Ask Emily

Good Obamacare news for veterans and low-income Californians

CHCF Center for Health ReportingNovember 8, 2013 

Q: Will deductibles and out-of-pocket expenses, which are quite steep, be subsidized, too? Or will the policy holder be responsible for bearing the cost?

A: “Tax credit” this and “tax credit” that. You’re probably sick of that term.

I know my editor is.

Tax credits get the glory because they will significantly reduce health insurance costs for some people who buy from Covered California, the state’s health insurance exchange. Tax credits are applied to monthly premiums.

But yes, there’s another, lesser-known form of financial assistance called “cost-sharing subsidies.” Think of these subsidies as the red-headed step-children to the tax credits.

Cost-sharing subsidies will be applied to out-of-pocket expenses, such as copayments, coinsurance and deductibles. Unlike monthly premiums, these are costs you pay when you receive medical services. Think of the check you write at the doctor’s office.

However (and you knew one was coming), not everyone eligible for a tax credit can get a subsidy.

You will qualify for a tax credit if your income falls between 138 percent and 400 percent of the federal poverty level (FPL). This year, 400 percent equals $45,960 for an individual or $94,200 for a family of four.

To receive the cost-sharing subsidy as well, you must fall between 139 percent and 250 percent of FPL. This year, 250 percent equals $28,725 for an individual or $58,875 for a family of four.

But wait. There’s more.

In order to receive the subsidy, you also must purchase a plan at the “silver” level.

Covered California offers tiers of plans that cover different percentages of medical costs. A “silver” plan pays an average of 70 percent of your medical costs. (The bronze plans pay out less; the gold and platinum more. The more of your medical expenses the plan covers, the higher the monthly premium.)

An individual with a regular silver plan would pay a $45 copay to see a primary care doctor and $65 to see a specialist. The annual out-of-pocket maximum is $6,350.

But someone with cost-sharing subsidies would pay between $3 and $40 to see a primary care doctor and $5 and $50 to see a specialist. (The subsidies vary with income.) The out-of-pocket maximum would be $2,250 or $5,200.

It all makes perfect sense, right? Now I bet you’re longing for the good-old days, when it was only about tax credits.

Q: I am 58, a U.S. Army veteran and have no private insurance. I have used the VA Medical Center almost exclusively since being discharged in 1973. Under the Affordable Care Act, will I face a fine or penalty if I don’t buy private insurance?

A: Just in time for Veterans Day, some good Obamacare news!

I feel like a broken record, but in case anyone has been living on the International Space Station for three years (or really, really hasn’t been paying attention), Jan. 1 signals a new era in health insurance. Starting then, you must carry a minimum level of health coverage or face a penalty.

Chances are, you probably already meet the requirement if you currently have health insurance, whether it’s Medi-Cal, Medicare or job-based coverage. The same goes for many veterans.

According to the U.S. Department of Veterans Affairs, the following veterans programs meet Obamacare’s insurance requirement:

  • Veteran’s health care program
  • Civilian Health and Medical program (CHAMPVA)
  • Spina bifida health care program
  • most TRICARE health plan options

If you are covered by one of these programs … STOP! You don’t have to switch plans or buy a new one.

That also applies to family members covered by these programs.

Q: My family is enrolled in TRICARE, but we want to see if we can find a better deal from the health insurance exchange. Are we allowed to do that?

A: There is a blessedly simple answer to your question: Yes.

You can indeed purchase health insurance for your family from Covered California. And if your household income qualifies, you may be eligible for tax credits to offset the cost of your premiums.

It doesn’t always work this way for people who are eligible for government health care programs. As I have previously reported, if you merely qualify for Medicaid (Medi-Cal in California), for example, you can’t get tax credits, even if you haven’t enrolled.

In the case of TRICARE, which is the Department of Defense health care program for military families and retirees, it’s not eligibility that disqualifies you from tax credits. It’s enrollment.

So if your income qualifies and you want those credits, call Covered California and TRICARE to find out how to proceed, given that you’re already enrolled.

The same rule applies for other veterans health programs, says Anne Gonzales of Covered California.

“If an individual is offered but declines to enroll in the Veterans program … then they can be eligible to receive tax credits if they meet all other eligibility requirements,” she says.

In other words, yes.

Have a question for Emily? Email her at AskEmily@usc.edu. The CHCF Center for Health Reporting partners with news organizations to cover California health policy. Located at the USC Annenberg School for Communication and Journalism, it is funded by the nonpartisan California HealthCare Foundation.

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