahead of North Dakota, Delaware, Hawaii and the District of Columbia in Marketplace participants. As of February 2014, there were 5,077 Marketplace participants.

There are tens of thousands of South Dakotans who could benefit from purchasing coverage on the Marketplace. We’ve found that more than 87 percent of our applicants are eligible to receive tax credits. The average value of that tax credit is more than $400 per month. In addition to these tax credits, 60 percent qualify for cost sharing reductions. Those cost-sharing reductions reduce the amount paid in copays, deductibles and out-of-pocket expenses when you get care.

So why aren’t more South Dakotans taking advantage of this opportunity to get health care coverage? Some would rather pay the penalty for not carrying health insurance. They have their reasons. Some do not support the law and don’t wish to participate. Others feel that the penalty would be less expensive than the cost of having health insurance. In 2014, that penalty is $95 per adult and $42.50 per child (up to a maximum of $285 per family) or 1 percent of the total household income, whichever is greater.

But each family or person has to do the math and decide what is right. For example a family of four (dad and mom are 35-years-old with two kids) with a household income of $50,000 a year, would pay a $500 penalty and have no coverage or would could pay $282 a month for the entire family’s monthly premium and have a plan that offers a physician office copay, preventive services at no cost and a list of generic drugs at no cost – not to mention coverage for emergency care when needed. There is the choice to be made.

By Deb Muller

Chief Administrative Officer at Avera Health Plans

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